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Marital Property: What It Is, How It’s Divided

Last updated 04/09/2024 by

Silas Bamigbola

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Marital property is a legal term that defines assets acquired during a marriage. Understanding the distinction between marital and separate property is essential, as it affects property rights in the event of divorce or death. This article delves into marital property, how it’s divided, and provides real-life examples to help you grasp the complexities of this concept.

What is marital property?

Marital property, a critical legal term in the United States, encompasses assets acquired during the course of a marriage. It plays a vital role in defining ownership, especially in scenarios like divorce or the passing of a spouse. Here, we explore the intricacies of marital property, its various aspects, and its real-world implications.

Understanding marital property

Marital property isn’t limited to just the family home; it includes a wide range of assets obtained during a marriage. This can encompass real estate, investments, vehicles, valuable items, and even financial accounts, such as bank balances and retirement funds. Importantly, even assets typically considered individual, like an Individual Retirement Account (IRA), can be deemed marital property if they receive contributions during the marriage.
One of the key purposes of defining marital property is to safeguard the rights of spouses. However, the laws governing marital property differ based on whether you reside in a common law property state or a community property state.
In common law property states, most of the United States follows the common law system, where property acquired by one spouse is considered their sole ownership. This means that if a property’s title or deed is solely in one spouse’s name, it belongs exclusively to them. If both spouses’ names are on the title, each owns an equal share.
This legal framework extends to what happens upon one spouse’s demise. For properties held under “joint tenancy with the right of survivorship” or “tenancy by the entirety,” the surviving spouse inherits the property, regardless of the deceased spouse’s will. However, in cases of “tenancy in common,” the property can go to someone other than the surviving spouse, following the deceased spouse’s will. Common law states typically allow the court to decide how marital property is divided during a separation or divorce.
On the other hand, community property states include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, and, with opt-in provisions, Alaska, Tennessee, South Dakota, and Puerto Rico. In these states, all assets acquired during a marriage are deemed community property, owned equally by both spouses. This encompasses earnings, property purchased with those earnings, and debts accumulated during the marriage.

Marital property in community property states

In community property states, all assets acquired during the marriage, whether earnings or possessions, are considered property of both spouses. This includes debts accrued during the marriage as well. While earnings and debts originating before the marriage are typically seen as separate property, couples in community property states may choose to commingle property, further complicating matters.
If one spouse passes away, the surviving spouse automatically assumes title to joint assets. However, community property ends when the couple physically separates with no intent to continue the marriage. After separation, earnings and debts are regarded as separate property, providing clarity in the event of divorce or a spouse’s demise.

Marital property and divorce

When a couple decides to divorce or legally separate and cannot agree on how to divide their marital property, a court steps in to make the decisions. In non-community property states, assets are divided based on the principle of “equitable distribution.” However, in community property states, there are exceptions to the equal division rule, such as cases involving the misappropriation of marital property.
It’s worth noting that couples can proactively manage their marital property by creating prenuptial agreements before marriage. These legal agreements outline how marital property should be distributed in case of divorce, ensuring that the process is well-defined and follows the couple’s intentions. Even in community property states, if a prenuptial agreement is valid and complies with federal and state laws, it will take precedence.
Weigh the risks and benefits
Here is a list of the benefits and drawbacks to consider.


  • Clarity in property ownership
  • Protection of spouse’s rights


  • Complexities in property division upon divorce
  • Potential for disputes and legal proceedings

Real-life examples of marital property

To better understand the concept of marital property, let’s explore some real-life scenarios:

Example 1: The family home

Imagine a couple, John and Sarah, who purchased their family home during their marriage. Regardless of whose name appears on the property title, the house is considered marital property. If they decide to divorce, the court will need to decide how to divide this significant asset.

Example 2: Investment portfolio

Let’s consider another scenario where a couple, David and Lisa, decided to invest in a diverse portfolio of stocks and bonds during their marriage. Although the investments are managed by David, they are still marital property, as they were acquired during the marriage. If they choose to divorce, these investments will need to be divided based on the applicable laws of their state.

Example 3: Joint bank accounts

In this scenario, Amy and Michael opened a joint bank account to manage their shared finances during their marriage. While the account is jointly owned, it’s crucial to recognize that this is also considered marital property. Should their marriage end, the funds in the joint account will be subject to division.

