Separate property? (Property Issues in Divorce part 3)

In a previous post I touched on separate property by stating that separate property is property that was acquired before marriage, by gift, devise or descent and some portions of personal injury settlements. Today I will discuss these categories in more detail.

First though, the importance of defining separate property – any property that is one spouse’s separate property CANNOT be awarded to the other spouse. I repeat it CANNOT be awarded to the other spouse. Therefore, it is crucial to speak with your attorney about any property that you believe is your separate property.

Now to discussing the different categories of separate property:

Before marriage – This is generally separate property, even if you both acquired it together, however, there are some exceptions.

Scenario 1 – you both purchased a piece of property together before marriage which shows you as joint tenants. In this case you each have a separate property interest in the property. Since you both have a separate property interest, the Judge cannot award the property solely to either spouse in the divorce proceeding because that would take separate property from the other spouse. In this case, the Judge can do what we call a partition of property by either dividing the property or by ordering it sold.

Scenario 2 – one spouse purchased the property before marriage solely in his/her name but both parties agreed that was their property that they were going to live in and pay equally on. In this case, while it appears that the property would be solely the one spouse’s property since it was purchased in his/her name only, the courts have found some exceptions and found that the property is both spouse’s separate property. Scenario 2 is very fact specific and may not apply in your situation.

Gifts, Devise or Descent – Any property acquired by gift, devise or descent is that person’s separate property.

Scenario 1 – one spouse is given a car. That car is that spouse’s separate property.

Scenario 2 – On your wedding day, after the ceremony, someone walks up to you both and hands both of you a keys to your new house. I know this is a pipe dream, but go with me on this for a moment. This property is not community property even though it was given to you after marriage because any property acquired by a gift is separate property. Instead, this property is now the separate property of both of you.

Scenario 3 – your spouse’s parent’s pass away and leave everything to your spouse. That property is your spouse’s separate property.

Personal Injury Settlements – If you or your spouse is involved in an accident and receive a settlement as a result, a portion of that settlement is separate property. The easiest way to work through this is to state that the portion of the settlement that reimburses anything you incurred as a result of the accident such as lost wages, medical bills, damage that had to be fixed is community property. The portion of the settlement that encompasses pain and suffering is separate property.

No matter the situation, ALL PROPERTY is presumed to be COMMUNITY PROPERTY unless you can prove to the court that the property is in fact separate property. Therefore, it is crucial for you to discuss your situation with your attorney to determine the best course of action in your case.