DEFINITION of 'Community Property'
A U.S. state-level legal distinction of a married individual's assets. Property acquired by either spouse during the course of a marriage is considered community property. For example, an IRA in the name of an individual with a spouse, accumulated during the course of the marriage, would be considered community property.
Also known as "marital property".
BREAKING DOWN 'Community Property'
This legal definition exists to protect spousal rights. Generally, the spouse of the retirement account owner who resides in a community or marital property state must be the sole primary beneficiary of an investment account designated as marital property, unless the spouse provides written consent to have someone else designated as primary beneficiary of the retirement account. Usually, gift and inherited assets are not considered community property.