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1. Marriage & Money: How Community Property Laws Affect Your Future


IF You live in a community property state getting remarried may drastically affect your  financial future.

 

Community property rules can have major implications for couples, especially if you of children from a previous marriage single women and seniors  in retirement nine U.S. community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin (plus Alaska, where couples may opt-,this has a major impact on  estate planning, and taxation, especially in the

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Can you opt out of community property?

  • Yes — in all community property states, couples can enter into a premarital (prenuptial) agreement before marriage that changes or waives the default community property rules.

  • These agreements can state that all assets and income remain separate, or that only certain assets will be community property.

  • If properly executed, the agreement overrides state community property laws.

 

 

. What “Community Property” Means

  • Definition: In a community property state, most property acquired during marriage is owned equally (50/50) by both spouses, regardless of who earned the income or whose name is on the title.

  • Separate property: Assets owned before marriage, gifts, and inheritances if kept totally seperatelyremain separate property.

Retirement Accounts & Pensions

  • 401(k)s, IRAs, pensions earned during marriage → considered community property, even if only in one spouse’s name.

  • Implication: At divorce or death, the other spouse has a legal claim to half.

  • For seniors, this impacts retirement income planning and survivor benefits.

Long-Term Care & Medicaid

  • In community property states, one spouse’s assets may be treated as half-owned by the other, which affects Medicaid eligibility for nursing home care.

  • Spousal impoverishment rules may allow one spouse to keep more assets, but planning is essential.

Debt & Liability

  • Debts incurred during marriage are generally community debts.

  • Seniors may be liable for a spouse’s medical bills, credit cards, or other debts, even if only in one spouse’s name.

 

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