Why or When Should We Have a Community Property Agreement if We Live in Washington, a Community Property State?

Washington is one of nine community property states in the U.S., which means that most assets acquired during a marriage are legally considered jointly owned by both spouses. However, it is important to know that Washington law allows individuals to maintain separate property. So how does this distinction impact estate planning, and what role does a Community Property Agreement play?

Community Property vs. Separate Property

In Washington, community property generally includes any income or assets acquired during the marriage—such as wages, investments, or real estate unless those assets were specifically kept separate. It can also include assets that were originally separate but became commingled with marital property over time (for example, by depositing inherited funds into a joint account).

On the other hand, separate property includes:

• Assets owned prior to the marriage,

• Gifts or inheritances received by one spouse (even during the marriage),

• As long as those assets have not been mixed with community property.

Understanding the distinction between these two types of property is key when creating an estate plan.

What Is a Community Property Agreement?

A Community Property Agreement (CPA) is a legal document available only to married couples in Washington State. It allows spouses to agree that all their assets—both community and separate—should be treated as community property upon death, and that everything should transfer to the surviving spouse without the need for probate.

This tool can be a highly efficient estate planning tool. When one spouse passes away, the CPA allows the surviving spouse to gain full ownership of all assets held in the deceased spouse’s name, bypassing the time and cost associated with probate.

If your primary goal is to give all of your assets to your spouse and you have no concerns about estate taxes, how your spouse will use those assets, or how your spouse will provide for your beneficiaries, then a Community Property Agreement is a great tool.  However, if your intent is to provide for the surviving spouse, but also address the concerns relating to estate taxes, blended family issues, and protections for the surviving spouse, then other estate planning tools available that may be better for you.

If you would like to learn more or have questions about Community Property Agreements, please contact Rehberg Law Group, PLLC at (206)246-8772.