Legal Definitions - common-law state

A common-law state is a state that has not adopted a community-property regime. This means that a spouse's interest in property held by the other spouse does not vest until a divorce action has been filed or the other spouse has died. In contrast, a community-property state recognizes that both spouses have equal ownership of all property acquired during the marriage.

For example, California is a community-property state, while New York is a common-law state. In California, if a couple divorces, all community property is divided equally between the spouses. In New York, however, the court will divide marital propertybased on what is fair and equitable, taking into account factors such as each spouse's income and contributions to the marriage.

Another example of a common-law state is Texas. In Texas, if one spouse owns a house before the marriage and continues to make mortgage payments during the marriage, the house remains that spouse's separate property. However, if the other spouse contributes to the mortgage payments or helps with repairs or improvements, they may be entitled to a portion of the house's value in a divorce.