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.


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RELATED FAQS
  1. If an individual still has his or her former spouse as the beneficiary of an IRA, ...

    It depends. Generally, divorce does not effectively change a beneficiary designation unless the divorce decree makes a stipulation ... Read Answer >>
  2. Can a spouse who is not named as a beneficiary receive assets from an IRA?

    It depends.Generally speaking, the designation of beneficiary form dictates who receives the assets from the individual retirement ... Read Answer >>
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