If you live in a community property state, you and your spouse (or registered domestic partner) may be able to avoid probate by taking title to property as "community property with the right of survivorship." If this option is available to you, it's likely to be a better choice than joint tenancy. (Tenancy by the entirety, another probate-avoiding way for couples to hold title, is not available in community property states.)
Community property is a legal classification, imposed by law—it applies to certain property no matter how you hold title to it. If you live in a community property state, most property acquired by you or your spouse during the marriage is automatically community property, unless you agree otherwise. Your earnings, for example, are community property, and so is everything you buy with those earnings.
There are exceptions. Property inherited by one spouse, for example, is not community property. And spouses may sign an agreement stating that their earnings or other property are not community property.
"Survivorship community property," by contrast, is a way that couples can hold title to specific assets. In that way, it's like "joint tenancy" or "tenancy by the entirety." A couple buying a house, for example, can state on the deed that they're taking title to the property as survivorship community property.
Holding property as survivorship community property has certain consequences, the most important of which are that:
If you hold title as "community property with right of survivorship," then when one spouse dies, the other will automatically own the community property. No probate will be necessary to make the transfer. The process of transferring title to the surviving spouse will be simple. The exact steps depend on the type of property, but generally all the new owner has to do is fill out a straightforward form and present it, with a death certificate, to whoever keeps the ownership records: a bank, state motor vehicles department, or county real estate records office.
EXAMPLE: Michael and Marla, who live in Nevada, took title to their house as "community property with right of survivorship." After Michael dies, Marla takes his death certificate to the office of the county registrar of deeds. She fills out and files the form provided by that office, which asks her for some basic information about her late husband and the property. When the form is recorded (filed) by the registrar of deeds, it's proof (just as a probate court order would've been) that Marla now owns the property.
To turn property into right-of-survivorship community property, you simply need to put the right words on the title document.
|State||Couples Take Title to Property as:||Statute|
|Alaska||"survivorship community property"||Alaska Stat. § 34.77.110(e)|
|Arizona||"community property with right of survivorship"||Ariz. Rev. Stat. § 33-431|
|California||"community property with right of survivorship"||Cal. Civ. Code § 682.1|
|Idaho||"community property with right of survivorship"||Idaho Code § 15-6-401|
|Nevada||"community property with right of survivorship"||Nev. Rev. Stat. § 111.064|
|Wisconsin||"survivorship marital property"||Wis. Stat. Ann. § § 766.58, 766.60|
Spouses are free to change their minds and remove the survivorship provision later, but it must be done in writing. They should prepare a new title document that does not include the right of survivorship.
EXAMPLE: When Liz and her husband Fernando bought their vacation house, they directed the title company to state on the deed to the property that they would own it as community property with right of survivorship.
Years later, they decide that they want Fernando's son, Robert, to inherit his father's half-interest in the house. Liz and Fernando sign and record a new deed, changing the way they hold property to plain "community property." In his will, Fernando leaves his half-interest to Robert.
A spouse may also be able to act alone to revoke a right of survivorship. In Nevada, a spouse can wipe out the right of survivorship by transferring his or her half-interest in the property. And in Arizona, to remove the right of survivorship from a piece of real estate, either spouse can file a sworn statement, called an "affidavit terminating right of survivorship," with the county recorder in the county where the real estate is located. The state statute sets out what information the affidavit must contain.