Living Trusts Glossary

Separate property is everything that the husband and wife own separately. In a community property state, this includes property received by gift or inheritance, as well as property acquired before the marriage.

In a common law separate property state (which is every state except for Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin), the spouse whose name is on the title document, whether a deed or account registration, owns that property. If there is no such document, the spouse who paid for the property owns it. Money earned by one spouse remains the separate property of that spouse. However, if both spouses put their names on the title document, they own the property jointly.

Nevertheless, in the event of a divorce, a court in a separate property state will distribute all of the property acquired by both spouses in a manner deemed to be "equitable" or fair in each case.