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What’s Community Property?

Washington is one of 10 community property states. Under Washington’s community property laws, property acquired after marriage or registration of a domestic partnership is considered community property. An exception is any property acquired during the marriage or domestic partnership is not community property if it was received by one spouse or partner as a gift or inheritance. Each spouse has an equal ½ share in community property.


As to community property, each spouse or registered domestic partner (RDP) has the right to act alone in managing community property except:

  1. Neither can devise or bequest (via last will and testament) more than his/her ½ share in community property;

  2. Neither can give away community property without the consent of the other spouse;

  3. Neither can sell or encumber community property without the consent of the other spouse;

  4. Neither can enter into a contract to purchase community real property without the consent of the other spouse;

  5. Neither can encumber (by security interest) or sell community personal property without the consent of the other spouse;

  6. Neither can buy, sell or encumber assets of a business in which both spouses participate in its management.


Separate Property


Property (and debts) owned or acquired prior to marriage or domestic partnership is separate property. A spouse can do as the spouse so chooses with separate property without the need to obtain consent of the others spouse. In the estate planning context, a spouse can give away separate property under the last will and testament as if he/she were unmarried. RCW 26.16.010, 26.16.020. Moreover, separate property of one spouse cannot be used to satisfy the separate debts of another spouse.


Commingling


Separate property may be recharacterized as community property when the separate property is commingled with community property during marriage or domestic partnership. For this to occur, the separate property must be commingled to the point that the separate property may no longer be traceable or identified. Mumm V. Mumm, 63 Wn.2d 349, 352 (1963). This is more prone to occur with respect to funds held in bank or brokerage accounts.


Community Property Agreement


Couples in a marriage or registered domestic partnership may enter into an agreement concerning the status of community property. In that agreement, commonly referred to as a community property agreement, all property may convert to community property on the death of one spouse and vest entirely in the surviving spouse and avoid probate. Community property agreements traditionally have 3 prongs (although couples do not need to follow this approach and may alter it as they see fit):

  • The first prong may provide that presently-owned property becomes community property;

  • The second prong may provide that after-acquired property becomes community property; and

  • The third prong provides that on death of one spouse, the surviving spouse obtains entirety of the community property.


See, e.g., Mariage of Pletz, 71 Wn.App. 699, 708 (1993).


For more detailed information on community property agreements, read here.


Attorney, Chris Chicoine

www.chrischicoinelaw.com

Christopher R. Chicoine, PLLC


DISCLAIMER - THIS IS FOR INFORMATION PURPOSES ONLY; IT'S NOT LEGAL ADVICE. DON'T ACT OR REFRAIN FROM ACTING BECAUSE OF THIS. NO REPRESENTATIONS OR WARRANTIES OR ANY KIND ARE MADE. CONSULT AN ATTORNEY.



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