Community property states grant each spouse the right to half of the community property when the marriage ends, either in death or in divorce. Each spouse is entitled to leave his half of the community property to survivors via either will or inheritance, and the law in many states allows spouses, during their lives, to establish options for spouses who outlive them. Those with specific questions about community property laws in their state should contact a local family law attorney.
Community Property Rules
In community property states--Washington, Idaho, California, New Mexico, Arizona, Wisconsin, Louisiana, Texas and Nevada--the law treats all property earned over the course of the marriage as "community" property, meaning that the property presumably belongs to the marital community and each spouse has a right to half of it at the end of the marriage. Any property that either spouse earned before the marriage, or any property that either spouse received as an individual from a gift, inheritance, or other non-earning means is that spouse's separate property, and he may do with it as he pleases.
Willing Community Property
When a married person dies in a community property state, he has the right to transfer all of his separate property via a will and also his half of the community property. However, the community property is not aggregated; in theory, a spouse can only will away one-half of each individual item of community property. The surviving spouse has a right to their half of each such item, and must have consented to the other spouse's decision to aggregate the property for purposes of a will. Note that any community debts may need to be cleared before the community property is divided.
Inter Vivos Transfers
Certain types of transfers of community property by spouses during their lifetimes will be treated as testamentary (after-death) gifts when dividing up the community property. If the spouse made any gifts of community property during his lifetime without obtaining his spouse's permission, then the law would count those gifts toward the deceased spouse's half of the community property after death. If proceeds from a life insurance policy are community property, then the law would count those proceeds as part of the deceased spouse's half if the life insurance beneficiary is anyone other than the surviving spouse.
Inheriting Community Property
When a community property spouse dies intestate (meaning, with no will or other document to determine what will happen to his property after death) his property will be passed via inheritance. Each state has its own statutes determining how inheritance will operate, but typically, the surviving spouse will get all of the community property via inheritance. If the deceased left no surviving spouse or other relatives to inherit, some states allow the community property to go to the surviving spouse's family line.