Asset division can get tricky during a divorce, and you can easily get a raw deal if you aren't careful. You need to know what is your individual property and what is marital property before the assets are divided. Here are four questions to help you with the distinction:
What Does Your Marital Agreement Say?
Marital agreements are contracts that you sign with your spouse shortly before or after tying the knot; prenuptial agreements are signed before marriage, and post-nuptial agreements are signed after marriage. You can use these agreements for a variety of things including that of property ownership. As long as your agreement is legally valid, and it addressed the issue of property ownership, you will be able to use it to decide who owns each of your assets.
When Did You Acquire the Properties?
Generally, the property you had before your marriage is your separate property while those you acquired during marriage belongs to the marital property category. This means the car that your father gave you while in college (if you weren't married then) will be your separate property. However, the boat you bought with your yearly bonus (during your marriage) belongs to both of you.
How Did You Acquire the Property?
Some forms of property acquisition are designated as separate property. Inheritance and gifts, for example, are usually handled as separate property. However, the property you buy with your salary, even if your spouse doesn't contribute a single cent to the purchase, is marital property. Therefore, if you inherit a vacation house from your grandparents, it will be your separate property whether you inherited it before or during your marriage.
Whose Name Is on the Property and How Was It Used?
You may also be able to buy a property, register it in your name and keep it as your separate property even if you do all these during your marriage. For this to happen, the money you use to buy the property must be your separate money, and you must never use the purchased property for the benefit of your spouse. Consider an example where you inherit property from your parents, sell the property and use the proceeds to start a business. If you keep the business (and its debts and liabilities) separate from your marital assets, you will be able to claim it as your separate property if you divorce.
The above discussions represent the general idea of what constitutes marital property. However, there may be small variations according to your state laws. Therefore, consult a divorce lawyer like those at Bergermann Law Firm to help you understand your state's true position on this issue.