Community Property and Marriage: Who Owns What May Surprise You
When Jeff and MacKenzie Bezos announced their divorce, it made headlines in Hollywood tabloids but also in more staid estate planning journals. Why? Because Washington State is a community property state. Essentially, this means that whatever property is acquired during a marriage — even ownership of Amazon.com — belongs to both partners equally, with some exceptions. Washington is not alone. Eight other states also adhere to community property laws — Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Wisconsin. Alaska, going its own way, sees community property as an elective choice made by the couple.
Community Property in Washington State: The Ground Rules
All property acquired during a valid marriage or state registered domestic partnership is presumed to be community property. (That’s in the Revised Code of Washington, RCW 26.16.030, if you’d like to look it up). This applies to property you acquire while living in Washington, even if you were married in a non-community property state. The exceptions to this definition are property that is:
- Acquired by gift or inheritance and its income
- Personal injury awards for pain and suffering
- Very intimate personal items, e.g. clothing and jewelry
- Gifts from one spouse to another
All these exceptions are considered separate property. In addition to the exceptions above that may be acquired during marriage, separate property includes all property that was owned by each spouse (or partner) prior to the marriage (or partnership) – as well as the income from that and any appreciation in value. A couple might choose to convert any separate property into community property by making a written agreement. It’s up to you.
In this new e-book created by LNWM, we provide an overview on community property laws in Washington State and what you need to know in case of separation/divorce, the death of a spouse, creditor disputes and taxes. We also discuss the four types of property recognized by Washington State law: community property, separate property, quasi-community property, and community-like property. This is information all married couples should know, and which we take into account when advising clients about property titling and estate planning.