Estate planning, which involves creating wills and trusts, frequently deals with two important concepts: community property and ademption. These are especially relevant in states like Nevada, which operates under community property.
Community Property Explained
Community property is a legal principle that presumes assets acquired after marriage are equally owned by both spouses. This means that even if a property, like a house, is purchased in one spouse’s name, it is still considered jointly owned under the law. This presumption applies unless there is a written agreement stating otherwise.
For example, if a couple buys a car after getting married and only the husband’s name is on the registration, the law still considers the wife to have equal ownership. This joint ownership applies to various assets, including real estate, vehicles, and bank accounts, reflecting the shared nature of property in the marriage.
Can Spouses Own Separate Property Post-Marriage?
Yes, spouses can own separate property after getting married. While the default assumption is that property acquired post-marriage is community property, spouses can sign a written agreement specifying certain assets as separate property. This agreement effectively changes the nature of ownership from community to separate property.
Exceptions to Community Property
There are other exceptions to the community property rule. For instance, if you inherit something after getting married, that inheritance is considered your separate property, not part of the community property unless a written agreement is signed making it communal.
Understanding Ademption
Ademption arises when specific gifts mentioned in a will or trust no longer exist at the time of a person’s death. For example, if you leave a particular property to someone in your will but sell that property before you die, that gift is considered adeemed, or more simply, void. The beneficiary won’t receive that specific property, as it’s no longer part of the estate.
Situations such as this underscore the importance of regularly updating a will to reflect current assets. When you give specific gifts in your will or trust, you need to ensure those assets will likely be part of your estate at your death. Ademption primarily affects bequests of particular items rather than general gifts of value, making precise and up-to-date estate planning essential.
Community property and ademption are complex but vital aspects of estate planning. Learning about these concepts helps you to understand how your assets will be distributed after your death. Consulting with an experienced attorney in estate planning is essential to ensure your wishes are clear and that your intentions are carried out as desired.