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22 Aug 16

Are assets split during a separation considered separate property?

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Most people get married when they already own some property, savings, and investments. After marriage, the law classifies them as separate properties. During marriage, you will most likely acquire more money and property. In many states, the property acquired during marriage is categorized as marital property or marital estate. Some people agree to exclude some of their property from marital estate by signing a prenuptial or postnuptial agreement. In the absence of such a document, it is presumed that all properties that are acquired during marriage are marital property.

 

Marital property can also include:

  • Personal property including furniture, cars, airplanes, boats, and any artwork that you and your spouse bought when you were married.
  • Bank accounts, cash, retirement accounts, and securities that you obtained during marriage.
  • Real property that both of you purchased during marriage. However, this is not inclusive of any contributions by either of you from separate property, for example, paying part or the full down payment using separate property funds.
  • Advanced professional degrees and all permits that you acquired to engage in a specialized business during marriage.

 

Separate property includes:

 

In case you or your spouse have filed for divorce or a legal separation, you can both agree on the division of separate and marital property. However, if you cannot agree, you will have to face trial in a court of law, and the court will decide on which property should be categorized as either separate or marital property. The court also takes over the decision process of deciding what would be equitable and fair to both of you. However, it is not always equal depending on the circumstances.

 

The Division Process Followed by the Court

In many states, courts follow a four-step process that determines how property is divided among different individuals.

 

The Date of Separation

Courts in different states determine the date of separation as the date when both spouses agree to terminate their marriage. In other states, this is the date when a spouse leaves the marital home. The date of separation is a very important date since it marks the end of property being categorized as marital property. Unfortunately, this date is often open to debate. The court will require you to have some evidence of a final breakdown, for example, the date when you or your spouse left the matrimonial home.

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