Marital Versus Separate Property

Marital Property During Divorce

If you are facing a divorce, chances are property division may be one of the big discussions that you and your former spouse will be reviewing. Often, many couples do not understand that certain properties & assets may be considered marital regardless of who earned the income in the marriage and in whose name the property is titled. Sometimes, certain assets may be considered a separate asset, which is not divisible in a divorce. So what’s the difference?

Simply stated, any property that was acquired prior to the marriage and had no marital funds contributed to it during the length of the marriage could be considered marital or separate property. Additionally, anything acquired during the marriage that was given as a gift, or an inheritance that was held separately and not jointly, could also be considered separate property. So here is an example:

I had a gentleman call me several years ago who was extremely frustrated with his soon to be ex-wife. Shortly before their divorce proceedings started, she had received a very large inheritance due to the death of her father. His ex-wife was the sole recipient of these funds. Additionally, she opened up a separate bank account in her name only and deposit those funds into that account. This gentleman expressed his frustration that they have been married for 25 years and that this inheritance should also be his! However, his soon-to-be-ex and opposing counsel attorneys were contesting that it was separate property. “Joe, what’s your opinion?” he said. I told him that the inheritance which was solely given to his ex-wife was indeed and unfortunately separate property.

Conversely, marital property generally will be any property or assets acquired during the length of the marriage. What makes some divorces really complex is when separate property could also include marital property values. When could this happen? The most common situation we typically see in our office is regarding 401(k) accounts and pension accounts.

Typically this will occur when one spouse had the retirement account prior to the marriage and funded it with marital assets during the length of the marriage. Pension values work differently, but generally will be considered to have marital values if the spouse continued active employment during the length of the marriage. Calculations, such as the coverture fraction, are used to determine what percentage of that asset is marital versus separate.

Give us a call if you are confused as to what might be marital or separate property or need calculations ran to determine these amounts in your case. We will be happy to help you out.

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