02 Sep How Arizona’s Community Property Laws Affect Your Estate Plan

Only nine states in the U.S. follow community property laws, and Arizona happens to be one of them. If you’re married and living here, this means that nearly everything you and your spouse acquire during your marriage is considered jointly owned. Your joint property can include your home, your income, and even your retirement savings. 

Because of this, community property laws in Arizona play a big role in your estate plan. They determine what counts as community property, what happens when one spouse dies, and how much control you have over your assets.

What Counts as Community Property in Arizona?

In Arizona, most assets earned or acquired during marriage are considered community property, which means both spouses own them equally. 

Community property can include things like:

• Income earned by either spouse during the marriage
• Real estate purchased separately or together
• Retirement accounts funded during the marriage
• Vehicles, furniture, or other property purchased with marital income

On the other hand, separate property includes the assets each spouse owned before the marriage, as well as gifts or inheritances given specifically to one person. 

Why Do Community Property Laws Matter in Estate Planning?

Community property laws limit what you can give away in your to your heirs, because you only own half of any community property. Your spouse owns the other half. 

This means that:

• If you leave your half of the house to your children, your spouse still keeps their half.
• If you don’t have an estate plan, your half of the shared assets will have to go through probate before your heirs can claim it.
• If you and your spouse both pass away, community property rules affect which heirs receive what. 

In other words, your estate plan needs to clearly spell what should happen to your half of the shared property. 

What Happens to Community Property When One Spouse Dies?

In Arizona, when one spouse dies, their half of the community property will be distributed according to their will or trust. If no estate plan exists, Arizona’s intestacy laws apply, and the court will decide how the assets are divided. 

Without a plan, this could lead to:

• Delays and added expenses through probate
• Unintended heirs inheriting property
• Disputes among family members over who should receive what

For instance, if a husband passes without a will, his half of the family home might go through probate before his heirs can inherit—leaving his wife in a stressful limbo. Having a well-structured estate plan in place would have helped to avoid these problems and make the process much smoother for his spouse and children. 

Can Community Property Become Separate Property?

Yes. Couples can use a prenuptial or postnuptial agreement to designate certain assets as separate property. Another option is to move property into a trust to help clarify ownership and protect assets for your heirs, but the timing and type matter.

For example, if you set up and fund a trust before you get married, those assets can usually stay separate. But after you’re married, anything purchased with joint funds is generally considered community property—even if you later move it into a revocable living trust. In that case, protecting it as separate property may require an irrevocable trust or a clear agreement between you and your spouse. 

This flexibility allows you to plan for special circumstances—for example, keeping a family business separate or protecting an inheritance for children from a prior marriage.

Protect Your Community Property with an Estate Plan

Community property laws in Arizona affect nearly every aspect of your estate. Understanding the rules is the first step. The next is creating a plan that avoids costly legal battles and ensures your wishes are carried out. 

At Phelps LaClair, we’ve seen how community property laws can surprise Arizona families—and how the right estate plan can make all the difference. Whether you want to protect your home, pass on retirement savings, or make sure your spouse and children are provided for, we can help you meet those goals. 

Contact us today to schedule a consultation and create an estate plan that gives you peace of mind for the future. 

Images used under creative commons license – commercial use (08/28/25). Photo by Denny Müller on Unsplash