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, 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. 

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.

Community Property	Separate Property
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:

Property	Classification	Why
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	Community property	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	Community property	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	Community property	The $5,000 (which was your separate property) has become so mixed with community property funds that it has become community property

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.

Creating A Simple Will

You've heard that if you do nothing else to take care of your legal affairs, you should write a will, and it's pretty good advice. If you don't make a will before your death, state law will determine who gets your property and a judge may decide who will raise your children (and either or both may not be whom you would have chosen). Writing such an important document can be daunting, but it doesn't need to be.

If all you need is a basic will, you can confidently use a good do-it-yourself book or software to make a legally binding will that:

• leaves your property to the people and organizations you choose
• names a guardian to care for your minor children if you can't
• names someone to manage property you leave to minor children (yours or someone else's), and
• names your executor, the person with authority to make sure that the terms of your will are carried out.

When a Basic Will Is Enough

By and large, if you are under age 50 and don't expect to leave assets valuable enough to be subject to estate taxes, you can probably get by with only a basic will. But as you grow older and acquire more property, you may want to engage in more sophisticated planning -- we go into these details below.

Take a common situation where a husband and wife want to leave their property to each other or, if they die together, to their children in equal shares. They also want to name a personal guardian for their children. They can safely make simple wills themselves without hiring a costly expert. (See Nolo's article Making a Will: Are Lawyers Optional?)

Here are a few other examples of real-life situations where a basic will is all that's needed.

• Heather and Jerome, in their late 30s, own a home, two cars, and some savings. Their net worth totals $400,000. They have one child, Mark, age 11. Each prepares a will leaving all his or her property to the other. If they die at the same time, Mark is to receive all their property. Heather and Jerome agree that Heather's brother will care for Mark and manage the property until Mark turns 18.
• Sam, a widower with three grown children, owns property with a net worth of $510,000. He creates a will leaving all his property equally to the children. He specifies that if any child dies before him, that child's share is to be divided equally between the surviving children.
• Barbara is a single mother with two teenage children. Though she's not on great terms with her ex-husband, he's a decent father and pays child support more or less on time. Barbara's will leaves all her property equally to her children. Because she does not want her ex-husband managing money left to her children if she dies, she uses her will to appoint her sister Debbie to manage each child's property until that child turns 18.

Will a Basic Will Avoid Probate?

No. If you leave anything more than a small amount of property through a will, probate court proceedings will probably be necessary after your death. Although it varies from state to state, probate can take six months or a year and eat up three to five percent of your estate in lawyers' and court fees. And your beneficiaries will probably get little or nothing until probate is complete.

But if you need only a basic will, you have little reason to concern yourself now with probate. If you're relatively young and healthy and you don't have piles of money, your real concern is to make legal arrangements for the statistically unlikely event that you will die suddenly and unexpectedly. You've almost certainly got plenty of time to plan for probate avoidance later.

If you want to plan for probate avoidance now, see Nolo's article How Living Trusts Avoid Probate.

Is a Basic Will for You?

If the following statements describe you, a basic will is probably enough:

• You're under age 50.
• You're in pretty good health.
• You don't expect to owe estate tax at your death.

On the other hand, if one of the following applies to your situation, then you probably need something more than a basic will:

• You expect to owe estate tax you die or when your spouse does. (See Nolo's Estate Tax area.)
• You want to control what happens to property after your death -- for example, you want to leave some property in trust for your child and have it go to your grandchildren when your child dies.
• You have a child with a disability or other special need that you wish to address in your estate plan. (See Special Needs Trusts.)
• You have children from a prior marriage and you fear conflict between them and your current spouse.
• You think someone might contest your will, claiming that you were not mentally competent when writing it, or that the will was procured by fraud or duress.