Generally speaking, “marital property” is everything (assets and debt) that accumulated during the marriage from the joint efforts of each party, acting in their respective roles. By contract, “separate property” can include assets accumulated prior to the marriage, assets inherited or gifted, or separate assets that increased by way of passive appreciation during the marriage.
During a divorce, and prior to the division of any assets or debts, both parties have an opportunity to conduct discovery. Discovery is a process whereby the parties are required to disclose their interests in all assets and debts, whether “marital” or “separate.” Discovery is critical in cases where one spouse may have little knowledge of the marital estate. During the discovery process, the parties also ascertain the value of the separate or marital assets. In some cases, this involves an appraisal of the marital home or other property. In other cases, complex evaluations are necessary to determine the value of a party's closely held business. How an asset is valued in a divorce makes a significant difference in the settlement results. If an asset is over or under valued, one spouse may get a significantly better or worse deal.
Now here is where separate and marital property gets complicated…
- Separate assets can become marital property by the active efforts of either spouse during the marriage. In such cases, parties can argue that the separate property was “commingled” with marital property, thereby changing its character to marital property.
- Sometimes, the growth of a separate asset may be considered marital property, but the initial value of the asset may remain separate property. In such cases, parties can argue that they are able to “trace” their separate contribution, and that there is evidence to conclude that they considered the funds their own separate property.
To further complicate the issues, there are limited circumstances in which the Courts can “invade” separate property and award some portion of separate property to a spouse when the marital estate is not sufficient. Arguments regarding separate and marital property can significantly impact the overall divorce settlement. Generally, the Courts attempt to fairly divide all marital property during a divorce, taking into consideration several factors, such as:
- The length of the marriage
- The needs and circumstances of the parties
- The contributions of the parties to the marital estate
- The age of the parties
- The health of the parties
- The life status of the parties (for example: education level, children)
- The earning ability of the parties
- The past conduct of the parties (for example: fault for the breakdown of the marriage and domestic violence)
- The general principles of equity (i.e. fairness)
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The family law attorneys at McGinnis Chiappelli, P.C. are knowledgeable about the case laws and statutes impacting property division. We carefully analyze the property and debt issues in each case to help our clients achieve fair financial settlements. We would encourage you to contact us to discuss your specific divorce case. The INITIAL CONSULTATION IS FREE. We offer flexible appointment times, along with reasonable fees.