Determining Ownership Of Marital Property

Marriages and divorces are granted at the state level. This means state laws also dictate property ownership during a marriage and how that same property is divided at the time of a divorce.

While the question of marital property ownership may not seem important when a couple is married, it becomes an essential determination if that couple divorces or in the event of a death.

The way property is treated under these circumstances largely depends on whether the couple resides in a common law property state or a community property state.

Common Law Property States

In common law property states, property owned by one spouse and put solely in their name is considered that spouse’s property alone. The majority of states are common law property states. Even though a couple is married, common law states allow each spouse to acquire property individually. For example, if a husband purchases a motor vehicle and puts the title in his name, he would be considered the sole owner of it.

However, a vehicle title or property deed that is put under both spouses’ names is considered jointly owned property in common law states. The term common law simply gives spouses the option to own property individually even though they are married.

Of course, couples can always consult with a Long Beach family law attorney and draft a prenuptial agreement prior to entering into a marriage. Doing so would determine property distribution regardless of the type of state couples married in.

Community Property States

Far fewer states are considered to be community property states. Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are all considered community property states for the purposes of distributing marital property.

Unlike common law states, spouses in community property states are not always given the option to own property separately. Instead, property acquired from the time they marry until they separate with the intention to divorce is considered equally owned by both spouses. Common examples of community property include:

  • Money earned by either spouse throughout their marriage
  • Items purchased with money earned by either spouse
  • Comingled property that cannot be identified as separate property

This 50/50 split applies to all income and earnings, property purchased, and debts acquired throughout a marriage. Property purchased before a marriage or after a couple intends to divorce, is not considered community property and, instead, is viewed as separate property. Common examples of separate property include:

  • Inheritance of one spouse
  • Property owned prior to a marriage
  • Property gifted to one spouse before or during a marriage

In some situations, separate property can become community property. For example, separate property that is gifted to one spouse from another then becomes community property. Similarly, separate property can be combined with community property where it becomes impossible to separate the two. If property cannot definitely be determined to be separate, it will be counted as community property.

Of course, there are some exceptions to these rules. For example, if one spouse misappropriates or misuses community property it will affect how that property is ultimately divided during divorce. Similarly, damages awarded as part of a personal injury claim are initially considered community property but in the event of a divorce will be awarded to the spouse who suffered the injury.

Individual states will determine the ownership of property during a marriage and at the time of a divorce. Whether that state is considered a common law or community property will ultimately decide how marital property is divided.