Underwriting Manual: Community Property

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Standard Exceptions


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State Supplements

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Table of Contents

Underwriting Manual Subtopic

In General

V 4

Community property laws exist in Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In these states, each spouse is an equal and concurrent co-owner of all the property acquired during the existence of the marriage as a result of the joint efforts of the spouses and there is a presumption that all the property of a husband and wife is community property.

The law of any state recognizing community property must be carefully examined in order to learn the nature and extent of this form of ownership because each of the community property states has adopted its own brand of community property laws with different rules applying to divorce, death, management and liability.

Community property laws provide a system of property ownership for married persons in which spouses are treated as equal partners during the duration of the marriage. Underlying the community property system is the intent to place the husband and wife on an equal footing as to their property rights.

In a community property system, each spouse acquires a vested interest in all community property attained or acquired during the marriage. In general, one spouse cannot deal with community property without the consent of the other spouse.

Upon marital dissolution by divorce, the parties will be awarded their share of the community property based on an equitable distribution of the property. Upon marital dissolution by death, the surviving spouse takes his or her one-half of the community property, and the other half descends under the descendant's estate.