What assets are non-marital when couples divorce?

Property division is often the biggest hurdle faced by those preparing for divorce. State law requires an equitable distribution of the marital estate. After creating a list of all marital assets and financial obligations, spouses can work out a way to fairly divide their finances. They can also go to court and ask a family law judge to apply the state’s equitable distribution statute to their unique circumstances.

The longer people have remained married, the greater the percentage of their resources that are marital assets. Still, there are some assets that may remain the separate property of one spouse. What can people claim as their separate or non-marital property when they prepare for divorce?

Inherited property and gifts

Many people acquire ownership of valuable assets from other people. Their parents, friends or other loved ones could offer them money, art or even vehicles as gifts. Other times, they inherit real property, financial resources and other assets from a loved one’s estate. Items received as a gift or as part of an inheritance are typically not part of a marital estate.

Assets protected by agreement

Couples sometimes negotiate prenuptial or post-nuptial agreements. They set clear terms regarding their expectations should they eventually divorce. In many cases, prenuptial or postnuptial agreements include terms earmarking certain assets as separate or non-marital property. One spouse may want to preserve a retirement account, a vacation home or a professional practice as their separate property so they don’t have to share it if they divorce.

Resources accrued before marriage

Spouses may have enjoyed professional success or may have already inherited valuable property before getting married. Typically, resources accumulated before marriage or acquired after legal separation are non-marital assets that are not subject to division in the event of a divorce.

Property division rules are complex and open to interpretation. Those preparing for divorce often need support when establishing what assets are subject to division and what they can protect as non-marital property. Spouses may need to review their financial records carefully to determine what property could be subject to division and what assets they could claim as non-marital property. Understanding the rules that apply during divorce proceedings can help people obtain the best possible outcome.