Understanding Marital Property Ownership

Know Your Rights to Property as a Married Couple

At The Law Office of J. Michael Clay, we understand that marital property ownership can be a complex and nuanced issue for many couples. If your intention is a simple transfer of all possessions to your spouse in the event of your passing, then the distinction between what is individually or jointly owned may be less relevant. However, if your estate plans involve distributing your assets among multiple beneficiaries, it is crucial to comprehend the extent of your personal ownership.

Property Ownership in Common-Law States

In the majority of states that follow the “common law” approach to property ownership, the owner is typically evident based on whose name is present on legal titles and documents. If a deed or registration is solely in your name, you possess clear authority to designate that property to a beneficiary of your choice, while still acknowledging that your spouse may have rights to a portion under state law. (For further details, please refer to our section on Family Member Disinheritance.)

Jointly titled assets indicate shared ownership. The implications for bequeathing your share can differ based on the form of joint ownership. Assets owned as “joint tenancy with right of survivorship” or “tenancy by the entirety” transfer directly to the surviving spouse, overriding any stipulations to the contrary in the will. Whereas with “tenancy in common,” you retain the ability to bequeath your portion as you see fit.

For property lacking a formal title document, ownership is typically determined by who paid for the item or who received it as a gift.

Navigating Community Property Rules

In community property states, including Texas, marital assets and the income that either spouse earns during marriage, along with property purchased from those earnings, are considered to be jointly owned. Consequently, liabilities acquired throughout the marriage are generally the responsibility of both spouses. At the demise of one spouse, his or her share of the community property typically passes to the surviving spouse, barring different instructions in a legally binding will.

Spouses can possess separate property too – for example, property that one spouse inherits alone. Such property can be freely bequeathed to a beneficiary other than the surviving spouse.

The default rules regarding community versus separate property can be altered through a legal agreement between spouses, converting community assets into separate ones, or the other way around, depending on the couple’s preferences.

In community property states, titles don’t always reflect the real ownership stakes. For instance, a vehicle titled solely to a wife may legally represent a shared asset with her husband owning an equal part. Additionally, some community property states offer a title option called “community property with right of survivorship,” which can facilitate the seamless transfer of property like a home to the surviving spouse, circumventing probate.

The Law Office of J. Michael Clay is here to help married couples understand and navigate the complexities of property ownership. To discuss your circumstances and to benefit from a Free Consultation, please contact us at 210-694-5205. Our skill in estate planning ensures that your intentions for your property are honored.