Ashford International Law P.C.

Before the estate of a married person, the tax planner must first determine what the matrimonial property regime is. Sometimes this regime determines what property is included in the U.S. taxable estate. In some cases, it affects whether a spouse qualifies for the marital deduction. Statuses on this page are stated as of September 2026.

The couple’s domicile and the location of the property determine which law governs the regime. Since U.S. persons are taxed on their worldwide estates and gifts, the regime that applies to U.S. citizens and residents is relevant to the U.S. estate and gift tax, even if the regime is that of a foreign country.

What a matrimonial property regime is

A matrimonial property regime is the set of rules that determine which spouse owns which property during the marriage and after the first spouse’s death. In the United States, the regime is called “common law” or “community property,” depending on the state. In civil law countries, the regime is typically either separate property or community property, and within each, there are variations.

The regime is established either by law (the statutory default) or by an agreement signed before or during the marriage, often called a prenuptial agreement, postnuptial agreement, or marriage contract. In some countries, the regime can be changed during the marriage; in others, it cannot.

The three families of regimes

Matrimonial property regimes fall into three main families: separate property, community property with unequal division at death, and community property with equal division at death.

In separate property regimes, each spouse owns the property he or she acquires, and the surviving spouse has limited rights in the deceased spouse’s property. This regime is the default in common law countries and in some civil law countries.

In community property regimes with unequal division, spouses co-own certain property acquired during the marriage (the community), but the surviving spouse’s share of the community is typically one-half or one-third. Germany and Switzerland use this type of regime for their statutory default.

In community property regimes with equal division, the surviving spouse’s share of the community is one-half, as in France. Some countries allow the spouses to choose.

Germany and Switzerland: the equalization at death

In Germany, the statutory matrimonial property regime is separation of property with a post-mortem equalization. Upon the first spouse’s death, the surviving spouse is entitled to one-quarter of the net estate if there are children, or one-half if there are no children. This right of equalization exists independently of the couple’s will.

Switzerland’s regime is similar. The surviving spouse is entitled to one-half of the net community property if there are children, or one-half of the entire net estate if there are no children. The surviving spouse’s entitlement is an absolute right, not dependent on the will.

Which law governs a couple that has moved

A couple that has moved from one country to another may be subject to different matrimonial property laws at different stages of their marriage. The general rule is that the matrimonial property regime is governed by the law of the country where the spouses had their “habitual residence” at the time of marriage, or by the law of the country of their nationality, depending on the law of the relevant jurisdiction.

Under the Hague Convention on the Law Applicable to Matrimonial Property Regimes (1978), which has been adopted in several European countries, the spouses’ matrimonial property regime is determined by the law they choose, or, in the absence of choice, by the law of the country of their common nationality, or, in the absence of common nationality, by the law of the country of their habitual residence at the time of marriage.

The effect on the U.S. estate and gift tax

The regime directly affects the U.S. estate tax in several ways. First, it determines what property is included in each spouse’s taxable estate. Second, it may determine whether a surviving spouse qualifies for the unlimited marital deduction under I.R.C. Section 2056. Third, it affects the application of the gift tax under I.R.C. Section 2501 to inter-spousal transfers.

As the Supreme Court held in United States v. Davis, 370 U.S. 65 (1962), the value of property transferred by gift is determined under federal law, not state law. However, the determination of what property was transferred depends on state law, which includes the matrimonial property regime.

Consider a couple with a community property regime. If the husband transfers his one-half share of community property to a third party, the transfer is a gift of his one-half. But if the wife has consented to the disposition, her interest may not be included in the taxable gift. The question is whether the wife’s consent is effective under applicable law. In some regimes, such consent is not possible; in others, it is.

The case of Estate of Charania v. Commissioner, 953 F.2d 435 (9th Cir. 1992), illustrates these principles. The decedent was a U.S. citizen domiciled in California, which is a community property state. The decedent’s wife survived him. The Tax Court held that the decedent’s one-half of the community property was included in the decedent’s taxable estate. The Ninth Circuit affirmed, noting that under California law, the surviving spouse’s right to the community property is not a right that arises from the decedent’s will or from federal law, but from state law.

Jurisdiction	Statutory default regime	Surviving spouse’s position at the first death
United States (common law)	Separate property	Spouse inherits under the will or by intestacy; no automatic right
United States (community property states)	Community property	Spouse owns one-half of community property automatically
Germany	Separate property with post-mortem equalization	Spouse is entitled to equalization if there are children; otherwise to one-half of the net estate
Switzerland	Community property	Spouse is entitled to one-half of community property; one-quarter of other property if there are children
France	Community property with equal division	Spouse is entitled to one-half of community property

Changing the regime

In some countries, spouses may change their matrimonial property regime during the marriage. In others, the regime established at the time of marriage cannot be changed. The U.S. community property states generally allow spouses to change the regime, though the procedure varies.

Germany permits change only by agreement filed with the court. Switzerland allows change by agreement registered with the civil registry. France allows change only for certain regimes and only once during the marriage.

A change of regime affects only prospective property; it does not affect property already acquired. However, depending on the applicable law, it may have gift tax consequences.

How the firm assists

When advising a married client, we always determine the applicable matrimonial property regime. We explain the regime to clients and analyze its effect on the U.S. estate and gift tax. We structure the client’s plan accordingly, which may include a change of regime, a prenuptial or postnuptial agreement, or a specific disposition plan.

In particular, we consider whether the regime produces an unwanted result for federal tax purposes, and whether the client can enter into an agreement to change the regime or to obtain consent of the other spouse for a particular transaction. An agreement signed before any return is filed or any marriage contract is signed is often the most efficient solution.

Planning Consideration	Separate Property Regime	Community Property Regime
Each spouse’s estate planning	Each spouse plans independently for his or her own property	Spouses plan jointly for community property and separately for separate property
Marital deduction	Marital deduction applies to property left to the surviving spouse	Marital deduction may apply to one-half of community property if left to the surviving spouse
Basis step-up	Only deceased spouse’s property receives basis step-up	Community property receives basis step-up on 100% of value at death in many states
Lifetime gifts	Each spouse may gift his or her own property	Community property may not be gifted by one spouse without consent