Key Takeaways:
- In the event of a divorce between two spouses, property owned or inherited by one spouse before the marriage generally remains the property of that spouse.
- Separate property may become marital property (subject to division between spouses) through the transmutation or commingling of separate and marital funds.
- There are several ways to protect your property, such as through pre- and postnuptial agreements or by keeping your and your spouse’s property separate.
- State law can significantly impact how property is classified and divided between spouses during a divorce.
A marriage represents a union between two individuals, each of whom has had their own life prior to getting married. Many people bring property from their pre-marriage lives into their marriage.
Generally speaking, what happens to property owned before marriage in the course of a divorce is that the property is considered separate property that’s not subject to division. However, this isn’t always the result.
In this article, we discuss the complexities of property division in the context of divorce. We explore what happens to property owned before marriage, how marital assets are classified and what steps you can take to protect your separate property in the event of a divorce.
Divorce property division overview
One of the primary issues in divorce proceedings is the division of property belonging to the parties.
Not all property is subject to division between spouses in a divorce. Whether specific property must be divided typically depends on whether it is considered marital or separate.
What assets can be split in a divorce: marital property
Marital property is typically subject to division in a divorce and generally includes any assets or liabilities acquired by either spouse during the marriage. Examples of marital property that may be split in a divorce frequently include:
- Real estate
- Vehicles
- Bank accounts
- Retirement accounts
- Investments
- Business interests
- Personal property items
- Debts and other liabilities
Pro tip: If either spouse didn’t acquire a property during the marriage, it may not be considered marital property subject to division in the event of a divorce.
What assets cannot be split in a divorce: separate property
While marital property is usually subject to division between spouses, separate property usually isn’t.
Separate property typically includes property belonging to or acquired by a particular spouse prior to the marriage (premarital property) or, in some cases, acquired after the date of separation. Other examples of separate property may include:
- Inheritances or gifts acquired by one spouse, even if during the marriage
- Property addressed in a valid prenuptial or postnuptial agreement that the spouses agree will be considered separate property
- Professional degrees or licenses belonging to one spouse
Pro tip: Keep careful records of any property you believe should be considered separate property. Also, avoiding mixing your separate property funds with your spouse’s or shared marital funds may help prevent your separate property from becoming marital property.
Jurisdictional considerations
Jurisdictional considerations significantly determine how your property may be classified and divided during a divorce. For example, some states follow principles of equitable distribution, whereas others follow community property principles.
In states that follow equitable distribution principles, courts typically divide property between the spouses in an “equitable” manner, meaning that property is divided fairly but not necessarily equally. In community property states, courts typically take any property determined to be marital property and divide it equally between the two spouses.
When separate property may become marital property
While separate property most often remains with the respective owner, some exceptions exist. Below are two situations where separate property may become marital property subject to division between the parties in a divorce.
Commingling of funds
In the context of property division in divorce proceedings, commingling of funds occurs where separate property belonging to one spouse is later mixed or combined with marital property. As a result, this may make it challenging to trace the funds, which, in turn, may affect the parties’ ability to keep the funds truly separate.
Where there has been a commingling of funds, separate property may become marital property and, therefore, be subject to division in the event of a divorce.
Pro tip: To prevent commingling of funds, consider setting aside any inheritances, pre-marriage bank accounts or other separate property funds in a separate account, even after getting married.
Transmutation
Transmutation is another way in which separate property may become marital property. Courts typically look to the existence of intent of the parties to transform separate property into marital property. Examples might include:
- Adding a spouse’s name to the title on real estate that was previously owned solely by the other spouse before the marriage
- Using one spouse’s inheritance to fund a purchase that will be used jointly by both spouses
Pro tip: Commingling of funds may be considered a type of transmutation.
How to prove separate property in divorce
Proving separate property in a divorce involves providing evidence to demonstrate that the property is indeed separate and not marital property subject to division between the parties.
While the specifics may vary depending on jurisdiction and individual circumstances, here are some common methods for proving separate property:
- Clear documentation—such as deeds, purchase agreements and bank statements—that establishes ownership of certain property prior to the marriage.
- Tracing or tracking property through various transactions back to determine its origin and how it was acquired.
- Witness testimony from individuals, such as family members, friends, or financial advisors, who have knowledge of the property’s ownership history and may be able to attest to its separate nature.
Ways to protect your premarital property
How your property is classified (separate property or marital property) can significantly impact what happens to property owned before marriage in the event of a divorce. Ultimately, the judge presiding over your case may decide the classification of your property.
However, there are several ways to try to maintain your premarital property’s separate status and prevent it from being considered marital property should a divorce arise. Below are some options to consider before getting married:
- Engage in open and transparent discussions with your partner regarding your individual finances and financial goals.
- Identify, document and keep a record of any property or assets that belong to you.
- Enter into a prenuptial agreement with your partner that clearly identifies any separate property and outlines how to handle premarital assets in the event of a divorce.
- Consider obtaining valuations or appraisals of your premarital property to help establish the value of your separate assets before the marriage.
Even after getting married, there are steps you may take to protect your premarital property’s separate status:
- Enter into a postnuptial agreement that identifies the separate property of the parties and addresses how to handle it in a divorce.
- Maintain separate accounts, keeping premarital assets separate from marital assets to help preserve their separate status.
- Keep thorough records and documentation of any premarital assets and financial statements that may help identify and establish your separate property during a divorce.
How a lawyer may help
Understandably, many people don’t think about divorce as they start their marriage. But as much as you may not want to think anything could go wrong, it may benefit you to consider the potential of a divorce. After all, if this happens, protecting your assets and interests will be paramount.
An experienced family law attorney can help you:
- Identify any separate property that may belong to you should your marriage end in the future
- Prepare a prenuptial or postnuptial agreement to address the division of property in the event of a divorce
- Create and implement strategies to protect and preserve your property interests
- Advocate for your property rights in the event you have a divorce
Wherever you’re at in your marriage or divorce process, discussing your legal rights and options with an attorney may bring you peace of mind or help you proceed with your case.
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