Married Couple, who owns what?

If you leave everything to your spouse, as many people do, you don't need to worry about what belongs to you and what belongs to your spouse. But if you want to divide your property among several beneficiaries, you need to know just what's yours to leave.

Common-Law States

Most states, except the ones listed below, use the "common law" system of property ownership. In these states, it's usually easy to tell who owns what. If only your name is on the deed, registration document or other title paper, it's yours. You are free to leave your property to whomever you choose, subject to your spouse's right to claim a certain share after your death.

If you and your spouse both have your name on the title, you each own a half-interest. Your freedom to give away or leave that half-interest depends on how you and your spouse share ownership. If you own the property in "joint tenancy with right of survivorship" or "tenancy by the entirety," it automatically goes to the surviving spouse when one spouse dies -- no matter what the deceased spouse's will says. If you instead own the property in "tenancy in common" (less likely), then you can leave your half to someone other than your spouse if you wish.

If an item doesn't have a title document, generally the person who paid for it, or received it as a gift, owns it.

Community Property States

If you live in or have previously lived in a community property state, the rules are more complicated. Community property states are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. In Alaska, spouses can sign an agreement making certain assets community property.

Community property is a method for defining the ownership of property acquired during marriage. Generally, in community property states, all earnings during marriage and all property acquired with those earnings are considered community property, owned equally by husband and wife. Likewise, all debts incurred during marriage are debts of the couple. At the death of one spouse, his half of the community property goes to the surviving spouse unless he left a will that directs otherwise. Separate property may be left to whomever the owner wishes.

Married couples don't have to accept the rules about what is community property and what isn't. They can sign a written agreement that makes some or all community property the separate property of one spouse, or vice versa.

These rules apply to matter whose name is on the title document to a particular piece of property. For example, a married woman in a community property state may own a car in only her name -- but legally, her husband may own a half-interest. Here are some other examples:

Several community property states offer a specific way of holding title to community property that avoids probate at the death of the first spouse. It's called "community property with right of survivorship." If a couple holds title to property -- a house, for example -- that way, when one spouse dies the house will automatically belong to the survivor, without any probate court proceedings.