Dividing assets is a crucial and, sometimes, time-consuming aspect in divorce. There is not an easy way to do this, especially with high-asset divorce cases. In such scenarios, courts must untangle complicated assets to determine who gets what.
And, often, what comes to the forefront is determining marital property and non-marital property. But what is the difference between the two? Marital property refers to property acquired during the time of a couple’s marriage. Property, though, owned by a person before a marriage takes place is non-marital property.
Inheritances, third-party gifts considered non-marital
During a divorce, marital property is divided equally between the separating spouses. Non-marital or separate property is kept by each individual person. For example, if a couple buys a home together, that is marital property. In some situations, couples will exclude specific assets from marital property through prenuptial or postnuptial agreements.
However, if, prior to your marriage, you purchased an investment property or valuable pieces of art or collectibles, those are non-marital property. Inheritances, too, fall into the category of non-marital property as do third-party gifts bestowed upon a person during the marriage. A crucial thing to remember: Non-marital property loses that status if commingled with marital property or vice versa. This would happen if you placed your inheritance in a joint financial account with your spouse.
Property purchased together: marital
A typical list of marital property – that includes real estate and other assets a couple purchased together while married – may include:
- The family home
- Investment property whether commercial or residential
- Motor vehicles, furniture and artwork
- Bank accounts, securities, pensions, retirement accounts such as IRAs and 401(k)s
Remember, any asset accumulated during the marriage is marital property and subject to equal division. And, if you worry about the valuable collectibles that you purchased before the marriage, they remain yours as they are non-marital property.