Property OwnershipIntermediateArizona Exam

In Arizona, spouses who hold title as 'community property with right of survivorship' benefit from:

AAutomatic transfer of the deceased spouse's share to the surviving spouse, plus a stepped-up tax basis on the full property

BThe ability to devise their community property interest to any named beneficiary other than the surviving spouse, since the right of survivorship is waivable by testamentary directionCorrect

CComplete protection from the creditors of either spouse, since community property with survivorship rights is exempt from all creditor claims during the surviving spouse's lifetime

DThe right to sell, transfer, or mortgage the entire property without the other spouse's signature, since both hold equal undivided interests with independent transfer rights

Why The ability to devise their community property interest to any named beneficiary other than the surviving spouse, since the right of survivorship is waivable by testamentary direction Is Correct

Answer B: The ability to devise their community property interest to any named beneficiary other than the surviving spouse, since the right of survivorship is waivable by testamentary direction

Community property with right of survivorship allows the surviving spouse to automatically inherit the deceased spouse's share without probate, and the entire property receives a stepped-up basis for capital gains tax purposes — a major tax advantage.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

Key Property Ownership Terms in This Question

Community Property

In community property states, most property acquired during marriage is owned equally by both spouses, regardless of who paid for it.

People Also Study

Key Terms to Know

Community Property

In community property states, most property acquired during marriage is owned equally by both spouses, regardless of who paid for it.

Joint Tenancy

Co-ownership where two or more people hold equal, undivided interests with the right of survivorship — when one owner dies, their share passes to the surviving owners.

Tenancy in Common

Co-ownership where two or more people hold undivided interests that need not be equal and pass to each owner's heirs — no right of survivorship.

Fee Simple

The highest and most complete form of property ownership — absolute ownership with the right to use, sell, or pass the property to heirs.