What is the scope of the "community property" concept? Does it have any practical meaning in the scope of day-to-day finances for a married couple or does it apply to their finances only if divorcing?
Investopedia breaks down "community property" thus:
In community property jurisdictions, each spouse in a marriage is considered to own a share of the marital assets, including any financial or real assets acquired during the marriage.
There are a few notable exceptions (including gifts) and not all participating states treat this the same, but broadly speaking, this can be thought of as "joint ownership" of all financial assets.
There are a great many references to community property and the often resulting 50/50 split of assets during a divorce, so its scope undoubtedly pertains in that realm.
But does it equally apply and have immediate ramifications during an active and ongoing marriage?
What follows is a partially hypothetical example, to hopefully clarify the question:
My wife and I each had no significant assets when we married but have acquired quite a bit in the decades that have followed. Specifically, though, I have generated none as a stay-at-home spouse, while my wife has accumulated a net worth of $4M as a combination of stocks, real estate, and a 40% majority stake in a company. All accounts are exclusively in her name and none are explicitly noted as being "joint". We have lived in a community property state our entire marriage.
If we were to divorce, then -- barring any other agreement -- I would definitely be entitled to $2M of that, presumably even to the level of acquiring a 20% stake in that firm.
What's not clear is what effect living in a community property state has on our shared finances right now. Do I have, in reality, full joint ownership of the entire $4M and thus, full access to all of the associated accounts, even though none are technically in my name? Or are they accessible only by my wife and my so-called "joint ownership" is purely virtual until such time that the assets need to be divided?