Community Property

In the administration of wills, community property holds significant importance.

It is especially important in jurisdictions where community property laws are applicable. 

This blog aims to understand community property in wills from a legal standpoint.

What Is Community Property?

Community property refers to the legal classification of property and assets.

A married couple acquires it during their marriage in community property states. 

These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. 

In such a property state, each spouse generally has an equal and undivided ownership interest in such property.

This is regardless of which spouse acquired it.

The Impact On Wills Of Community Property

Following is its impact on will:

Spousal Inheritance Rights:

In community property states, the property classification as community or separate plays a crucial role.

It is crucial in determining inheritance rights under a will. 

Upon the death of one spouse, the surviving spouse typically has a legal claim to one-half of the community property.

This will be irrespective of the terms of the deceased spouse’s will. 

The deceased spouse can bequeath their separate property.

However, community property rights are subject to statutory protections.

Devising Community Property:

A spouse can bequeath their one-half interest in community property through a will.

Recognizing that the surviving spouse retains ownership of their one-half interest is essential. 

This means that the deceased spouse’s will cannot dispose of the surviving spouse’s share of the community property.

Separate Property:

In contrast to community property, separate property can be disposed of according to the deceased spouse’s will without the surviving spouse’s claim to it.

Legal Considerations Of Community Property

Several legal considerations come into play when dealing with community property in wills.

Let’s have a look at them:

Legal Counsel:

Seeking legal advice is paramount, especially when drafting a will in a community property state. 

A qualified attorney helps ensure your will accurately reflects your wishes while adhering to state-specific laws.

Pre And Post-Nuptial Agreements:

Pre-nuptial and post-nuptial agreements can affect the disposition of property upon death. 

These agreements may define separate property and establish the distribution of community property.

It can override the state’s default rules.

Marital Property Agreements:

Some community property states allow couples to enter into marital property agreements.

This can modify the standard rules governing community property and inheritance. 

These agreements provide flexibility in estate planning.

Survivorship Rights:

Community property often includes a right of survivorship.

It means that upon the death of one spouse, the surviving spouse becomes the owner of the property.

This will be without the need for probate.

Example 1: John And Sarah’s Community Property

Background Scenario:

John and Sarah are married in California, a community property state.

During their marriage, they jointly acquired a house, a car, a savings account, and some investments.

John and Sarah have two children together.

John’s Will:

John decides to create a will to distribute his assets upon his death.

In his will, he wants to leave his share of the community property equally to his wife, Sarah, and their two children.

Example Distribution In John’s Will:

John’s share of the house, car, savings account, and investments (all community property) would go to Sarah.

Additionally, he might have some separate property, like an inheritance from his parents or a personal savings account.

He can distribute this property as he wishes, such as leaving it to a charity or designating specific assets for his children.

In this scenario, because California follows community property laws, John’s share of the community property assets will automatically go to Sarah.

He can still distribute his separate property as he wishes in his will.