How Separate Property is Divided in Divorce: Some Common Questions
Separate property is not divided equally in divorce. In fact, it’s not divided at all. Marital property is defined as anything you earned or purchased during the marriage. Separate property, on the other hand, is property that either of you owned prior to your marriage, or anything that was given to you by gift or inheritance by anyone other than your husband.
Let’s run through some examples. The car you owned before you got married is still your car after your divorce. The car you bought together after your marriage is a marital asset, and subject to division. That’s the rule, even if the deed and the loan are in your name only. When something was earned or purchased during the marriage, it doesn’t matter how it’s titled—all that matters is that marital assets were used to purchase it, so it’s a marital asset. If, on the other hand, your grandfather died during your marriage, and left you a sum of money as an inheritance, that money is yours separately. If you used some of that money to buy a car during the marriage, the car is your separate property, because it can be traced back to the inheritance.
What if my parents gave a gift to both of us?
Sorry, but then it becomes a marital asset. It’s only separate if it was a gift given to just YOU.
What if it’s mixed up now, and I don’t know what money came from where?
This is a pretty common problem, and there are a couple of different answers. In addition to marital and separate property, there is also such a thing as hybrid property. A hybrid asset is one that is part marital and part separate. So, for example, if you had a 401(k) prior to your marriage with $100,000 in it, but you continued to make contributions throughout your marriage, you have a hybrid asset. Your original $100,000 is still separate (as is any increase that occurred as a result of that original amount), but whatever accumulated during your marriage is marital. It may sound complicated, but attorneys handle these kinds of divisions all the time.
If you had a separate asset and then you commingled it, it can also be a little complicated. Let’s say, as an example, that you received $100,000 from your grandfather as an inheritance. You took $30,000 of it and bought a new car, and then you put the other $70,000 in a joint account and, now that you’re getting divorced, you want your $70,000 back. If the money has already been spent, you’re out of luck. If it went to paying marital debts or it was just treated as spending money, you’ll have a difficult time convincing the judge to make your husband reimburse you. If, on the other hand, the money is still there, you’ll have to be able to trace it to the gift from your grandfather in order to prove that its your separate property. You’ll have a few hurdles to jump, but it’s possible.
What if HE has an inheritance or other valuable separate property?
I’m sorry, but if he can prove that it’s separate, there’s nothing you can do. Don’t get stuck trying to get a piece of an asset that, legally, you have no right to. It will frustrate your other attempts at reaching a settlement, and it will waste money because your attorneys will have to fight over it.
Separate property is not subject to equitable distribution. It just goes back to the person who owned it first, even if you had the benefit of its use during your marriage.