When one spouse dies in a community property state, the surviving spouse automatically keeps their own half of everything the couple earned or acquired during the marriage. Only the decedent’s half is up for distribution. How community property is divided when a spouse dies depends on three things: whether the decedent left a will, whether the assets were titled with a right of survivorship, and what the state’s intestacy law says if neither applies.
That basic split — your half stays yours, their half passes according to their plan or the state’s default — is the rule to anchor everything else to.
What You Keep No Matter What
Each spouse owns an undivided one-half interest in the community estate during the marriage. Death doesn’t change your half. It passes nothing, because it was already yours. No court order is needed to confirm it, and no will can redirect it.
So if a couple owns a $500,000 home as community property, the surviving spouse already owns $250,000 of it. The decedent’s will, or the state’s intestacy statute, only has authority over the other $250,000. The same logic applies to bank accounts, brokerage accounts, vehicles, and business interests acquired during the marriage. Whose name sits on the title doesn’t matter for this purpose, and neither does who earned the paycheck that bought the asset.
What Counts as Community Property
Nine states follow community property rules: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.1Internal Revenue Service. Publication 555 (12/2024), Community Property Alaska lets married couples opt in by written agreement signed by both spouses.2Justia Law. Alaska Statutes 34.77.090 – Community Property Agreement In these states, nearly everything earned or bought during the marriage is community property: wages, real estate purchased with marital income, investment accounts, business income.
Separate property is different. It covers what a spouse owned before the marriage, gifts made specifically to one spouse, and inheritances received by one spouse. The line can blur. An inheritance deposited into a joint checking account and spent on household bills for years may be treated as commingled and effectively converted to community property. Spouses can also change the character of property through a signed written agreement, sometimes called a transmutation, but most states require an express declaration from the spouse giving up their interest. A label in a will or trust document generally isn’t enough.
The decedent’s separate property is not split 50/50 at death. The will can leave it to anyone, and if there is no will, state intestacy law decides where it goes, often splitting it among the surviving spouse and the decedent’s children.
If Your Spouse Left a Will
A will controls only the decedent’s half of community property. That half can go to the children, a new spouse’s children, a charity, a friend — anyone the decedent chose. Your half is not part of the probate estate and cannot be redirected by the will, no matter what it says.
On the separate property side, the decedent can leave all of it to anyone they choose. There is no automatic spousal claim to a share of separate property through the will, though some states give the surviving spouse a family allowance or homestead exemption during probate.
If Your Spouse Died Without a Will
When someone dies intestate, state law fills in the blanks. In most community property states, the decedent’s half of community property passes entirely to the surviving spouse. The practical result is that the survivor ends up owning 100% of what was formerly shared.
Separate property is where intestacy gets complicated. State statutes typically divide the decedent’s separate property between the surviving spouse and the children, with the proportions varying by state. In some states, the surviving spouse receives all of the separate property if the only children are also the surviving spouse’s children. When the decedent had children from a prior relationship, the surviving spouse’s share of separate property often drops to one-third or less, with the rest going to those children.
When Probate Is Required and When It Isn’t
Standard community property title does not automatically avoid probate. Even though the surviving spouse already owns their half, the decedent’s half still has to be formally transferred, and that usually means a court proceeding. Several tools bypass probate entirely.
Community Property With Right of Survivorship
Several community property states let couples title assets as “community property with right of survivorship.” Under this designation, the decedent’s half transfers automatically to the surviving spouse at death. No probate, no will needed. It functions like joint tenancy but preserves the community property tax advantages discussed below. In Texas, for example, spouses can sign a survivorship agreement covering some or all of their community property, and the surviving spouse takes full ownership immediately upon the other’s death.3State of Texas. Texas Estates Code Chapter 112 – Community Property With Right of Survivorship
The tradeoff is flexibility. Right of survivorship sends the property to the surviving spouse automatically, even if a will says otherwise. Couples with blended families or specific bequests in mind should weigh that carefully.
Trusts and Beneficiary Designations
Community property can also be kept out of probate through a revocable living trust, a transfer-on-death deed for real estate (available in most community property states), and payable-on-death designations on bank accounts. Each of these lets the surviving spouse take ownership without court involvement. For smaller estates, many states offer simplified probate or small estate affidavits that cut the cost and time substantially.
If Probate Is Needed
If community property wasn’t held in a trust or titled with a right of survivorship, probate is usually necessary to transfer the decedent’s share. An executor named in the will — or an administrator appointed by the court if there’s no will — inventories assets, separates community from separate property, pays debts, and distributes what remains. Court filing fees range from a couple hundred dollars to over a thousand, and attorney fees can be substantial, set by statute as a percentage of the estate’s value in some states and required to be “reasonable” in others.
