The United States has two marital-property systems. Nine community-property states treat most property acquired during marriage as owned equally; the rest are separate-property (common-law) states that protect a surviving spouse through an elective share. The regime affects ownership, spousal protection, and — critically — income-tax basis, and it creates traps for clients who move between systems.
- Community property (AZ, CA, ID, LA, NV, NM, TX, WA, WI; AK/FL/TN/SD by election)
- Each spouse owns an undivided one-half of community property; each can devise only their half. Separate property (pre-marriage, gifts, inheritances) stays separate.
- Separate property / common law
- Property belongs to the titled spouse; the survivor is protected by an elective (forced) share — typically one-third to one-half, sometimes on a sliding scale by length of marriage under the UPC augmented-estate approach.
The double step-up
A major community-property advantage: at the first spouse's death, BOTH halves of community property receive a basis step-up under IRC 1014(b)(6) — not just the decedent's half. Community property with right of survivorship, and community property trusts in elective states (Alaska, Tennessee, South Dakota, Florida, Kentucky), can extend this benefit.
Key takeaways
- Community-property states give each spouse half and, importantly, a double basis step-up at the first death.
- Separate-property states protect the survivor with an elective share, often computed on an augmented estate and waivable by marital agreement.
- Interstate moves change property character, elective-share exposure, and basis planning — always re-review after a relocation.
Authorities
- IRC 1014(b)(6) (community-property double step-up)
- Uniform Probate Code 2-201 to 2-214 (elective share/augmented estate); Uniform Disposition of Community Property Rights at Death Act