This blog entry will be a short introduction to Community Property law. This is a complex and challenging subject, so we will confine the scope of the discussion quite a bit.
There are two different systems for classifying marital property in the United States: 1) common law property, and 2) community property. Washington in known as a community property state, and it is one of nine U.S. states that classify marital property using this doctrine. Each state operates its own version of community property law with subtle differences between the others. Washington’s community property law has significant differences with that in operation in California, for instance.
The states that utilize community property law are Arizona, California, Idaho, Nevada, New Mexico, Texas, Louisiana, and Wisconsin. You will notice that Washington’s neighbor Oregon is not on the list. They are a common law marital property state. It is no coincidence that many of the states operating under community property law are in the western and southern regions of the United States. These areas were once under Spanish control, before the west was completely populated and converted to United States Territory. In most of these states, the community property law that they now observe are left-over remnants of the old Spanish law that once governed these areas. All of the rest of the 50 United States operate under a common law marital property regime.
What is community property?
Community property can be defined as all property acquired during a marriage that cannot be proven to be separate property. Separate property is any property acquired prior to the marriage, and property that is received during the marriage that is a gift or inheritance. There are various exceptions and rules that govern these two types of property classification but these definitions give you the general idea. Also, any property acquired during the marriage will be presumed to be community property. To overcome this presumption, there must be clear and convincing evidence that the property is separate property, a standard that is hard to achieve.
There are several aspects of community property law that are very important in Estate Planning. If you are looking to hire an attorney to perform this type of work for you, be sure they have a good understanding of community property law. This is a key body of law that applies to several other areas of the law, and a lawyer without this fundamental skill in the state of Washington is working without all the necessary tools for the job. I’ll later blog entries, I will discuss some of the main areas of Estate Planning that can be impacted by the unique aspects of community property law in Washington. Examples included how real property is titled, the step-up of basis upon death of the first spouse, what happens when there is no will, and community property agreements.