Community Property States
9 states use a community property system for marital assets. In these states, most property acquired during marriage belongs equally to both spouses.
The 9 Community Property States
| State | Estate Tax? | Probate Threshold | Notes |
|---|---|---|---|
| Arizona | No | $75,000 | |
| California | No | $184,500 | |
| Idaho | No | $100,000 | |
| Louisiana | No | $75,000 | |
| Nevada | No | $100,000 | |
| New Mexico | No | $50,000 | |
| Texas | No | $75,000 | |
| Washington | Yes | $100,000 | |
| Wisconsin | No | $50,000 | Called 'marital property' |
Estate Planning Implications
Step-Up in Basis Advantage
In community property states, when one spouse dies, both halves of community property receive a step-up in basis to fair market value. In non-community property states, only the deceased spouse's share gets a step-up. This can result in significant capital gains tax savings.
No Elective Share Needed
Because each spouse already owns half of community property, community property states generally do not have elective share statutes. A spouse cannot be disinherited from their half of community property.
Separate Property Still Exists
Even in community property states, separate property (assets owned before marriage, gifts, and inheritances) remains the sole property of one spouse. However, commingling separate and community property can create tracing issues.