Legal Definitions - common-law-property state

A common-law-property state is a jurisdiction where the legal rules governing property ownership, particularly between married spouses, are primarily derived from historical English common law principles. In these states, property acquired during a marriage is generally considered to belong to the individual spouse who earned it or whose name is on the title, rather than being automatically co-owned by both spouses equally.

Upon divorce, courts typically divide marital property using a principle called equitable distribution, aiming for a fair, though not necessarily equal, division. Upon the death of a spouse, the surviving spouse usually has a right to claim an elective share of the deceased's estate, rather than an automatic half-share of all marital assets. Most U.S. states are common-law-property states.

• Example 1: Property Acquisition During Marriage

  Sarah, a software engineer, purchases a house in her name using her salary in a common-law-property state. Her husband, David, is a freelance artist and contributes to household expenses but is not listed on the property deed.

  This illustrates the term because, in a common-law-property state, the house is legally considered Sarah's individual property because her name is on the title and she earned the money for it. David does not automatically have a 50% ownership stake simply by virtue of being married to Sarah, although the property would be considered marital property subject to division in the event of a divorce.

• Example 2: Divorce and Property Division

  Mark and Lisa are divorcing after 15 years of marriage in a common-law-property state. Mark has a substantial retirement account from his long-term job, while Lisa has a smaller savings account. They also jointly own a family home.

  This demonstrates the common-law-property state concept through the application of equitable distribution. Instead of automatically splitting all assets 50/50, the court will consider various factors—such as each spouse's income, contributions to the marriage (both financial and non-financial), future earning potential, and the duration of the marriage—to determine a fair division of the retirement account, savings, and home. Lisa might receive more than 50% of the retirement account if the court deems it equitable, or Mark might retain more if Lisa has other significant assets or earning capacity.

• Example 3: Inheritance After Death

  John passes away in a common-law-property state, leaving a will that bequeaths all his assets to his children from a previous marriage, intentionally excluding his current wife, Emily.

  This example highlights the concept because, even though John's will excludes Emily, in a common-law-property state, Emily has the right to claim an "elective share" of John's estate. This means she can choose to receive a statutory percentage (e.g., one-third or one-half, depending on the state's specific law and the length of the marriage) of his estate, overriding the will's provisions to ensure she receives a minimum inheritance. She does not, however, automatically own half of all assets acquired during their marriage as she would in a community property state.