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Q.How is community property different from Community Property with the Right To Survivorship?
A.Where a married couple owns property in their own names (not in trust and not in a limited liability company), the title to the property is typically held as either: (1) joint tenants or as (2) community property.
Spouses holding title in community property get the advantage of a stepped up cost basis in the property upon the death of the first spouse. What this means is that at the death of the first spouse, the cost basis in the property is automatically increased to its then fair market value for capital gains purposes such that if the surviving spouse were to sell the property no capital gains tax would be owed. The disadvantage of holding title as community property is that it requires at least one probate court hearing to transfer the property.
Community Property with the Right To Survivorship not only maintains the same cost basis increase, but also allows for transfer of the property upon the death of the first spouse simply by recording an affidavit of death of spouse.
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