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What Is Common Law Property?

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  • Written By: Felicia Dye
  • Edited By: Melissa Wiley
  • Last Modified Date: 20 November 2016
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Common law property refers to an ownership system that applies to married couples. Under the terms of this system, a married individual is the sole owner of assets that bear only her name. This is an important issue in the event of divorce or the death of one spouse. Being the sole owner of the majority of 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 is based on influence from old English law, and it allows individuals to retain sole ownership of assets that they acquire while they are married. A person loses her sole ownership rights if she allows her spouse's name to be listed on ownership documents for her possessions. Items that do not have an ownership document, such as furniture or sporting equipment, are usually considered the property of the individual who paid for them.

Community property differs in that possessions that are acquired during marriage are considered jointly owned. Some couples may live in jurisdictions where they have the option to choose the type of property ownership system that suits them. A person may lose the protection provided by common law property if she moves to a jurisdiction that regulates assets using a different system.

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The fact that a person lives in a common law property jurisdiction does not mean that she will necessarily walk away with everything that she owns if she gets divorced. There are normally fair distribution rules that dictate how property should be divided. If a person owns the majority of the assets or she is the higher wage earner, the court may order her to give a portion to her disadvantaged spouse. While the exact terms of division may vary, it is rare for the law to allow the financially advantaged spouse to leave her partner destitute.

Divorce is not the only occasion when common law property is an issue of importance. This ownership system also has an impact on what happens to property if one spouse dies. As a person's property belongs solely to him, he may leave portions of it to people other than his surviving spouse. This does not mean that the common law property system will allow a person to give away all of his assets. As is the case with divorce, a surviving spouse is generally entitled to some portion of her deceased partner's belongings.

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