Benefits of Living in Community Property States

There are certain states that are in the community property jurisdiction that was derived from the law?of Mexico. The community property law states that once a couple gets married, all property is then owned jointly and will be divided equally if the couple should divorce.

The rules in community property vary from state to state and are ultimately decided upon at the time of divorce, annulment or death. Most community property states separate the property that was acquired by the individual before the marriage took place.

If there is any money earned from the properties that were determined separate before the marriage, they would also be able to keep this money instead of entering it into the community property.

When it comes to money, marriage and laws, things can get tricky. Especially since there are no two states with exactly the same law on the matter. If you own a substantial amount of property separately, or if one owns more than the other, you should consult with a lawyer to make the most educated decision on how you should determine your community and separate property.

Nobody wants to think about divorce or death, but it is good to have a plan just in case something happens. Community property states let the couple decide who they are leaving their share of the property to in the event of death. If the share of property is left to the surviving spouse, the property won't have to go through probate.

This is a long process of deciding who is the sole beneficiary of the property. It is a benefit to the surviving spouse because the deceased's share will automatically be given to them.

The majority of the?community property states are out?west. They are: California, New Mexico, Arizona, Nevada, Texas, Idaho, Louisiana, Washington and Wisconsin.

At the time of separation, financial need, ability to earn income nor fault are taken into consideration. This can be beneficial for one party and damaging to the other. If you are the sole earner then you might feel taken advantage of when it comes time to split ways.

This is why you need a property lawyer to determine what is going to be separate from your community property.

According to the majority of community property states laws, community property is anything that is acquired by either spouse during the course of the marriage. Even if ownership is in the other spouses name, it is considered community property, making?one half?your spouses.

When it comes time to file taxes and if you decide to file separately, you need to be aware of everything that is considered community property and everything that is separate. Split everything that is community property right down the middle.

While filing separately offers the taxpayer the least beneficial tax treatment, it also gives them separate tax liabilities. If you have a large amount of properties and income, it may make the most sense to file separately.