There are nine community property states in the United States. Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin are community property states. These states use marital property law schemes that differ markedly from the other states that use the common law scheme and somewhat with each other. Community Property States characterize the property earned during marriage as owned by the community (the married couple) equally, regardless of who earned it or how much each person in the community earned.

Separate Property States make up the remaining states in the Union. These states characterize property earned by a wife or the husband as her or his individual separate property.

If the spouses move from a separate property state, all property acquired in that state is owned separately by each, as well as the separate ownership of property acquired in the community property state, if it is purchased with “separate funds.”

There are special rules that apply at the death of a spouse, to assure an equitable result. If you and your spouse are concerned about the characterization of your property, you should consult an attorney.

Community Property is property acquired by spouses during the duration of their marriage. The type of property is not determined by the name or names on the title. Community Property is not property of a husband or wife acquired by gift, bequest, devise, or descent. (If the gift is “to the community,” it is community property.) Likewise, it is not property brought from a Separate Property State. For example, if husband and wife move to Washington (a community property state) from Oregon (a separate property state), all of the property earned in Oregon by the wife is her separate property and all the property earned by the husband is his separate property, even after the move. (This is assuming the husband has not made a gift of his property to his wife and vice versa).

It includes:

• All earnings during marriage of the wife
• All earnings during marriage of the husband
• All property acquired with earnings during marriage
• Any property acquired with “community funds.”

Any property you came into a marriage with is your separate property. Any gift and inheritance, as well as any rents or profits that come from them, is separate property, unless it was a gift to the couple, as a community. For example, if a wife inherits $25000 from her father’s estate, ten years after she is married, that $25000 is her separate property. If she also inherits a farm and rents the use of it, any profits from that farm are her separate property.

Property acquired before marriage is separate property and there is a presumption that you intend to keep it separate. However, it can “lose” the separate property status, if the funds are mixed completely with community funds that the court believes that it can no longer be separated out or distinguished or you and your spouse express a clear intention to have all separate property made community property. A Community Property Agreement is often used to do this.

Either spouse may manage and control the community property in the same way that he/ she controls and manages his/her separate property, except that he/she may not:

• Devise or bequeath more than one half of the community property by Will.
• Give away community property without the express or implied consent of the other spouse Sell, convey, encumber, or purchase “real property” that is community (meaning land, real estate)
• Make a security interest other than a “purchase money security interest” without the other spouse joining in the execution of the agreement
• Sell community household goods, furnishings, appliances, or mobile homes without the other spouse joining in the agreement
• Do the same types of transfers of assets of a business, without consent of the other spouse, where both spouses participate in the business’s management.

Spouses who now live in a community property jurisdiction, those who now live in a common law state, but who acquired money or property while living in a community property state previously, and those who now live in a community property state, but who acquired money or property while living in a common law state previously. State laws vary, and these issues can be complex, so be aware that special attention needs to be given to the issue of community property, if you are affected by it.