Marriage & Property Ownership: Who Owns What?

Married couples usually own most, if not all, of their valuable property together. If you want to leave everything to your spouse when you die, as many people do, you don't need to worry about what belongs to you and what belongs to your spouse. If you'd rather divide your property among several beneficiaries, you'll need to know what's yours to leave.

Common Law States: Ownership by Title

Most states (except the community property states listed below) use the "common law" system of property ownership. In these states, it's usually easy to tell which spouse owns what. Look at the deed, registration document, or other title paper: If you're the only person named, the property is yours. You are free to leave your property to whomever you choose.

If an item doesn't have a title document, generally, you own it if you inherited it, paid for it with money you earned, or received it as a gift.

To protect spouses from being disinherited, most common law states have an exception to these rules: A surviving spouse can often claim one-third to one-half of the deceased spouse's estate, no matter what a will or title says. (Learn more about inheritance rights.)

Joint Ownership

If you and your spouse have joint ownership of the property—meaning both of your names are on the title—you each own a half-interest in the property. Your freedom to give away or leave that half-interest depends on how you and your spouse share ownership.

• If you own the property in "joint tenancy" (also called "joint tenancy with right of survivorship") or "tenancy by the entirety," the property automatically belongs to the surviving spouse when one spouse dies—no matter what the deceased spouse's will says.
• If you own the property in "tenancy in common" (less likely), then you can leave your half-interest to someone other than your spouse if you wish.

Purchasing Real Estate During Marriage

In many states, the general rule is that property purchased during marriage is marital property, regardless of whether one or both spouses are named on the title. This rule often begs the question of whether both spouses must sign real estate purchase documents when only one spouse wants to buy property. For example, say one spouse inherited a sum of money—which would mean that those funds are the spouse's separate property—and wants to use it to buy property. Does the other spouse still have to sign off on the purchase?

In most states, only the purchasing spouse must sign the purchase offer. Sometimes, though, the title company might require the non-purchasing spouse to sign a document acknowledging that their spouse is making the purchase and waiving any rights of ownership in the property. To avoid confusion, it might be a good idea for spouses to sign an agreement clarifying that the property belongs only to the purchasing spouse.

A word of warning: Just because only one spouse signed the purchase documents or is on the deed does not guarantee that the property would be considered that spouse's sole property in the event of a divorce or at death. Purchasing spouses must be vigilant about how they pay for and maintain their separate property—if they use community or marital property funds at some point to pay off the mortgage or pay for maintenance of the property, the non-purchasing spouse might acquire an interest in the property.

Purchasing Property With a Mortgage

A non-purchasing spouse might have to sign some purchase documents when the purchasing spouse is getting a mortgage on the property. In most cases, the lender will require the non-borrowing spouse to sign at least a few loan disclosure documents. These documents won't necessarily make the non-borrowing spouse responsible for paying off the mortgage, but instead serve to protect the lender's rights.

Because state law and lender practice vary, it's a good idea to contact a local real estate attorney before signing anything. A lawyer can let you know what each spouse really needs to sign, and can advise the spouses on steps to take to ensure that the property remains solely the purchasing spouse's property.

Community Property States

The rules are different when you live in one of the states that use the "community property" system of property ownership in marriage. Here's a list of the community property states, with links for more details:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington, and
• Wisconsin.

What Is Community Property?

Community property is property that is owned equally by the spouses. In community property states, money earned by the spouses during marriage and all property bought with those earnings are generally considered community property. Likewise, spouses are equally responsible for debts incurred during marriage. When one of them dies, that spouse's half of the community property goes to the surviving spouse unless there is a valid will that directs otherwise.

Community property includes:

• money either spouse earns during marriage
• things bought with money either spouse earns during marriage
• separate property that has become so mixed ("commingled") with community property that it can't be identified as separate, and
• separate property that has been transferred to the community, or
• separate property that has been "transmuted" (or "transformed"), such as when a spouse contributes separate property funds to buy a community property house.

What Is Separate Property in a Community Property State?

Living in a community property state doesn't mean that a married person can't own their own property. Property that is owned by only one spouse is "separate property." A spouse can leave separate property to anyone.

Separate property includes:

• anything you owned before you got married
• gifts (as long as they were given to you only, not to both you and your spouse), and
• any money, property, or other items that you inherited.

Generally, these rules apply no matter whose name is on the title document to a particular piece of property. For example, if you live in a community property state and own a car with the title in your name only, your spouse might still own a half-interest in the vehicle.

Examples of Community vs. Separate Property

Here are some other examples to illustrate the differences between separate and community property:

Opting Out of Community Property Ownership

Married couples don't have to accept the rules about what is community property and what isn't. They can sign a prenuptial agreement, postnuptial agreement, or other written agreement that makes some or all community property the separate property of one spouse, or vice versa.

Avoiding Probate

Several community property states offer a way of holding title to community property that avoids probate when one spouse dies. It's called "community property with right of survivorship." If a couple holds this type of title to property—a house, for example—the property will automatically belong to the survivor when a spouse dies, without any probate court proceedings.

States Where You Can Opt In to Community Property Ownership

In a few states (listed below), married couples can opt in to the community property system or designate specific assets as community property.

Alaska

In Alaska, spouses can opt in by creating a community property agreement that states all (or some) property and income acquired by the spouses during the marriage is considered community property. Spouses can also establish a community property trust, which covers specific assets—all property transferred to that trust will be treated as community property. (See Alaska Stat. §§ 34.77.010—34.77.995 (2024).)

Florida

In Florida, spouses can create a "community property trust." To create the trust, spouses must follow certain rules. For example, the trust must state that it is a community property trust and be signed by both spouses. (See Fla. Stat. §§ 736.1501—736.1512 (2024).)

Kentucky

In Kentucky, spouses can create a "community property trust." The trust must state that it is a "Kentucky community property trust" and must have a warning about the legal consequences of putting property into the trust. Any property the spouses transfer to this trust will be treated as community property. (See Ky. Rev. Stat. §§ 386.620—386.624 (2024).)

South Dakota

In South Dakota, spouses may create a "South Dakota special spousal trust," which must include a written declaration that the property is "community property." Any property the spouses transfer to this trust will be treated as community property. (See S.D. Codified Laws §§ 55-17-1—55-17-14 (2024).)

Tennessee

In Tennessee, spouses can create community property rights to property or assets that they transfer to a valid community property trust. Among other requirements, the trust must state that it is a "Tennessee community property trust" and must have a specific warning about the legal consequences of putting property into the trust. Any property the spouses transfer to this trust will be treated as community property. (See Tenn. Code §§ 35-17-101—35-17-108 (2024).)

Next Steps

If you're ready to make your estate planning documents, you can create a customized will today using Nolo's Quicken WillMaker. Or if you want a lawyer's help or advice, contact an estate planning attorney.