The majority of states happen to be common law property states. The others are a community property state. When a couple is married, they hardly care about who owns what property in their marital relationship, after a couple goes through a divorce, and when a spouse dies. All these classifications are usually not that significant. However, in case of any unfortunate incident, these details suddenly become quite significant and need to be looked into. One needs to take all these factors into account. Going through the detailed information regarding who owns a marital property below will help you get a better understanding.
What Are Common Law Property States?
Most states in the USA are common law property states. But what does living in a common-law property state imply and who owns what after a couple undergoes a divorce. The term common law is used to determine who owns a marital property. What is marital property? It’s a property that one acquires in a marital relationship.
According to the common law system, the property that one member of a couple in a conjugal relationship acquires is owned completely and solely by that individual. Now, if the deed to a property mentions both the spouses, both of them would own the property. If the title mentions the names of both the spouses, each of them would own one-half of the interest.
For example, if you buy a car and put it in your name, the car would belong to you. If you buy a car and put the car in both your and your wife’s name, both of you would own the car. Coming to any unfortunate incident in marriage, when one of the married people passes away, their separate property will get distributed as per what the will states.
If there is no will, the property will be distributed as per probate. In case it’s joint tenancy with the right of survivorship, the surviving spouse will own the property. The will of the deceased spouse will have no impact on this right of the surviving spouse.
However, if it’s a tenancy in common property, any other individual, aside from the surviving spouse, can own the property as per the will of the deceased spouse. If a couple gets a divorce or goes through a legal separation, the division of the marital property will be done by the court. The couple can sign an agreement that explains how the distribution of the marital property will be done in case of a divorce before they tie the knot.
What Are Community Property States?
Texas, California, Arizona, Washington, Louisiana, Nevada, Wisconsin, Idaho, and New Mexico are the only community property states. According to the law that these states follow, every single asset acquired in marriage is counted as community property. In community property states, marital property is equally owned by both spouses. It can include earnings, the property bought with the earnings, and the accrued debts in marriage.
Community property takes place at the time when a couple ties the knot and gets over when the couple goes through a legal separation and has no intention to rekindle the relationship anymore. As a result, any debt incurred or money earned after this phase will be a separate property altogether. Assets that one acquires after marriage are separate property. The original owner owns these assets. With that being said, a spouse has the right to transfer the title of their separate property as a gift to the other spouse.
Spouses also have the right to mix their separate property with community property. Spouses can add the earnings they had before they tied the knot to the community property funds. What is separate property? It can include the property one spouse owns before marriage, property owned by just one spouse before or during the marriage, and property that one spouse inherits.
Community property includes the money earned by anyone spouse during their conjugal relationship, things that either spouse bought with their earned money during their marriage, and separate property that can’t be identified owing to its mixing with community property.
Equal Division Rule and its Exceptions
Exceptions to the equal division rule happen when one spouse misappropriates the community property, one spouse incurs educational debts, one half of a married couple incurs tort liability, a personal injury award, that has been a community property before marriage but has been transferred to the injured spouse after a divorce.
A division of marital property after divorce or the death of a spouse has never been an easy topic to talk about. You can always take the help of a professional if you need it.