Separate Property Divorce

Divorce Papers > Property Divorce > Separate Property Divorce

A divorce is a marital dissolution that is carried out by a court procedure. There are several aspects of this procedure including a change in social status and financial condition. Property distribution is one of such important issues related to a divorce. Generally, the marital belongings, that is, assets owned by both partners is regarded for the division during a dissolution procedure. In Separate property divorce, some belongings owned by an individual, are excluded from this distribution. However, in some cases, individual assets play a vital role in a divorce.

Separate Property is also called as "Immune" as it is kept out of the distribution. These are the assets that is owned by a single partner before marriage. In a majority of states in the US,it is not directly connected with division. But, the amount will have an influence on the equitable distribution. Prenuptial agreements play a role in establishing separate assets. These agreements decide its role in the divorce. In the absence of such per-marital contracts, it is divided on the basis of following types.

Dual Classification states in Separate Property Divorce

Some of the states in the US follow Dual Classification method. Here, the total assets of spouses are divided into marital and separate types. The separate holdings are not distributed but allotted to a single partner who owns it. Only marital earnings will be distributed, either equally or equitably.

Kitchen Sink states in Separate Property Divorce

In these states, separate property is regarded as a section of the marital estate. Consequently,it is also considered for distribution during a divorce. The kitchen sink states are those states that allow the individual assets and liabilities to be a part of division. Following are the states that follow this procedure. Accordingly, inheritances and gifts between spouses can be taken into account during division.

Apart from these states, some states follow the principle of jurisdictional discretion for the distribution of separate property. That is, if required, these states may apply the kitchen sink principle while dividing the assets. These states are as below.

Blending of Separate Property with Marital Assets in a Divorce

The principle of mixing individual earnings into marital assets comprises of following points:

• The assets owned by a person prior to his/her marriage is termed as 'separate property'. The court may consider the value of this while dividing the joint assets.
• However, it continues to be separate only if it is retained apart from marital earnings. In other words, the person should retain this value on his/her name only.
• Some individuals combine separate holdings with marital assets. In such cases, it becomes a section of marital property. Some examples of such occurrences is described below.

Example 1

A man has a bank account and had 1 million USD balance in it prior to the marriage. After the man marries, he and his wife consistently deposit their paychecks in this account. They also make withdrawals from this account for their daily expenses. After 10 years, they apply for a divorce. When they separate, this account has 0.7 million USD balance.

The court reasons that paychecks (marital property) have been deposited in this account and marital debts have been repaid from it. Hence, presently it is not possible to distinguish the original separate assets from this marital belongings. The court concludes that the past separate property has been converted to marital type. This is now eligible for distribution.

Example 2

An individual sells his separate assets. The money obtained from this sale is used to purchase an object that supports marital life. There is considerable probability that this new object would be considered by the court as marital earnings. While considering this object as a marital assets, the value added by this asset is a matter of consideration.

Example 3

A person owns a residence prior to marriage. After this person marries, this residence is used as the marital residence. This house might probably be regarded as marital assets.

Such is the nature of kitchen sink distribution. Sometimes, this kind of division becomes a disputing issue between partners. Therefore, it is necessary to understand the role of separate property in divorce. Though it is out of calculation in equitable distribution, it will be a major factor of consideration for a fair division.

Divorce Papers