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Leaders in Family Matters

What is a Community Property State?


A community property state is a type of legal system that determines how property and assets are owned by married couples. In these states, any property or assets that are acquired during the marriage are owned equally by both spouses, regardless of which spouse actually paid for the property or asset.  This means that 50 cents of every dollar each partner earns is owned by the other partner.   This also includes debts, such as student loans, or vehicle loans.  All assets and debts earned or acquired during the marriage is community property.  

Currently, there are nine community property states in the United States: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. In these states, the law assumes that all income earned, and property acquired during the marriage is owned equally by both spouses unless there is a prenuptial agreement or some other legal agreement stating otherwise.  Marriage is a contract, and in Nevada, is governed by contract law.  A pre-nuptial agreement, or post-nuptial agreement, revises, or modifies the contract that is handed down to every couple seeking marriage; the terms of which are found in the Nevada Revised Statutes.

The issue of what is or is not community property comes up in several major life situations, but generally upon death or divorce.  A married person can bequeath 100% of their separate property, and only 50% of the community property upon death.

Community property laws can have significant implications for couples who are going through a divorce or legal separation. In these cases, the court will typically divide the property and assets equally between the spouses, regardless of who paid for them. This means that if one spouse earns significantly more income than the other, they will still be entitled to an equal share of the marital property.

It’s important to note that not all property and assets are considered community property in Nevada. Property that is acquired before the marriage or that is inherited by one spouse during the marriage is typically considered separate property and is not subject to division in a divorce. However, it can be difficult to distinguish between separate and community property, and couples may need to hire legal counsel to help them navigate the process.

Community property is a type of legal system that treats spouses as a unit.  They are no longer seen as individuals but as a family and financial unit.  Even unmarried couples who act as if they are married can have community property applied by analogy. This can have significant implications for couples going through a divorce or legal separation, as all property and assets are typically divided equally between the spouses. If you live in one of these states and are considering an estate plan, getting married, or going through a divorce, it’s important to understand how the community property laws work and to seek legal counsel if needed.

By Travis Clark, Esq.

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