Legal Definitions - equal-management rule

The equal-management rule is a legal principle, primarily applied in community property states, which establishes that each spouse has an equal and independent right to manage and control assets acquired during their marriage (known as community property). This means that either spouse can typically make decisions, buy, sell, or otherwise deal with community property on their own, without needing the other spouse's explicit consent for every action. However, this rule has exceptions; specific laws or agreements may require both spouses to act together for certain transactions, such as selling real estate.

• Example 1: Managing Joint Bank Accounts

  Consider a couple, Emily and Mark, who live in a community property state. They have a joint savings account where they deposit their earnings. Under the equal-management rule, Emily can decide to transfer a portion of these funds to pay for their child's college tuition without needing Mark's explicit permission for that specific transfer. Likewise, Mark can use funds from the same account to invest in a new certificate of deposit (CD) in both their names. This demonstrates that both spouses possess the authority to independently manage their shared financial resources.

• Example 2: Decisions Regarding Community Property Vehicles

  Imagine Sarah and David, who own a car purchased during their marriage, which is considered community property. David notices the car needs new tires and takes it to a repair shop, authorizing the purchase and installation of new tires using a community credit card. The equal-management rule allows David to make this decision regarding the maintenance and upkeep of a community asset without needing Sarah's specific approval for this particular repair, as it falls within the scope of managing their shared property.