When you get divorced it is the court’s duty to equitably divide all marital property. A spouse’s separate property is generally not subject to division.
Any property obtained during the marriage is presumed to be marital. This means if something is obtained during the marriage it is presumed to be marital unless the party claiming it as separate can trace the funds back to a separate source, like an inheritance for example.
Local State Laws may vary on the precise division of Marital Vs Separate Property, but some examples of separate property may include:
- An inheritance by one spouse by bequest, devise, or descent during the course of the marriage;
- Any real or personal property or interest in real or personal property that was acquired by one spouse prior to the date of the marriage;
- Passive income and appreciation acquired from separate property by one spouse during the marriage;
- Any real or personal property or interest in real or personal property acquired by one spouse after a decree of legal separation;
- Any real or personal property or interest in real or personal property that is excluded by a valid antenuptial agreement;
- Compensation to a spouse for the spouse’s personal injury, except for loss of marital earnings and compensation for expenses paid from marital assets; or
- Any gift of any real or personal property or of an interest in real or personal property that is made after the date of the marriage and that is proven by clear and convincing evidence to have been given to only one spouse.
Just because an asset obtained during the marriage falls into one of these above-listed asset classes, does not mean that the property is automatically considered separate. The party seeking to exclude the property from division, must trace the funds back to a separate source and show that the property that may have at one time been separate has not been transmuted into marital property. The burden of proof rests on the party alleging separate property to prove that the property was initially separate, and remained separate throughout the marriage.
For example, a house may have been acquired before the marriage, but if a second mortgage is taken out on the home, or if marital income is expended on paying down the balance on the mortgage, some or all of that once separate house may now be marital.
It is all about proof. The spouse attempting to make a separate property claim will likely need to retain a forensic accountant to help trace the property. Generally, real estate appraisers are necessary as well.
Separate property, if truly separate, can be traced so long as good records have been kept and witnesses are willing to cooperate. However, without carefully tracing the funds, a good Divorce Attorney will be able to attack the chain of evidence and what should probably be separate property in theory, may not end up being separate property on a martial balance sheet.
If your case involves significant separate property issues, you should immediately seek the services of one of our experienced WSM Divorce Attorneys.