Separate Property May Become Community Property if it is commingled.
I recently received a call asking for clarification of a Senior Tip I wrote a few months ago. Below is the answer to the question. The call made me think that there may be others with questions that they would like answered. If you have a question that you would like me to address in a Senior Tip, you are welcome to call me or email me at firstname.lastname@example.org.
The previous Senior Tip discussed how community and separate property are treated differently under Idaho inheritance laws. The question that was asked was how do you know whether property is community property or separate property.
Here are the definitions of separate property and community property:
- All property the husband or wife owned before marriage, and all property acquired during the marriage by gift or inheritance, and any proceeds from this property, is considered separate property. (Idaho Code § 32-903)
- All other property acquired during the marriage by either husband or wife is community property. (Idaho Code § 32-906.)
Here are a few examples of the different ways separate and community property are treated under Idaho law:
- As to community property, the surviving spouse will inherit all the deceased spouse’s community property and ½ of the separate property. The other ½ of the separate property will pass to the surviving parents or children of the decedent. (Idaho Code § 32-102)
- The separate property of one spouse is not liable for the debts that the other spouse contracted before the marriage. (Idaho Code § 32-910-11)
- Either spouse alone can incur a debt that obligates their community property, but not the separate property of the other spouse. However, as to the community property, both spouses must sign to purchase or sell real property. (Idaho Code § 32-102)
If a husband or wife brings separate property into a marriage and commingles it either with the community property or the separate property of the other spouse, it may be converted into community property. For example, if you receive an inheritance, and you deposit the money into a community bank account it will become community property. If each spouse sells their home, and they buy a new home together with the proceeds of their sales, the new home will be community property.
You can give your separate property, or ½ of your community property to whomever you want after your death, but you must have a Will to do so. If you don’t have a Will, your property will be distributed by the laws of the state as explained above.
Many people, not understanding these laws, make decisions that produce results they did not intend.
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.