Community Property and CPWROS in Arizona Probate

Arizona Community Property: The Basics

Under Arizona Revised Statutes § 25-211, all property acquired by either spouse during marriage while domiciled in Arizona is community property — with each spouse owning an undivided one-half interest. This applies regardless of whose name is on the account or deed.

When one spouse dies, only the decedent's one-half of community property passes through the estate. The surviving spouse already owns their half — it does not go through probate.

Arizona's Four Title Options and Their Probate Implications

The table highlights why CPWROS is such a powerful title option: it combines the automatic survivorship transfer of joint tenancy (no probate) with the full step-up in basis of community property (lower capital gains tax for beneficiaries).

What Is CPWROS and How Does It Work?

Community Property With Right of Survivorship (CPWROS) is a special vesting option authorized under ARS 33-431. When spouses take title to property as CPWROS, they retain the community property character of the asset — meaning both halves receive a full step-up in tax basis at the first death — but they also add a survivorship right, meaning the entire property transfers automatically to the survivor when one spouse dies.

To hold property as CPWROS, the deed must expressly state "as community property with right of survivorship." The vesting language matters — a deed that simply says "community property" without the survivorship language does not carry CPWROS status.

How to Confirm Title at Death

Look at the most recently recorded deed for each property. The vesting section of the deed will specify how title is held. If it reads "community property with right of survivorship," CPWROS applies. If it reads "community property" only, or if the survivorship language is absent, the property does not have CPWROS status.

Check the deed at the county recorder's website before drawing any conclusions about whether probate is needed for real estate.

What Happens When One CPWROS Spouse Dies

When one spouse dies and the property is held as CPWROS:

1. The property passes automatically to the surviving spouse — no probate, no court involvement.
2. The surviving spouse records an Affidavit of Survivorship with the county recorder in the county where the property is located.
3. The Affidavit of Survivorship should be accompanied by a certified copy of the death certificate.
4. After recording, the surviving spouse is the sole title holder and can sell, refinance, or re-title the property.

The Tax Advantage: Full Step-Up in Basis for Both Halves

Both community property and CPWROS receive a full step-up in cost basis at the death of the first spouse — meaning both halves of the property are revalued to fair market value at the date of death. This is a major tax advantage compared to joint tenancy, where only the deceased joint tenant's half gets a step-up.

The CPWROS arrangement provides both automatic transfer (no probate) and the most favorable tax treatment. Compared to holding property in joint tenancy, CPWROS is almost always the better choice for Arizona married couples who want to avoid probate on real estate.

Community Property vs. Separate Property in Arizona

Not all property is community property. Arizona law (ARS 25-213) designates the following as separate property:

• Property owned by either spouse before the marriage
• Property acquired during marriage by gift or inheritance
• Property acquired from the proceeds of separate property
• Property designated as separate property in a valid prenuptial or postnuptial agreement

Separate property passes entirely through the decedent's estate — 100% of its value, not just half. For estates containing significant separate property (pre-marital real estate, inherited assets), this distinction substantially affects how much of the estate goes through probate.

Arizona Beneficiary Deeds: Another Probate-Avoidance Tool

Arizona also allows property owners to record a Beneficiary Deed (ARS 33-405), which designates a beneficiary who receives the property automatically at death — without probate. Unlike CPWROS (which only works between spouses), a beneficiary deed can designate any person as the beneficiary.

If the decedent recorded a beneficiary deed before death:

• The designated beneficiary records an Affidavit of Death with the county recorder to clear title
• No probate court involvement is needed for that property
• The beneficiary deed can be revoked at any time before death by recording a new deed or a revocation

Always check the county recorder's records for any recorded beneficiary deed before assuming real property must go through probate.

More Arizona Probate Guides

• Arizona Small Estate Affidavit: Two Paths — Personal and Real Property
• Arizona Probate Timeline: Key Deadlines for Personal Representatives