MugJogja.com

Legal Community Property

The United States has nine community-owned states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. [8] Alaska has also introduced a community ownership system, but it is optional. The spouses can create joint property by entering into a co-ownership agreement or by creating a joint property fund. [9] In 2010, Tennessee passed a law similar to Alaska`s, allowing residents and non-residents to opt for community ownership through a community property trust. [10] The Commonwealth of Puerto Rico allows property as communal property,[8] as do several Native American jurisdictions. What happens if a couple decides to change the character of their property? Is it something they can do just by signing a piece of paper or registering a deed, or is there another type of document that needs to be registered? One of the biggest misconceptions I see is that a couple, for example from a common law state, is buying property in California – that property will automatically be community property. This is not the case. If they do not reside in California, they are not subject to our Community Property Rules. Anything acquired during the marriage is joint property, unless one of the spouses can prove (or the spouses agree) that it is separate property. Separate property is property that was in possession before the marriage or acquired during the marriage as a gift, inheritance or as part of a settlement for bodily injury. Property belonging to a spouse after marriage is sometimes referred to as “separate property” from that spouse. There are cases where the community can acquire an interest in inherited property, and even situations where gifts can be “converted” into community property.

The court is not required to divide matrimonial property equally. The court is only required to make a “fair and correct” division that takes into account the needs of the children, the education and earning capacity of the spouses, the fault in the dissolution of the marriage (if specified in the petition for divorce), the person who has custody of the children and any other factor that the court considers relevant. If the spouses agree to a division of property and debts, the court will generally approve the agreement as “just and just.” The spouse who is assigned the property is usually responsible for associated debts (such as a car payment or mortgage). For example, an IRA in the name of a person with a spouse accumulated during a marriage would be considered joint property. In general, the spouse of the retirement account holder residing in a municipality or marital state must be the sole primary beneficiary of an investment account called matrimonial property, unless the spouse gives written consent for someone else to be named as the primary beneficiary of the retirement account. In South Africa, if a couple does not sign a contract before a notary, which is then registered with a deed office, they are married in community of property, meaning that all their assets and liabilities (including those acquired before the marriage) are merged into a joint estate during the marriage. in which each spouse has an undivided half share. Each spouse has the same authority to manage the estate independently, except that some larger transactions require the consent of both spouses. [7] One of the consequences of community of property in South Africa is that if one spouse is declared insolvent (bankrupt) during the marriage, the other also becomes insolvent, a potentially devastating consequence.

[1] And today we`re going to talk about community ownership in estate planning. So, Michelle, what is community property? Both spouses are responsible for the debts and obligations of the marriage, regardless of the spouse who founded them or the name on the title or note. A car bought on credit during the marriage is a common good. A divorce court can award the car (and the balance owing) to one of the spouses, but does not have the power to remove the name of the other spouse who created the debt from the contract. The creditor can always contact the other spouse to receive payment. The same goes for credit card agreements, mortgage contracts and other debts. If your spouse has opened an account with your information without your knowledge or consent, this may be considered fraud or identity theft. Michelle, are there any special tax benefits for joint property on top of that — you mentioned the estate situation and you talked about death and divorce — are there any other benefits? Alaska has an optional community ownership system in which spouses can agree to co-own some or all of the matrimonial property by forming a community property trust or community ownership agreement.

Tennessee and South Dakota have similar systems. While finding specific forms online for simple legal issues may be suitable for less complicated situations or smaller estates, the CPA is a complex document that has long-term implications for your marriage and estate plan. For example, a CPA will take precedence over your will in almost every situation, even if your will contains very different desires. Your lawyer will help you ensure that your estate plan and CPA are legally valid and free of contradictions, and that they protect you, your spouse and your heirs. In the United States, nine states have community property laws: So what if you have a couple who live in a non-communal state but acquire property in California or another state like California that is community property? Does that property automatically become community property in that other common law state? So community ownership comes into play — and we have nine states in the United States that are community owned states. Community of property means that spouses who acquire property during the marriage own property in equal shares, 50/50. This means that in the event of death, a spouse can leave his share as he wishes, and in the event of divorce, it is usually split 50/50. Separate property, on the other hand, is property acquired during the marriage by gift or bequest, as well as property that is brought into the marriage.

And then we have what is called quasi-community ownership, which not everyone has heard of. Quasi-communal property is property that a couple residing in California acquires in California and is located in a common law state. In other words, a State other than a State of Community ownership. The concept of community of property exists to protect the rights of the spouse. It comes from Spanish law, a civil law system derived from Roman civil law and the Visigothic code. It acknowledges that both spouses contribute to marriage in different ways and considers the two contributions to be financially equivalent under the law. Many states follow common law rules to determine who owns assets or property after a marriage, but this is not the case in Washington State. In Washington State (and eight other states), “communal property” is used to determine property after marriage. And in terms of separate property, is that something I can do with whatever I want, or are there restrictions on my death or divorce? Does it automatically become my property? There is.

One of the advantages of community ownership is that the property receives a complete increase in base. This means that if the couple purchased shares worth $100 and $1,000 when the first spouse died, the new basis of ownership is $1,000. Therefore, the $900 appreciation disappears completely and is not taxed. So that`s a big advantage. And then, when the second spouse dies, he or she will receive a new basic increase if the property has been revalued. The growth of the Internet has been accompanied by an increase in the number of online legal aid sites, many of which promise fast and inexpensive downloads of “do-it-yourself” legal forms to save money. However, these sites tend to only offer generic agreements that may not be suitable for all situations, and they don`t offer expert advice or a review of your estate plan to see how a CPA fits in. Some may not even help your spouse avoid discounts, which is the biggest benefit a CPA can offer.

This is definitely something couples can choose from. So if they come to California and have separate property, for example, and want to convert it to community property, they can make an agreement to change that characterization. And you mentioned a law. So most of the time, with properties, you have a deed that is registered that changes ownership and clearly states on the front that properties now change it from a single separate property to the couple`s common property. For other assets that the couple owns, we generally recommend that they enter into a matrimonial contract and that both spouses be represented so that they have fair representation and can explain what the rules are; And this is written in accordance with the Family Code and explains in detail what they change the characterization of their property.

Exit mobile version