If your state is an “equitable distribution” or “marital property” state as opposed to a “community property” state. This means that the marital property is divided in an equitable manner. So if your name appears on a property title, you are considered its owner; however, your spouse will have a legal right to claim an equitable portion of that property when divorcing.
What is considered marital property?
While there are some exceptions for a separate property (below), marital property refers to anything of value acquired during the marriage, including (but not limited to):
- Real estate; personal property; vehicles; household items
- Bank accounts; investments; retirement accounts; debts, loans
What factors are considered when dividing property in divorce?
It’s important to note that the marital property approach recognizes that one party may be entitled to more or less than 50 percent of the total assets to be split.
When dividing marital property, the court considers factors like (but not limited to):
- The length of the marriage
- The standard of living established during the marriage
- The value of household management, including childcare
- The income level of the parties, as well as their future earning potential
- The age and health of the parties
That said, the higher-income spouse could receive a bigger piece of the pie by claiming they made greater financial contributions, but at the same time, the lower-income or no-income spouse can make equitable claims by virtue of their personal contribution during the marriage (for example, running the household, caring for the kids, assisting the spouse with their work).
What is considered separate property?
Separate property is considered a spouse’s separate property and not divided when divorcing. It is property:
- Acquired by gift or inheritance
- Acquired after legal separation
- In exchange for separate property
- Excluded by valid agreement of the parties
How is the value of marital property determined?
The court divides marital property based on its value when the official divorce judgment or decree is issued, not the value at the time of separation. This is done by default unless you mutually decide otherwise through an agreement.
How do I get around marital property division rules?
The overall purpose is to ensure both parties are treated fairly with respect to their investments in the marriage and their subsequent needs. That said, couples can divide assets in a manner they deem fair and have this agreement approved by the court, thereby avoiding the court process of dividing assets.
Also, limits and exceptions can be established by valid prenuptial and marital agreements – but valid usually means they need to be prepared by an attorney or a mediator.
FAQs
What is marital property?
Marital property includes assets and debts acquired during the marriage, regardless of whose name is on the title or account.
What is considered separate property?
Separate property typically includes assets owned before marriage, inheritances, and gifts specifically given to one spouse, unless commingled with marital property.
Does marital property include debts?
Yes. Debts incurred during the marriage are generally considered marital obligations and are subject to division in divorce.
How is marital property divided in divorce?
Division depends on state law. Some states use community property rules, dividing equally, while others use equitable distribution, dividing fairly but not necessarily equally.
What happens if separate and marital property are mixed?
If separate property is commingled with marital funds or used for marital purposes, it may lose its separate status and be treated as marital property.
Can spouses agree on what is marital property?
Yes. Spouses can negotiate and define property division in a settlement, which the court may approve if it is fair.
How to Identify Marital Property in Divorce
List all assets and debts
Include bank accounts, real estate, vehicles, retirement accounts, credit cards, and loans.
Determine when each was acquired
Classify whether assets and debts were obtained before, during, or after the marriage.
Check for exceptions
Identify inheritances, gifts, or premarital property that may qualify as separate property.
Evaluate for commingling
Review whether separate property was mixed with marital property, which may change its classification.
Apply state law
Use your state’s community property or equitable distribution rules to determine division.
Consult professionals
Work with attorneys or financial experts to ensure property is classified and divided correctly.
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