When you get married, you agree to share more than your feelings and the bathroom -- you also share property with your spouse. But what property must you share and what remains your own? It depends on whether the property is separate or community and where you live -- in an equitable distribution state or a community property state.
Knowing who owns what according to the laws of your particular state can be helpful for many purposes, including estate planning, drafting a prenuptial agreement, or if the marriage ends in divorce. Here's an overview of how property ownership works in marriage.
With respect to married couples, there are two types of property: marital property and separate property.
Generally, marital property is everything that either of you earned or acquired during your marriage unless you agree otherwise. So, for example, money you earned at work, put in a joint checking account, and used to pay household bills is marital property. So is the car you bought and made payments on with money from that account.
Separate property belongs only to one spouse. There are some differences in how separate property is defined in different states, but the same general rules apply. The most common forms of separate property are:
- property one spouse owned before the marriage
- gifts received by one spouse before or during the marriage
- property acquired during the marriage in one spouse's name and never used for the benefit of the other spouse or the marriage
- inheritances received before or during the marriage
- property that the spouses agree in writing is separate, as long as the writing meets your state's standards for that type of agreement (called either a transmutation agreement or a post-nuptial agreement)
- property acquired by one spouse using separate property assets with the intention of keeping it separate, and
- certain personal injury awards (in general, the portion of the award that repays you for lost earnings is marital property, while any award for pain and suffering is separate).
Types of Marital Property Ownership Systems
In addition to learning the difference between marital and separate property, you must also figure out what property ownership system your state uses. Some states follow the common law system, and others the community property system -- and the difference determines what gets put into the marital property category.
Common Law States
Most states, except those listed as community property states below, use the "common law" system of property ownership. In these states, it's usually easy to tell which spouse owns what. If only your name is on the deed, registration document, or other title paper, it's yours. If you and your spouse both have your name on the title, you each own a half interest in the property unless the title document says otherwise. If an item doesn't have a title document, generally you own it if you paid for it or received it as a gift.
Community Property States
If you live in a community property state, the rules are more complicated. But in general:
- spouses own equally almost all property either one acquires during the marriage, regardless of whose name the property is in
- half of each spouse's income is owned by the other spouse during the marriage, and
- debts incurred during marriage are generally debts of the couple.
In community property states, the following is separate property:
- gifts given to one spouse
- property either spouse owned before the marriage and kept separate during the marriage, and
The community property states are: Alaska (by agreement), Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (In Alaska, spouses can sign an agreement making specific assets community property.)
Here's a rundown on what is community and separate property in community property states.
Money either spouse earns during marriage
Property owned by one spouse before marriage
Things bought with money either spouse earns during marriage
Property given to just one spouse
Separate property that has become so mixed with community property that it can't be identified
Property inherited by just one spouse
These rules apply no matter whose name is on the title document to a particular piece of property. For example, a married woman in a community property state may own a car in only her name -- but legally, her husband may own a half-interest. Here are some other examples:
A computer your spouse inherited during marriage
Your spouse's separate property
Property inherited by one spouse alone is separate property
A car you owned before marriage
Your separate property
Property owned by one spouse before marriage is separate property
A boat, owned and registered in your name, which you bought during your marriage with your income
It was bought with community property income (income earned during the marriage)
A family home, which the deed states that you and your wife own as "husband and wife" and which was bought with your earnings
It was bought with community property income (income earned during the marriage) and is owned as "husband and wife"
A camera you received as a gift
Your separate property
Gifts made to one spouse are that spouse's separate property
A checking account owned by you and your spouse, into which you put a $5,000 inheritance 20 years ago
The $5,000 (which was your separate property) has become so mixed with community property funds that it has become community property
Keep in mind that you can change the terms of your marital property ownership before your marriage begins with a written agreement (often called a prenuptial agreement). To learn more about prenups, see the Prenuptial Agreements area of Nolo's website.
To learn more about the property ownership rules in your state, and whether a prenuptial agreement is right for you, get Prenuptial Agreements: How to Write a Fair & Lasting Contract, by Katherine E. Stoner & Shae Irving (Nolo).