What is Marital Property?
The legal term marital property refers to the property that is acquired by either or both parties during the course of a marriage. Property that is held by an individual part of a married couple is considered to be separate from marital property. Similarly, inheritance or any third party gifts made to the individual are not considered to be a part of marital property.
However, if a married couple acquires any property during the course of their marriage, e.g., real estate, ownership is arranged according to the prevailing marital property laws in the state of jurisdiction. Usually, the state is the one where the couple’s marriage is registered or where the couple resides.
Most of the details part of marital property law only apply in the case of a divorce or on the occasion of the death of either of the parties. Marriage partners can sign a prenuptial or a post-nuptial agreement, which would enable them to exclude certain properties that would otherwise be considered marital property.
- The legal term marital property refers to the property that is acquired by either or both parties during the course of a marriage
- Most of the details part of marital property law only apply in the case of a divorce or on the occasion of the death of either of the parties.
- In the US, there are two types of marital property laws that vary according to the state of residence. They are Common Law Property States and Community Property States.
What is Included in Marital Property?
Any property purchased by a couple during the course of their marriage is considered to be marital property. It may include their home, investment properties, vehicles, furniture, artwork, jewelry, or any other valuable asset. Financial assets, such as securities, retirement accounts, bank accounts, and pensions are also considered marital property.
It is not important if the purchase of such assets were made by the individual or if only one person contributed their income to financial assets, such as pension accounts. The spouse is also entitled to a share of the securities or any income (e.g., dividend income) accrued from the same.
The reason for the existence of marital property laws in the protection of spousal rights. The state in which the permanent legal residence of the couple is located determines the laws governing marital properties. It determines the division of property and assets in case of a divorce.
Matrimonial Assets vs. Non-Matrimonial Assets
Marital property, also known as matrimonial assets, is different from non-matrimonial assets. Non-matrimonial assets are those that are acquired by an individual either before the marriage or after the termination of the marriage. Inheritance and family businesses are also included in the non-matrimonial property.
Marital Property Law in the USA
In the US, there are two types of marital property laws that vary according to the state of residence. They are Common Law Property States and Community Property States.
1. Common Law Property States
The common law property system is the more prevalent legal framework in the US; it is followed by 41 states. Under the common law system, property that is acquired by an individual member of a married couple is the sole property of that individual. Only if the deed or title to a given property is in the names of both spouses will both parties own a legal right to the property. Thus, each spouse holds a half interest.
Under the framework, in the event of the death of one spouse, their individual property is distributed in accordance with their will. If there is no will in effect, it is distributed according to probate.
2. Community Property States
The community property legal framework is followed by nine states, namely, Idaho, Louisiana, Nevada, New Mexico, Arizona, California, Texas, Washington, and Wisconsin. Under such a framework, all property acquired during the course of the marriage is considered to be marital property. It includes all income earned, all property bought using that income, and all debt taken during the course of the marriage.
Marital Property in England and Wales
Marital property laws in England and Wales are laid out in the Law of Property Act 1925, and there is no separate regime for marital property. There is no principle of community property, which means that in the event of a divorce, the distribution of property falls under the discretion of the court.
However, the law draws a distinction between legal and beneficial ownership. The legal owner holds the title to the property and holds the right to administer the property as they please. However, if the spouse holds a beneficial interest in said assets, they may be entitled to it.
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