Marriage & Property Ownership: Who Owns What?

Who owns marital property and to whom can they leave it?

Married couples usually own most, if not all, of their valuable property together. If you want to leave everything to your spouse, 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 just what's yours to leave. 

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. You are free to leave your property to whomever you choose, subject to your spouse's right to claim a certain share after your death. (For more information, see Inheritance Rights.)

If you and your spouse both have your name 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 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. But if you instead 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.

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. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. (In Alaska, spouses can sign an agreement making specific assets community property.)

Generally, in community property states, money earned by either spouse during marriage and all property bought with those earnings are considered community property that is owned equally by husband and wife. Likewise, debts incurred during marriage are generally debts of the couple. At the death of one spouse, his half of the community property goes to the surviving spouse unless he left a will that directs otherwise.

Married people can still own separate property. For example, property inherited by just one spouse belongs to that spouse alone. A spouse can leave separate property to anyone; it doesn't have to go to the surviving 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:

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

Some community property can avoid probate. Several community property states offer an advantageous way of holding title to community property that avoids probate at the death of the first spouse. It's called "community property with right of survivorship." If a couple holds title to property -- a house, for example -- in this way, when one spouse dies the property will automatically belong to the survivor, without any probate court proceedings.

If you are ready to take charge of your estate planning, get Busy Family's Guide to Estate Planning: 10 Steps to Peace of Mind, by attorney Eliza Weiman Hanks (Nolo). It provides the information you need to plan for the future, including how to draft a simple will.