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Dear Monty: Marital property law vs. Common law: A financial factor in real estate

Richard Montgomery More Content Now
Posted: Jul. 30, 2019 8:40 am

Reader question: My name is not on the deed of our home. My spouse put the house up for sale after 22 years. Am I entitled to half the profits of the deal?

Monty's answer: Ten states embrace marital property law. During a marriage in these states, all assets and debts acquired are "community property." Information here is lacking to provide a quality answer, and there are many variables to consider. Issues such as the location of the home, your marital status when the house was purchased, the existence of a prenuptial agreement and a host of other issues will affect the answer.

Seek legal advice

Depending upon the circumstances, if you live in a marital property state, you may be entitled to share in the proceeds. If you do not have an attorney, this link suggests a practical method for finding a competent attorney. The article mentions a real estate attorney, but the methodology is identical for a divorce attorney. Many divorcing people believe that each person should have an attorney.

The marital property states

Alaska, Arizona, California, Idaho, Louisiana,  Nevada, New Mexico, Texas, Washington and Wisconsin are marital property states. In Alaska, a couple must choose the common-law property route by signing a marital property agreement either before or during their marriage. In the other nine states, there is no document necessary. 

Common law vs. Separate property law

Marital property states decree both spouses share assets and debts created during the marriage equally (50/50). Assets acquired before the wedding that is owned by either party is separate property. The non-marital states take a different approach, which can vary widely from state to state. Their laws state any earnings or debts originating during a marriage will be separate property. Even if there is no marital property law, you may be entitled to some of the proceeds depending on the circumstances.

According to LegalMatch.com, which contains essential information on this subject, the parties generally cannot choose a location to file for divorce. Some may attempt this tactic to yield a more favorable distribution. They are usually limited to presenting their case in the jurisdiction where they live. 

Another option

If you cannot afford an attorney, another source to consider is a meditation center. Here is a link to the National Association For Community Mediation. Ask your spouse if they are willing to mediate the issue. A divorce court will require mediation in many states. If the two of you can work together to reach a fair agreement, this option may be faster and at considerable cost savings.

Invest the time

No one knows the future. If you take the time now, one is far less likely to feel mistreated if the relationship comes to an end. If you are interested in the history of how these laws came to be, here is a link to a PDF file that offers an interesting explanation.

Richard Montgomery is the author of "House Money - An Insider’s Secrets to Saving Thousands When You Buy or Sell a Home." He is a real estate industry veteran who advocates industry reform and offers readers unbiased real estate advice. Find him at DearMonty.com.

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