Determining which property is considered marital property depends on many factors, including where you live. Most states are common law, or separate, property states. Nine states (Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington and Wisconsin) are community property states.
In common law and community property states, generally any property acquired by one spouse prior to the marriage is separate property. However, whether that property remains separate property during the marriage depends on how the property is used and managed. For example, if A owns a house prior to his marriage to B, but then uses the house as the family home, the house may be considered marital or community property – even if A kept the house titled in only his name.
The main difference between common law and community property states is how they treat property acquired during the marriage by only one spouse. In general, this property is considered separate property in common law states, unless the use or maintenance of the property leads it to be considered marital property. In community property states, any property acquired during the marriage, even if by only one spouse, typically is considered community property belonging equally to both spouses.
There are some types of property in common law states that are considered separate property when they are acquired during the marriage. This includes:
- Social Security benefits
- Settlement or damages from a personal injury lawsuit
However, property classifications can change and property that began as separate property can become marital property. For example, if A receives a condo as part of an inheritance and then spends time and money fixing up the condo, it may be considered a marital asset, even though A acquired it as part of an inheritance. If one spouse uses his or her labor or if marital money is used to manage or upkeep property, the property’s classification can change from separate property to marital property.
A well-drafted prenuptial agreement is the obvious way to protect property that you want to keep as separate, whether you live in a community or common law property state. In the absence of a prenup, it can be difficult to keep separate property your own once you are married. Some of the things that can become marital property include:
- Real estate (including second homes, rental properties, rents received during the marriage and the appreciation value of the property during the marriage)
- Bank accounts
- Investment accounts
- Family-owned businesses
- Property from a previous marriage
For more information on how your property ownership interests may change once you are married, contact an experienced attorney in your area. He or she can advise you on your state’s law and your options for protecting your property interests.
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