What is Property?
When you are married, you create what is legally known as a “marital estate.” The marital estate is everything you own (property or assets) and everything you owe (debt).
All that you own is basically divided into two types of property: real and personal. Real property includes things such as your home and the land that you own. Personal property is almost everything else. Personal property includes your furniture, knick-knacks, clothes, pictures, banking and financial/retirement accounts etc. Everything that you own, both real and personal property can be referred to as your marital estate.
When you are going through a divorce, the general rule is that everything within the marital estate (both assets and debts) is split evenly between the divorcing spouses. This is because the court will presume that both parties shared equally in the building of the marital estate. This rule usually applies to both assets and debts, with a few exceptions that are taken on a case by case basis. The following are some of the general rules that will be followed in dividing the marital estate:
Take the asset, you take the debt. For example, if you take the furniture that you still owe $500.00 on as your part of the estate, you are going to also be responsible for that debt.
What was yours stays yours. In the world of domestic relations law, there is the concept of separate property. Separate property is, generally, everything that you came into the marriage with and/or that was not purchased with marital assets. As a general rule, separate property stays with the party that brought it into the marriage and does not form any part of the marital estate. Some examples of separate property are: furniture you owned prior to the marriage but kept in the spare room, some gifts that you receive during the marriage for your birthday, and an inheritance you receive that you keep in a separate account and do not use to pay marital debt.
Unless you change it. Just because something started out as separate property does not mean that it stays that way. An individual can convert separate property into property of the marital estate in a number of ways. Two types of conversion are commingling and appreciation. An example of appreciation is typically found with houses. A house that is brought into the marriage is considered separate property. However, if the other spouse can show that he or she has expended marital assets to cause the house to appreciate in value or somehow contributed to the appreciation of the property by taking care of it over the 20 year marriage, then that appreciation attributed to the contribution or care is marital property. An example of commingling typically occurs when you inherit cash and put that cash into a joint bank account. If there is no way to separate the marital property from the separate property, it is all considered marital property.
Banking and financial accounts. Banking and financial accounts, including retirement accounts, that you keep in your separate name can become joint property once you begin contributing marital funds, or money earned during the marriage, into them. It doesn't matter who's name they are in, it just matters where the money came from!
Please contact Misty D. Becker for a consultation if you have further questions regarding your property distribution and its effect on you.