After reading this Wikipedia page, I feel I have a pretty good handle on how it works in the minority of states that do have community property. But so many exceptions are listed that surprise me: property one spouse has before the marriage is exempt, as is property received during the marriage via gift or inheritance. So what further separation of property is involved in all the other states?
Naturally, this will vary with individual state laws. But some generalities can be stated that are common across many jurisdictions.
Furst, a just, fair premarital agreement controls if one exists. The obvious issue here is whether the agreement was in fact just and fair, and lawyers will challenge its justness and/or fairness at the drop of a retainer.
Beyond that, property can be owned by an individual partner in the marriage or by the couple as a unit. If one spouse (usually but not always the wife) has effectively abandoned her/his career to be a stay-at-home caregiver of the children and homemaker, adequate means in real and liquid and illiquid personal property to provide for the spouse and children is generally due at separation and/or divorce from the career-pursuing spouse. Appropriate distribution of property owned by the couple is also done at this time. Generally these two areas are the subject of negotiations and mediation in the course of the divorce.
On the other hand, presuming the couple remained together until death did them part, we need to examine what happens to the property owned by the decedent or the couple. And this can get equally complex.
First, any property owned by an intestate childless spouse passes to his* surviving spouse. (* We will assume the decedent to be male for ease of pronoun usage, but “or she” should be understood in every case where “he” appears.)
If he dies survived by a spouse and one or more children, a certain share of the estate must pass to the surviving spouse, with the remainder passing as specified by will or given to the children in the case of intestacy. This can be overridden in a will by a showing of the surviving spouse’s awareness of and consent to the provisions and of adequate support for him/her outside the terms of the will. The traditional terms for this share-to-surviving-spouse are “dower” for a widow and “curtesy” [sic] for a widower. State inheritance laws I’ve encountered provided for life tenancy of the couple’s primary residence and/or one-third to one-half the estate as surviving spouse’s share.
Ptoperty owned by two or more people, including married couples, can be held in any of three forms of shared ownership (over and above ‘commercial’ forms of shared ownership such as a business partnership, shares in a corporation, memberships in a cooperative, etc.). These are tenancy by the entirety/-ies, joint tenancy, and tenancy in common. In tenancy by the entireties (both plural and singular are used, with plural IME the more common), any property held by the couple passes immediately to the surviving spouse on the death of the decedent without any action by will or probate. Typically the primary residence and often one or more bank accounts are hed by the couple as tenants by the entireties; depending on state law, much of their other mutually owned property can be. Typically tenancy by the entireties is limited to legally married couples (one of many arguments which have been advanced for legalizing same-sex marriage). A joint tenancy is just what it sounds like: a form of ownership in which title to real or personal property is held by two or more people acting together, neither (or none) of them having any right as an individual beyond the privilege of compelling dissolution of the joint tenancy in an equitable manner. Tenancy in common is ownership by undivided fractional interest.
Yo exemplify this, consider Pete, who dies survived by widow Rose and children Vera, Chuck, and Dave. Chuck is executor. The family home was owned by Pete and Rose as tenants by the entireties, and passes immediately to Rose, without any action on Chuck’s part, Chuck disposes of bequests of family heirlooms and other collectibles as Pete provided by will, and now is left to settle the estate. They agree to keep the profitable apartment building in the family; it was owned by Pete and Rose as tenants in common, and now becomes the property of Rose and her children, with her owning 50% and each child 16.7%. The large loan Pete made to his friend Ed, with Rose’s consent, is being used as part of the funding to build a mall which is expected to be highly profitable when completed. Since Pete and Rose made the loan as joint creditors, title to the loan vests in the joint tenancy of Pete’s estate and Rose; after due diligence Chuck decides that proper execution of the estate means holding the note until it is paid off in due course, with profit sharing from the mall accruing to the family members. Vera, wanting quick money, threatens to sue, but is dissuaded by her lawyer, who shows her that Chuck is taking proper care of estate moneys in leaving the loan to ride, and her demand to terminate the joint tenancy would not result in the best financial results to all family members. Pete’s personal liquid estate is distributed among his heirs as spelled out in his will, with Chuck making sure his mother gets at least what the law requires go to her.
Wow, you know your stuff! But none of that would apply in a community property state?