People preparing for divorce tend to have a lot of questions. Many of those questions relate to personal matters, and others have to do with technical aspects of divorce. Frequently, people are unsure about the property division process.
Some spouse may have already heard that most of their assets are subject to division under equitable distribution rules. Anything that is part of the marital estate is at risk of division in a divorce. Typically, any income earned during divorce and any property acquired with marital income is vulnerable during property division proceedings. Certain types of property has protection from division are usually classified as separate property that belongs to a single spouse.
Property owned before marriage
Typically, any resources people owned prior to marriage remain their separate property. The same is true of any assets or income acquired after formally separating from a spouse in the early stages of divorce. People usually don’t have to share the income they earned before marriage and the property that they acquired with that income.
Resources received as gifts
When people give either spouse a gift, even if they do so during the marriage, those resources usually belong to only that spouse. The same general rule applies to inherited property. Even if a family member of one spouse dies during the marriage, the inheritance that they receive typically remains their separate property.
Assets protected through an agreement
Engaged couples sometimes sign prenuptial agreements, and married couples might sign postnuptial agreements. Marital contracts can designate specific assets as separate property in the event of a future divorce. So long as the agreement is valid, the spouses can assume sole ownership over the assets they set aside as separate property.
There are some limits on the protections extended to separate property. If any commingling occurs, possibly by depositing inherited money into a shared bank account, then assets that could be separate might become marital. Assets can also be vulnerable when people use marital income to preserve or improve their separate property.
Understanding what resources are at risk of division can help spouses know what to expect in an upcoming divorce. Separate property can become an important nest egg for those planning for life after divorce.