1. Historically, how did married couples own and manage property?
you read in the text on pages 34-41, historically, upon marriage a woman
entered the condition of “coverture” in which her legal identity
was merged with that of her husband. He
acquired exclusive ownership of all personal property she owned or acquired
before or during the marriage. In
Women’s Property Acts, enacted by the states beginning in the mid
What are the two primary systems of property ownership
during marriage in the
state laws governing property ownership and marriage generally fall into two
groups: community property states and common law property states. Community property systems are found in those
states whose early legal development was influenced by the civil law systems of
the rest of the states (usually referred to as “common law”
states), the law that governs ownership of property during the marriage is not
the same (indeed, can be dramatically different) than the law that governs
ownership at divorce or at death. Since
Let’s take an example. Mary and Harry are married. Mary is a homemaker with no income. Harry works as a manager of a business. Let’s say that Harry controls all the family’s finances. He deposits his paychecks into a checking account in his name only and gives Mary a cash allowance. The family house and car are both in his name only, as are retirement funds and investment accounts. What does Harry own? Everything. What does Mary own? Only that which she has purchased with the cash Harry has given her. You will see that that is not how the statutes governing divorce would characterize the ownership of the property, but during the marriage, Harry owns his own income and everything that income acquires unless he intends (or the law presumes he intends) to share.
let’s suppose Harry deposits his paychecks into a joint checking account
and that the house and car purchases are in both names. Now a court would deem the money in the
checking account (and anything purchased with those funds) along with any
jointly titled property as belonging to both spouses. Just how do they share their ownership of
that property? Again, it depends in part
on how the language used to create those ownership interests. You will recall
from your basic property class that the basic co-tenancies are joint tenancy
and tenancies in common (if you need to review the basics of tenancies, that you might
find useful to refresh your knowledge).
Nearly half the states, including
3. What is the effect of holding property as a tenancy by the entirety?
Because tenancy by the entireties is a special form of
co-tenancy reserved for married couples only, we will spend some time looking
in more detail at this form of co-ownership by spouses. The spouses holding property as tenants by
the entireties, hold the property as an undivided entity. Theoretically, they don’t each own 50%.
Rather the marriage owns 100% of the property.
4. How does one create a tenancy by the entireties
For bank deposits, a similar presumption applies. Funds deposited to an account held by a husband and wife are presumed to be held by entireties, regardless of which party contributes funds and even if each party can individually draw on the account. The presumption of ownership by the entirety of bank accounts in names of husband and wife is rebuttable, but evidence to overcome the presumption must be so strong, clear, positive, unequivocal and definite.
Finally, any property that is purchased with entireties funds or funds that are traceable to entireties property retains the entireties ownership. So if we go back to Harry and Mary, we discover that, unless they have clearly indicated otherwise, their jointly titled house, car and bank accounts are held in tenancy by the entirety, as is any property either has purchased with funds from the bank accounts.
5. Once property becomes entireties property, how can one change tenancy by the entireties property into individually-titled property?
Divorce, severs property and any resulting co-ownership is as tenants in common. Death also changes a tenancy by the entirety (the surviving spouse continues to hold title to the full estate.). Finally, spouses can change property from tenancy by the entireties into separate ownership or into other forms of co-tenancy by “consent, agreement or acquiescence." So if Mary takes money out of the joint bank account and buys stock in her own name, that stock would be Mary’s alone if Harry had consented, agreed or acquiesced in that purchase with the understanding that the stock would be her individual property.
6. Who controls entireties property?
PLEASE REMEMBER – These doctrines govern the ownership and management of property DURING AN INTACT MARRIAGE. Who “owns” property for purposes of distribution at divorce or inheritance at death may be quite different.