Navigating Matrimonial Assets: Understanding Ownership & Estate Planning

Understanding the Division of Marital Property and Estate Inheritance

At Goldberg & Goldberg, we recognize that married couples commonly share ownership of their most valued assets. Particularly, when spouses intend to leave their entire estate to one another, distinguishing personal ownership is less consequential. However, should you aim to allocate your assets among various heirs, elucidating the extent of your individual property becomes imperative.

Property Ownership in Common-Law States

Across the majority of the United States, with the exception of Community Property States delineated below, the “common law” system prevails concerning property ownership. Determining which spouse possesses what under this system is typically straightforward. If a title or deed showcases solely your name, the property is yours, enabling you to bequeath it as per your wishes, albeit considering any statutory entitlements of your spouse upon your passing.

Conversely, if a property’s title lists both you and your spouse, each of you holds a fifty percent stake. Your liberty to dispose of or bequeath this stake is contingent upon the form of joint ownership practiced. Property held as “joint tenancy with right of survivorship” or “tenancy by the entirety” seamlessly transitions to the surviving spouse upon the other’s death, notwithstanding contrary stipulations in the will. However, “tenancy in common” ownership permits bequeathing your share to an alternative beneficiary.

As for personal goods without a title, those purchased or received as gifts by you are typically regarded as your property.

The Intricacies of Community Property States

In Community Property States, asset division is nuanced. These states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin, with some other states offering an opt-in choice for community property agreements.

In these jurisdictions, money earned and property acquired with said earnings during the marriage are typically treated as equal property between spouses, as are the debts incurred therein. Upon one spouse’s death, their share of the community estate customarily defaults to the surviving spouse unless dictated otherwise via will.

Nonetheless, separate property—like an inheritance bestowed upon a solitary spouse—remains individually owned and can be designated to a beneficiary of choice, beyond the surviving spouse.

These principles tend to apply regardless of the name on property titles. For instance, a vehicle solely in a wife’s name in a community property state might still legally constitute a shared asset with her husband. Additional considerations include:

Amending Ownership Through Written Agreements. Couples can redefine the default community property boundaries by signing prenuptial or postnuptial agreements, ultimately transmuting community property to separate assets and vice versa.

Probate-Free Transfers for Some Community Property. Several states endorse a unique form of community property title, known as “community property with right of survivorship,” which expedites the transfer of assets without probate involvement upon the first spouse’s death.

For a comprehensive analysis of your marital assets and tailored estate planning advice, reach out to Goldberg & Goldberg. Our insights can guide you through these complex legal dynamics to ensure your property is bequeathed exactly as you intend.

Contact us today for a free consultation at (301) 654-5757.