Legal Definitions - common-law state

A common-law state refers to a state that operates under a legal system where, during a marriage, property acquired by one spouse is generally considered to belong to that individual spouse, rather than being automatically co-owned by both spouses. In these states, a spouse does not automatically gain a vested, equal ownership interest in property acquired by the other spouse simply by virtue of the marriage itself.

Instead, a spouse's legal claim to an equitable share of the other spouse's property typically arises only upon specific triggering events, such as the filing of a divorce action or the death of the property-owning spouse. At these points, courts in common-law states usually have the authority to divide marital assets fairly, though not necessarily equally, based on various factors.

• Example 1: Property Division in Divorce

  Imagine Maria and David, who live in a common-law state like Virginia. During their marriage, David purchased a vacation home solely in his name using funds from his salary. Maria contributed significantly to their household expenses and managed their primary residence. If Maria and David decide to divorce, Maria would not have been considered an automatic co-owner of the vacation home during the marriage. However, upon the filing of the divorce, her interest in the property would "vest," meaning the court would then have the authority to consider the vacation home a marital asset and divide its value equitably between both Maria and David, taking into account their contributions to the marriage.

• Example 2: Inheritance Rights Upon Death

  Consider John and Sarah, married and residing in a common-law state such as Pennsylvania. Sarah inherited a substantial sum of money from her parents and invested it in a stock portfolio held exclusively in her name. If Sarah were to pass away without a will (intestate), John would have a legal right to a portion of her estate, including the stock portfolio, as determined by Pennsylvania's intestacy laws. His interest in that property would "vest" upon her death, allowing him to inherit according to state law, even though he did not have an automatic ownership stake in the portfolio during her lifetime.

• Example 3: Selling Property During Marriage

  Suppose Emily and Michael are married in a common-law state like New York. Emily purchased a classic car using her own earnings and titled it solely in her name. If Emily later decides to sell the car, she can generally do so without Michael's consent or signature. This is because, in a common-law state, Michael does not have an automatic, vested ownership interest in the car that would require his approval for the sale. His claim to an interest in the value of the car would only arise if they were to divorce or if Emily were to pass away.