Community Property Agreement

Community Property Agreement

Community property agreements designate specific present and future-acquired property as community property. The main advantage to designating property this way is that it is a simple method of providing for the disposition of property upon the death of the first spouse.

Pros

• Allows title to vest in the surviving spouse immediately upon the death of the first.
• Simple and inexpensive.

Cons

• Can lead to unintentional disinheritance.
• May be a poor choice when dissolution of the marriage is likely, because the distribution of property upon dissolution might turn out much differently than it otherwise would have.
• Can interfere with estate tax protection and eligibility for long-term care benefits and resources.

Did you know?

• A deed creating a joint tenancy can often have exactly the same effect as a community property agreement.
• Despite the language in a community property agreement, some types of property have to be transferred in other ways – e.g., real estate in other states, IRA’s, life insurance benefits.