Idaho is a community property state.
In the United States, there are only 10 states that are community property states—Idaho is one of them. It’s a good idea to know how community property laws work. Let’s talk about how some of these laws affect us in our daily lives.
First, there are two types of property: community and separate. Community property is all the property and income obtained by either spouse during the marriage. Either spouse has the right to control or obligate the community property. However, to sell or encumber real property requires the signature of both spouses.
Debts that are incurred by either spouse during the marriage are owed by both spouses—even if a debt is incurred in only one of the spouses’ names. A creditor can garnish money from a joint account, or even an account titled in the name of the spouse that did not incur the debt. It’s wise to pay attention to debts being incurred by your spouse.
Separate property is all property owned by either spouse before marriage, or acquired by either a gift or an inheritance. The husband or wife cannot obligate the separate property of the other spouse.
The nature of property, whether community or separate, affects how property passes when you die. If you die without a Will and have a surviving spouse, but no children, all your community and separate property passes to your spouse. However, if you have surviving children, they would get half of the separate property, but none of the community property.
If you have a Will, you can give half of the community property and all of your separate property to whomever you designate in the Will. Be aware, however, a surviving spouse can claim a homestead allowance of $50,000 that has priority over other gifts in the Will unless you state in the Will that that is not your intention. This can create problems when there has been a second marriage, if you intend for the property to go to your children.
In addition, Idaho law allows spouses to prepare a Community Spouse Deed, which transfers the title of real property (such as a house) to the surviving spouse, without going through probate. This is done by simply recording a death certificate, saving both time and money.
There are many more Idaho laws that govern what happens to our community and separate property when you pass away. To have things happen the way you want, it’s a good idea to have a Will that clearly states your intentions.
Tom Packer is an Elder Law Attorney serving all of Southeast Idaho. As part of his law practice, Tom offers Life Care Planning to deal with the challenges created by long-term illness, disability and incapacity. If you have a question about a Senior’s legal, financial or healthcare needs, please call us.