Common law property allows married individuals to retain sole ownership of property in their name. Community property, on the other hand, considers assets acquired during marriage to be jointly owned. Equitable distribution rules apply in the event of divorce or death, ensuring the financially disadvantaged spouse receives a portion of the assets.
Common law property refers to a property system that applies to married couples. Under the terms of this system, a married individual is the sole owner of property bearing only her name. This is an important issue in the event of a divorce or death of a spouse. Being the sole owner of most assets, however, does not generally entitle one spouse to leave the other destitute.
There are two common types of marital property systems: community property and common law property. The common law system builds on the influence of old English law and allows individuals to retain sole ownership of property they acquire while married. A person loses his sole ownership rights if he allows his spouse’s name to be listed in the title deeds of his assets. Items that don’t have proof of ownership, such as furniture or sports equipment, are generally considered to be the property of the person who paid for them.
Community ownership differs in that assets acquired during the marriage are considered to be jointly owned. Some couples may live in jurisdictions where they have the ability to choose the type of property ownership system that suits them best. A person may lose the protection provided by common law property if he moves to a jurisdiction that regulates property using a different system.
Just because a person lives in a common law property jurisdiction does not mean that they will necessarily walk away with everything they own in the event of a divorce. There are normally equitable distribution rules that dictate how the property should be divided. If a person owns the majority of the assets or is the highest wage earner, the court may order him or her to give a portion to the disadvantaged spouse. While the exact terms of the division may vary, the law rarely allows the financially advantaged spouse to leave the destitute partner.
Divorce isn’t the only occasion where common law property is a major issue. This property system also has an impact on what happens to property if a spouse dies. Since a person’s property belongs exclusively to him, he may leave parts of it to people other than his surviving spouse. This does not mean that the common law property system will allow a person to dispose of all of her assets. As in the case of divorce, the surviving spouse is generally entitled to a portion of the deceased partner’s assets.
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