Community Debts Come Out First
Debts follow the same community principle as assets. A debt either spouse took on during the marriage is generally a community obligation, and the entire community estate is on the hook before anything reaches heirs. This holds even if only one spouse signed the loan or credit card agreement.
If a couple has $2 million in community assets and one spouse ran up $150,000 in credit card debt for family expenses, that $150,000 is paid from the community estate during probate, leaving $1,850,000 to divide. A surviving spouse who accepts the decedent’s share of community property also generally accepts responsibility for remaining community debts.
When the estate can’t cover its debts, it’s insolvent. State law sets a priority order: secured debts like mortgages and federal claims first, then estate administration costs, then funeral expenses, then unsecured creditors. Heirs receive nothing until higher-priority debts are satisfied. If you suspect the estate owes more than it owns, talk to a probate attorney before accepting any property.
The Tax Break Most Survivors Miss
An asset’s “basis” is its original purchase price, used to calculate capital gains tax when you sell. Under federal tax law, when one spouse dies, the basis of the entire community property — both halves — resets to fair market value as of the date of death. The statute treats the surviving spouse’s half as though it were “acquired from the decedent,” which makes both halves eligible for the step-up.4Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
Say a couple bought stock for $100,000 years ago and it’s worth $1 million when the first spouse dies. The new basis for the entire block becomes $1 million. If the surviving spouse sells immediately, they owe no capital gains tax on the $900,000 of appreciation. In a common law state, only the decedent’s half would have gotten the step-up; the survivor’s half would keep its original $50,000 basis, producing a $450,000 taxable gain. The double step-up applies to all community property, including real estate, stocks, and business interests.
Estate Tax Portability
Most estates owe no federal estate tax. For 2026, the basic exclusion is $15,000,000 per person, meaning an estate can pass that amount to heirs tax-free.5Internal Revenue Service. Whats New – Estate and Gift Tax Amounts above that are taxed at rates up to 40%.
If the first spouse to die doesn’t use their full exclusion, the leftover amount can transfer to the surviving spouse, potentially giving the survivor up to $30 million in combined exclusion.6Office of the Law Revision Counsel. 26 USC 2010 – Unified Credit Against Estate Tax This is called portability, and it doesn’t happen automatically. The executor has to file a federal estate tax return (Form 706) and make the portability election, even if the estate is well below the filing threshold and owes no tax.7Internal Revenue Service. Frequently Asked Questions on Estate Taxes Skip the filing and the unused exclusion disappears. For any couple whose combined assets could eventually approach $15 million once life insurance, retirement accounts, and future appreciation are counted, filing the return is a critical safeguard.
Retirement Accounts and Life Insurance
Retirement accounts and life insurance pass by beneficiary designation, not by will. Community property law can still reach them.
Federal law (ERISA) governs 401(k)s, pensions, and most employer-sponsored plans. Under ERISA, a married participant’s spouse is automatically the primary beneficiary. The participant can name someone else only if the spouse signs a written, notarized waiver. This federal rule overrides state community property law, wills, and trusts. If your spouse had a 401(k) and never obtained your written consent to name someone else, you’re entitled to the proceeds regardless of what the beneficiary form says.
IRAs work differently. They aren’t covered by ERISA’s spousal protections, and the named beneficiary controls who gets the money. In community property states, a surviving spouse may still have a claim to IRA funds if the contributions came from marital income. These disputes often end up in court, and outcomes depend on the state.
Life insurance proceeds go to the named beneficiary, but in a community property state that doesn’t end the analysis. When premiums were paid with community funds, the surviving spouse may have a legal interest in the policy even if someone else is named. Courts in community property states routinely look at where the premium money came from. If marital income funded the premiums, the surviving spouse can potentially claim a proportional share of the death benefit. Any waiver of community property rights in a policy has to be explicit.
If You Moved From a Common Law State
Property you and your spouse accumulated in a common law state before moving to a community property state isn’t automatically community property. Some states, including California, address this through quasi-community property. Property that would have been community property if the couple had lived in the community property state when they acquired it is treated as community property for purposes of division at death. Under California law, the surviving spouse receives half of the decedent’s quasi-community property, just as with standard community property.8Justia Law. California Probate Code 100-105 – Quasi-Community Property
Not every community property state recognizes quasi-community property, and the rules vary among those that do. If significant assets came with you from a common law state, this is worth reviewing with an estate planning attorney before assuming anything about how those assets will pass.