What is Community Property?

In a common law state (like New York State), an individual whether married or single, is a separate individual with separate legal rights to property and separate tax obligations. Common law states are typically referred to as “separate property” states.

In a community property state (like California) a married couple each owns an undivided one-half interest in the “community" property.

There are nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. Alaska is an opt-in community property state that gives both parties the option to make their property community property.

Two states, Alaska and Tennessee allow non-residents to establish a community property trust with a trustee in their state.

Once property is characterized as community property (unless the property owner intentionally changes its character) it retains its character as community property for tax and legal purposes.

In community property states, property acquired before marriage is the acquiring spouse's separate property. Property acquired during marriage is presumed to be community property unless the property was acquired: (1) by gift, devise, or descent; or (2) with the separate property or separate credit of one of the spouses.

Some community property states include in their statutory definition that property acquisition must be by a married couple domiciled in that state when the property was acquired. (Washington, California, and Alaska). Other states define community property as not being separate property. The implication in those states is that property is not community property if the married couple acquiring the property was domiciled in a separate property state when the property was acquired.

Generally speaking, if either spouse owns separate personal property in a "separate property" state, that property maintains its character as separate property when brought into a community property state. A couple can take an affirmative step pursuant to the law of the community property state to obtain community property treatment.

Generally speaking, if community funds are used to purchase real estate in a "separate

property" state, community property jurisdictions will recognize the community nature of the real estate, even if the common law property state will not. So-called "quasi-community property" laws have been promulgated in some community property states such that separate property acquired outside the state will be treated as if it were community property for certain purposes.

Stepped-up Basis Advantage

The surviving spouse receives a stepped-up basis in both the decedent’s one-half interest in community property as well as the surviving spouse’s one-half interest. This rule applies if at least one-half of the whole of the community interest is includible in the decedent’s federal (estate tax) gross estate.

Attorney Adler focuses his practice on estate planning, wills, trusts and estates. He can be reached at 212-843-4059 or 646-946-8327.

Recent Posts

See All

What is a Qualified Disclaimer?

A qualified disclaimer is an irrevocable and unqualified refusal to accept an interest in property. Because the system of wealth transfer taxation in the United States (i.e., the federal estate, gift,

What is a Durable Power of Attorney?

A durable power of attorney is a legal document that authorizes an individual to legally act on behalf of another individual. The individual granting the authority to someone else to act on their beha

Who Must File a Gift Tax Return

If you are a citizen or resident of the United States, you must file a gift tax return (whether or not tax is due) if you gave gifts to someone in 2020 totaling more than $15,000 (other than to your s


Wills, Trusts & Estates 

30 years of

1180 6th Avenue

8th Floor

New York, New York 10036

Call For Consultation:

212-843-4059 or 646-946-8327




Adler & Adler celebrating 30 years of succesful law practice
Top attorney Robert Adler gets highest rating from Avvo.

Serving New York State: New York City including Manhattan (New York County); Brooklyn (Kings County); Bronx; Queens; Staten Island (Richmond County); Long Island (Nassau County and Suffolk County); Westchester County, Rockland County, Erie County, Schenectady County,

Monroe County, Onandaga County, Orange County, Albany County, Dutchess County, Broome County, Sullivan County, and Ulster County.

​​​​ © 2019 Adler & Adler, PLLC - Attorney Advertising.  The content on this site does not constitute legal advice. There is no attorney-client relationship created through the presentation of this website or your sending us any information about your activities or needs. The commencement of an attorney-client relationship requires  our mutual written agreement on terms of engagement.