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.


RELATED TERMS
  1. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  2. Property Rights

    Laws created by governments in regards to how individuals can ...
  3. Investment Property

    A real estate property that has been purchased with the intention ...
  4. Marital Trust

    A fiduciary relationship between a trustor and trustee for the ...
  5. Tenancy By The Entirety

    A type of concurrent estate in real property that is unique in ...
  6. Form 4797

    A tax form distributed by the Internal Revenue Service (IRS) ...
Related Articles
  1. Personal Finance

    5 Things To Consider Before Late-In-Life Marriage

    Waiting to marry has become the norm, but do you know what to consider before saying "I do"?
  2. Investing

    Holding Titles On Real Property

    Find out how best to claim and convey ownership on your assets.
  3. Investing

    Your Property Tax Assessment: What Does It Mean?

    The amount of a property tax bill is based on the property’s value, the exemptions it qualifies for, its use and the local property tax rate.
  4. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  5. Personal Finance

    How Your Credit Can Affect Homeownership

    Keeping your credit clean is important when buying, qualifying and paying for a home.
  6. Investing

    Investing in Property Out of State

    If you can't afford property close to home, consider taking the real estate plunge elsewhere in the country.
  7. Taxes

    10 Things to Know About 1031 Exchanges

    Real estate swaps grow popular, but traps are many. Beware new rules on vacation homes.
  8. Managing Wealth

    Marriage-Killing Money Issues

    Money issues hamper many marriages.
RELATED FAQS
  1. My uncle died recently. He designated my mother and father as his beneficiaries in ...

    It depends. If the retirement plan is a qualified plan, then the plan administrator would refer to the plan document to determine ... Read Answer >>
Trading Center