When you file for a divorce, you and your former spouse must divide all marital assets and debts equally. While dividing marital assets is pretty straight forward, determining what constitutes a marital asset vs. separate property can become more complicated. Separate property are assets that you had prior to your marriage, or assets that you acquired during the marriage through an inheritance. You are allowed to keep your separate property, as long as it is clear the property remained separate during the marriage.
An Inheritance is a Good Example of Property that Begins as Separate Property
If you receive an inheritance as an individual heir during your marriage, this inheritance starts off as separate property. What you do with the money you inherited will determine how that money is divided should you file for divorce. For example, say you inherited $100,000. You took the whole $100,000 and put it into a joint checking account where both parties has access to the money. By putting the money into a joint checking account, you have made that money a marital asset.
If you take the same $100,000 and put it into a checking account with only your own name on it, you are making it clear that this the money is separate property. If you alone control the $100,000 during the length of your marriage, the entire inheritance is considered yours.
The inheritance can also be considered part separate and part marital property. This occurs when you take the $100,000 and you put it in your own bank account. You and your partner decide to purchase a house, and you take out $20,000 from that bank account as a down payment for a new house. $80,000 remains as separate property, while the $20,000 you put into the new home becomes marital property.
What you have in separate property is taken into consideration when you are dividing up marital assets. You aren't going to be able to keep a $100,000 inheritance and then split every single asset straight down the middle. If your ex spouse does not have separate property, this will be taken into consideration when your marital assets are being divided. The goal of any divorce settlement is an equitable share for both parties of all marital assets. Equitable does not necessarily mean equal, it means a fair division of assets.
If you are concerned about big assets that you believe are separate property and you are about to file for a divorce, consult a local attorney (such as one at McKissick & McKissick or another firm) to discuss your options.Share