Legal Question in Wills and Trusts in Washington

Re: community property

Not sure if the person that told you how to list the accounts got it quite right. Community Property is really just a characteristic of the property (as opposed to separate property). In a CP state is really just means that in the case of divorce the property each spouse would own 50% of the property (perhaps the decree would allocate the property differently depending on the circumstances but you get the jist of it). If you own community property at death, it typically just means that 50% of the property falls under your estate and 50% is considered your spouse's property (not in your estate).

In CP states spouses can execute a Community Property Agreement. The essence of this document is that all community property vests in the surviving spouse. Because it is a contract, it can avoid the probate process. Please see an attorney before executing such a document.

Holding property as joint with right of survivorship can also avoid probate. However, it can have a negative impact on capital gains taxes because on the death of the first spouse only 50% of the value of the account steps up -- depending on the asset.

Tenants in common provides no assumption as to the community or separate character of the property or the avoidance of probate upon the death of the first spouse.

My suggestion is that you complete your estate plan -- wills (or trust) and (perhaps) community property agreement after speaking with an attorney. At that time you can discuss the proper classification of your various banking, investment and retirement accounts.