Property Title IssuesCommunity PropertyIn community property states -- Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Puerto Rico, Texas, Washington, and Wisconsin, generally all property acquired during marriage is considered community property. Each spouse owns an undivided one-half interest in the property, regardless of how the property is titled. When one spouse dies, the property does not automatically pass to the surviving spouse but to the designated beneficiary of the property as named by the decedent spouse. Both spouses have the right to dispose of their share of community property through their wills.
Property of either spouse owned prior to marriage, or acquired by gift or inheritance during the marriage is generally considered separate property. Generally, if property has been commingled, even if such property was originally separate property, all will be deemed to be community property. However, you may be able to create separate property through a gifting strategy from one spouse to the other or by declaration in a property agreement executed by both spouses. Because of the tax and legal consequences of such a gift or property agreement, legal counsel or another professional should always be consulted.
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