Marital property division process

In the process of divorce, understanding how marital property is divided is crucial. This process can be quite complex, and it’s important to know what to expect. Let’s delve into how the division of marital property typically unfolds:

Assessment of marital property

During divorce proceedings, the first step is to identify all marital property. This includes real estate, vehicles, financial accounts, investments, and any other assets acquired during the marriage. It’s essential to create a comprehensive list of these assets.

Valuation of assets

Once the assets are identified, they must be valued. This process determines the current worth of each asset, which is vital for equitable distribution. For example, the family home’s value may be appraised, and financial accounts will be evaluated.

Equitable distribution

The division of marital property is often guided by the principle of equitable distribution. This means that assets are divided fairly, but not necessarily equally. Several factors are considered, including the duration of the marriage, each spouse’s financial contributions, and the future needs of both parties.

Real-life example: Retirement accounts

Consider a couple, James and Emily, who have been married for 15 years. During this time, James contributed significantly to his 401(k) retirement account. In the event of divorce, the court will consider the length of the marriage and the fact that Emily supported James’s career, even if her income was lower. As a result, a portion of James’s 401(k) may be awarded to Emily as part of the equitable distribution.

Legal documents and marital property

Marital property rights can also be influenced by legal documents such as prenuptial agreements and wills. Let’s explore the impact of these documents:

Prenuptial agreements

A prenuptial agreement is a legally binding contract that outlines how marital property will be divided in the event of divorce. These agreements can provide clarity and protect the interests of both spouses. However, they must comply with federal and state laws to be enforceable.

Real-life example: Prenuptial agreements

Before their marriage, Samantha and Mark created a prenuptial agreement. In this document, they specified that any assets acquired during the marriage would remain the individual property of the spouse who obtained them. This included Mark’s real estate investments. In the event of divorce, the prenuptial agreement would guide the division of these assets.

Wills and marital property

Wills play a crucial role in determining how separate property is distributed upon the death of a spouse. If a spouse passes away, their will governs the distribution of assets that are considered separate property.

Real-life example: Wills and separate property

Imagine a situation where Linda, a widow, passes away. Her will clearly states that her personal savings account, which she owned before her marriage, should be inherited by her children. In this case, her savings account is considered separate property, and her will ensures that her children receive it as specified.

The role of legal professionals

Navigating the complexities of marital property, especially during divorce, often requires legal expertise. Legal professionals, such as divorce attorneys and financial advisors, play a crucial role in ensuring a fair and just division of assets.

Divorce attorneys

Divorce attorneys specialize in family law and can provide invaluable guidance during divorce proceedings. They help clients understand their rights and represent their interests in court, advocating for an equitable distribution of marital property.

Financial advisors

Financial advisors can assist in assessing the value of marital assets and their tax implications. They help individuals make informed decisions regarding asset division, ensuring that the outcome aligns with their financial goals.


Understanding marital property is vital for any married couple, as it defines how their assets are treated in the event of divorce or the passing of a spouse. The distinction between common law and community property states significantly impacts the rules governing marital property. Creating a prenuptial agreement can provide clarity and ensure that the distribution of marital property aligns with the couple’s intentions.
By comprehending the nuances of marital property and seeking legal advice when necessary, couples can navigate these complex waters with confidence, ensuring a fair and equitable outcome for all parties involved.

Frequently asked questions

What is the difference between marital property and separate property?

Marital property includes assets acquired during a marriage, while separate property consists of assets owned before the marriage or inherited individually. Distinguishing between them is crucial for property rights in various life events.

How do common law property states differ from community property states?

In common law property states, assets acquired by one spouse are considered their sole ownership, while community property states view assets acquired during marriage as jointly owned. Understanding this distinction is essential for married couples’ financial planning.

What happens to marital property in the event of a divorce?

When a marriage ends, and couples cannot agree on property division, a court steps in to make the decisions. The process varies between common law and community property states, with factors like equitable distribution playing a significant role.

How can legal documents like prenuptial agreements and wills affect marital property?

Prenuptial agreements outline how marital property should be divided in the event of divorce, ensuring the process aligns with the couple’s intentions. Wills play a crucial role in distributing separate property upon the death of a spouse, specifying who inherits what.

What role do legal professionals, such as divorce attorneys and financial advisors, play in managing marital property?

Legal professionals offer essential guidance during divorce proceedings, helping individuals understand their rights and advocate for fair property division. Financial advisors assist in valuing assets and making informed decisions about asset division.

Key takeaways

  • Marital property encompasses assets acquired during a marriage.
  • Distinctions between common law and community property states significantly impact property rights.
  • Understanding marital property is crucial for property division during divorce or after a spouse’s death.

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