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Understanding Community Property Agreements: A Comprehensive Guide

Updated: Mar 16, 2023


Community property agreements are legal documents that couples can use to label their property as community property. In this post, we'll explain what community property is, how community property agreements work, and some of the pros and cons of using a community property agreement instead of a will.

What Is Community Property?

Community property refers to the assets and debts that a married couple or domestic partners acquire during their relationship. In some states, community property laws also apply to assets and debts that a couple brings into the relationship. Community property is owned equally by both partners and must be divided equally if the couple separates or divorces.

Separate property, on the other hand, refers to assets and debts that a partner owned before the relationship or that they acquired during the relationship as a gift or inheritance. Separate property belongs solely to the partner who owns it and is not subject to division in a divorce or separation.

How Community Property Agreements Work

A community property agreement is a legal document that a couple can use to label their property as community property. When a couple signs a community property agreement, all of their separate and community property becomes community property upon the death of the first partner.

Couples can also use a community property agreement to immediately characterize all of their assets, present and future, as community property. This can be useful in states where probate is expensive or time-consuming, as it can help couples avoid the probate process.

Pros and Cons of Using a Community Property Agreement

Reduced Protection from Creditors:

One potential disadvantage of using a community property agreement is that it may reduce the protection from creditors that a couple would have if they went through probate. When an estate goes through probate, any creditors who wish to make claims against the estate must do so within a certain timeframe. If an estate does not go through probate, however, creditors may have more time to bring their claims against the couple's property.

Issues Related to Wills and Probate:

Another potential disadvantage of using a community property agreement is that it may override any will that a partner has previously executed. For example, if a partner made a gift to a child from a previous marriage in their will and then signed a community property agreement, the gift would go to their spouse or domestic partner regardless of what was stated in the will.

Community property agreements are also less flexible than wills, as they do not allow for binding gifts to anyone but the surviving spouse or domestic partner. And in states that do not recognize community property laws, a probate proceeding may be required to distribute the couple's property.


In the event of a divorce or dissolution of a domestic partnership, a community property agreement can be useful in determining how a couple's property should be characterized and divided. However, once a community property agreement has been signed, it can only be terminated with the mutual consent of both partners.


Community property agreements can be a useful tool for couples who want to label their property as community property. However, there are also some potential disadvantages and unintended consequences to consider. If you're thinking about using a community property agreement, it's always a good idea to speak with an attorney first.


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