Who has the right to “Manage” marital property? PART II – Last week, we learned equal ownership of community property between spouses does not always mean each has equal management rights in that property. Believe it or not, one spouse could have sole authority to manage, control, and dispose of community property without the other spouse’s knowledge or consent.
You can find a link to that blog here (http://nelsonlawgrouppc.com/right-to-manage-marital-property/
I want to take this conversation a step further by dissecting management rights over separate property.
First, a recap: Separate Property is defined as property that has either been purchased and brought into a marriage by one spouse, or purchased during marriage using one spouse’s separate funds. With that said, it is not uncommon for spouses to be joint owners (cotenants) of separate property. An example is a pet purchased before marriage with both spouses’ separate funds.
Per the Texas Family Code, a spouse’s management rights over separate property depends on whether or not that spouse has sole or joint interest in the property.
Below is a brief breakdown:
Sole management rights over separate property – This is when a spouse has the exclusive right to manage, control, and dispose of separate property without the other spouse’s knowledge or consent. As mentioned a few paragraphs ago, easy examples of this include:
- Property purchased by one spouse before marriage.
- Property purchased by one spouse during marriage, but with separate funds.
- Property gifted to or inherited by one spouse before or during marriage.
- The recovery of monies for personal injuries incurred by one spouse during marriage that was not compensation for loss of earning capacity.
Cotenancy rights over separate property – This is when two people share an undivided present interest in the same property. Each spouse has a present right to enter, occupy, and possess the property. This leads to the term cotenant. Today, a cotenancy relationship can arise from two primary forms:
- Tenancy in common – Each tenant has equal right to possess and enjoy the property and holds undivided interest in the property as if each spouse were the sole owner. That is, they can act upon their interest in the property without consent from other cotenants. An example would be a property purchased during marriage with one spouse’s separate funds but titled in both names.
- Joint tenancy – Unlike tenancy in common, this includes a right of survivorship. This means if a cotenant dies, that person’s interest in property vests in the surviving cotenants.
A cotenant has the following powers over jointly owned separate property:
- The right to enter, occupy, and possess the property, but not to the exclusion of other cotenants.
- The right to encumber their interest in the property.
- The right to seek an accounting for any rents or profits received, waste committed, money fraudulently obtained, improvements made, and taxes paid, but not to the exclusion of other cotenants.
- The right to incur expenses for the preservation of the property and to seek reimbursement.
- The right to seek partition.
This was probably a lot of information to take in all at once. If there is something we have discussed or not covered that you need further explanation on, please contact our Nelson Law Group, PC office to let us know.