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Community Property States in Wills and Marriage
Community property states follow the rule that all assets acquired during the marriage are considered "community property". A spouse may not alter, transfer, or eliminate any whole-piece of the community property without the other’s consent.
Jasper L. Edwards
In today’s world, property issues have become a common occurrence among divorced couples. For instance, a co-owned business, or a house bought by both parties can be the source of major conflict. The rules dictating how community properties should be managed tend to vary depending upon which state you live in. There are basically two kinds of states, Common Law Property States and Community Property States.
Community Property States
When it comes to community property states, married couples own their assets, property and income jointly. Those who wish to file separate tax returns will have to follow the state’s rules in regards to community property. In most cases, both spouses will have to analyze their income in order to establish how much of it goes to the marital community and what portion belongs to each one of them. In addition, each spouse will have equal ownership over the community income and deductions.
A spouse may not alter, transfer, or eliminate any whole-piece of the community property without the other's consent. A spouse can only manage his or her own half in whatever way they wish. The whole-piece includes the other spouses one-half interest, which cannot be tampered with. All this is done to ensure that a spouse isn’t alienated from their share.
While preparing a separate tax return in a community property state, the thumb rule is that both spouses must report their community income, separate income, all their separate deductions and half of their community deductions to the proper authorities.
However, most states are common law property states. The term common law is used to determine the ownership of marital property. In such states, the assets acquired by one member of the couple are completely and solely owned by that person. However, if both names are on the title, each spouse will have a 50% stake.
Community Property States List
The following is a list of states having community property: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin. Community property states follow the rule that all assets acquired during the marriage are considered "community property".
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