Figuring out solutions for property division is a major obstacle during many divorces. Spouses have a hard time agreeing about what is fair and appropriate. The more valuable their assets are, the more likely they are to end up disagreeing on specific property division terms. In some cases, couples may not even agree about what property is subject to division. The state’s equitable distribution law applies to all marital property. However, spouses can exclude non-marital property from the asset division process.
What resources are non-marital property for the purposes of property division negotiation or litigation?
Assets protected through marital agreements
Some people negotiate prenuptial agreements before they ever get married. They recognize that they have property worth protecting and establish clear terms that declare those assets as non-marital property in the event of a divorce. Others may sign postnuptial agreements during a marriage if they acquire property or achieve business success as a way of protecting specific resources. Assets designated as non-marital in a written agreement are often not subject to division in a divorce.
Resources acquired prior to marriage or after separation
The timing of asset acquisition influences whether or not people have to divide those resources. Many times, the assets people acquire before getting married are not subject to division when they divorce. Any increase in value or income generated from those separate assets may also remain non-marital property for the purpose of divorce. If spouses formally separate, income earned and assets acquired after that separation are usually also non-marital property.
Assets acquired as an inheritance or gifts
People can receive property during their marriage that they do not have to divide with the spouse. If they receive gifts from their parents or an inheritance from their favorite uncle, those assets are usually non-marital property for the purposes of asset distribution. The spouse chosen as the beneficiary or recipient can preserve their sole ownership of those resources in most cases. Sometimes, financial mistakes may lead to claims of commingling and could make certain assets vulnerable during divorce proceedings.
Understanding what is marital property and what is non-marital property can help people prepare for an upcoming divorce. The more people know about the process, the easier it may be for them to prepare for negotiations or court.
