Marital Vs. Separate Property: What’s The Difference?

Understanding What Qualifies As Marital Property Under New York Law

Regardless of how much you earn, the default rule is that marital property is simply defined as any property or assets that are acquired after your marriage. For example, the day after you marry in New York, should you buy a house, even if only your name on the deed, that house is considered marital property. In general terms, any asset that is classified as marital property will typically be divided 50% to each spouse.

In contrast, separate property is defined as any asset that is not marital property. If an asset is defined as separate property, you will be entitled to 100% of that asset.

Although, assets purchased after the date of marriage are by default considered marital property, there are exceptions to this rule, which include: (i) gifts and inheritances and (ii) assets purchased from a personal injury award. For example, if you were given a gift of $50,000.00 and used that gift to purchase a car, that car would be your separate property. However, you have the burden of proof to demonstrate to the court that the asset was purchased with money you either inherited, was given to you as a gift or was from a personal injury award. Usually this is done by showing the court documentation. Once you can prove to the court, that the asset was bought with money obtained by a gift, inheritance or personal injury award, then the asset will be classified as your “separate property” and safe from division in a divorce.

Therefore, it is very important to keep records of any gifts, inheritances or personal injury awards to demonstrate that the asset you want is not incorrectly defined as “marital property” during your divorce.

David Badanes, Esq. is a skilled, trusted family law attorney serving New York. Since 2004, he’s helped clients just like you understand the differences between marital and separate property, helping them protect their assets, wealth, and enterprises with care.

Have questions, or in need of legal help? Reach out to the Badanes Law Office for an initial consultation today.

It is also important to note that an asset that could be classified as separate property can be converted to marital property based on what you do during the marriage. For example, if you own a home prior to marriage and then during the marriage you place your spouse’s name on the deed, you have now converted the home from separate property to marital property.

The Role Of Prenuptial Agreements In Defining Separate Property

Prenuptial agreements can be tailored in a variety of ways to define separate property. A prenuptial agreement can state that certain assets will either remain separate property or if purchased after the marriage will be classified as separate property. For example, it’s not uncommon for high-net-worth individuals to include clauses in prenuptial agreements that state any property a couple buys, so long as only one person’s name is on the deed or title, remains that party’s separate property.

Prenuptial agreements can also stipulate that any money in separate retirement accounts remains that party’s separate property, shielding the retirement account from division in a divorce. If you have retirement accounts, you should consider having a prenuptial agreement that protects that retirement account from division in a divorce.

A prenuptial agreement is a very flexible and very powerful tool in defining what remains separate property. It is important to make sure that the prenuptial agreement is properly drafted so that it clearly defines what is separate property.

When Separate Property Is Commingled With Marital Assets

Commingling separate property during your marriage can have devastating effects and truly cripple you in light of a divorce. For example, let’s say you have a relative who passes away and leaves you a significant amount of money. If you place this inheritance into a bank account jointly held with your spouse, your inheritance now becomes marital property, and you have just given your spouse half of that amount should you divorce.

David Badanes, Esq. is a skilled, trusted family law attorney serving New York. Since 2004, he’s helped clients just like you understand the differences between marital and separate property, helping them protect their assets, wealth, and enterprises with care.

Have questions, or in need of legal help? Reach out to the Badanes Law Office for an initial consultation today.

It’s best to always keep an inheritance in a separate account, in your name alone. The same can be said for land, a house, and any other asset acquired before marriage. Comingling or putting your spouse’s name on a title or deed now turns that asset into marital property.

The best way to protect such valuable assets is through tailored prenuptial agreements. In fact, high-net-worth individuals typically enter into prenuptial agreements at a far higher rate than the general public. It’s a simple, legally binding way to make a clear distinction between marital and separate property and ensure you are still well-established financially should a divorce occur.

Still Have Questions? Ready To Get Started?

For more information on Marital vs. separate property in New York divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (631) 430-4445 today.

David Badanes, Esq. is a skilled, trusted family law attorney serving New York. Since 2004, he’s helped clients just like you understand the differences between marital and separate property, helping them protect their assets, wealth, and enterprises with care.

Have questions, or in need of legal help? Reach out to the Badanes Law Office for an initial consultation today.