Everything You Need to Know about Non-Marital Property
What is Non-Marital Property?
In a divorce process, some assets remain non-marital and, thus, are not divided between the spouses.
What is the marital estate?
Marital properties are mutually divided by both parties in a divorce. The marital estate status means debts or assets that belong to the parties at the time of the divorce. Normally, each party proclaims their interest over martial debts or assets. This is true regardless of which spouse’s earning contributed for the asset mostly. Thus, any martial debts or assets can also include utility debts, chairs, 401K plans, real estate, credit card debts, frequent flier entitlements, stock plans, couches, bank account proceeds, stock options, cars, or any other forms of liabilities.
What are categories of non-marital assets?
Some states have classified a type of property as different from that is of marital estate. They are commonly known as non-marital assets. The possession of non-marital property depends on who owned it from before. Below are classifications of non-marital properties:
Premarital: If any property was acquired before marriage but the debt was paid off after the marriage, then it would only be considered partially non-marital.
Prenuptial Exclusions
Personal Injury Proceeds: For the injured, any kind of personal injury settlement will be counted as personal; therefore non-marital in nature. In some states various benefits are available in the form of Worker’s Compensation and Social Security benefits.
Inheritance: Assets or proceeds derived from inheritance.
Gifts: An asset in the form of a gift to one party, but both parties can’t avail it.
Losing Non-Marital Status
Often non-marital properties can be both marital and non-marital in nature. And, non-marital assets losing their current status are not uncommon. This might take place for different reasons like the ones below.
Commingling: Due to comingling of non-marital assets with marital assets, it may become difficult to maintain the non-marital status at all.
Marital Improvements: When marital money is spent to improve non-marital assets, it also alters the status. The increase in the value of the non-marital asset will be marital in nature.
Appreciation: Any kind of passive appreciation of non-marital assets remains non-marital in nature. Passive appreciation takes place when the value of any assets increases with any active role played by either party. Any increase in the value of a property without any measure is passive appreciation. On the other hand, any investment on the assets that also increases the value is active appreciation. This will definitely compromise the non-marital status.
Tracing Non-Marital Value
Assets that came up to add to the list later can be non-marital as well; the prerequisite is that the original non-marital interests a non-marital interest, also. For instance, when an asset owned by one of the spouses and later (during marriage) traded to get another of the same kind, there is room to detect non-marital interest in that new asset. Tracing effectively leads to claiming a non-marital interest in an asset acquired later.
Only clear-cut documentation can present a persuasive property case, in addition to an expert testimony