How Are Separate and Marital Property Different?

How Are Separate and Marital Property Different?

Divorce involves dividing the family’s property, and I’m sure you won’t be surprised if I tell you that this process can be extremely complicated and contentious –especially if there are significant assets to be considered, such as houses, rental property, retirement/pension plans, stock options, closely-held businesses, professional practices and licenses, etc.

Because it’s so complex and often emotional, many women find the division of assets quite overwhelming.

But, that doesn’t have to be the case.

Over the years, I have seen that the feeling of being overwhelmed typically stems from a lack of understanding about how assets are divided. Most women aren’t even familiar with the terms used–and why would you be, unless you’ve gone through this process before!

So, let’s start with the basics.  Let’s discuss one of the key factors divorcing women need to understand:

The difference between separate and marital property.


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States differ in some of the details, but typically, separate property is rather limited in scope. Generally speaking, separate property only includes:

• Property that was owned by either spouse prior to the marriage
• An inheritance received by the husband or wife (either before or after the marriage)
• A gift received by the husband or wife from a third party (your mother gave you her diamond ring)
• Payment received for the pain and suffering portion in a personal injury judgment
All other property that is acquired during the marriage is usually considered marital property, regardless of which spouse owns the property or how the property is titled.

As you can see, compared to separate property, marital property is a VERY broad category.
In other words, don’t think you’re not entitled to a specific asset (such as a 401K, stock options, etc.) simply because it is titled only in your husband’s name.  Typically, all property that is acquired during the marriage is considered marital property, even if your spouse “owns” the property or it is titled in his name.

In fact, even separate property can lose its separate property status if it is co-mingled with marital property. For instance, if you re-title the condo you bought when you were single and add your husband as a co-owner, that property will most likely now be considered marital property. Likewise, if you deposited the inheritance from your parents into a joint bank account, it’s likely that those funds would now be considered marital property.

qualified divorce team can help you sort through all the details of your particular case. As you can see, even a case that seems relatively simple at first can get quite complicated once you start scratching the surface. Keep in mind that understanding the difference between separate and marital property is only Step #1 in approaching the division of family property. You must also recognize that:

• Divorce laws differ greatly from state to state. Do you live in a Community Property state or an Equitable Distribution state? Where you live impacts how your assets and debts will be divided during divorce.
• In many states, if your separately owned property increases in value during the marriage, that increase in value may also be considered marital property. The division of this particular subset of marital property can be further complicated by the differentiation between active and passive appreciation of the assets.
• Debt is also handled in accordance with state laws, and Community Property states and Equitable Distribution states deal with debt quite differently.

But, wait. Take a deep breath. Please don’t let all this information fluster you. I know it can all seem a bit daunting initially –and that’s why I’ll walk you through each of these topics on my blog. Understanding the fundamentals of how assets are divided will help you feel less overwhelmed and help you start on your way to a successful settlement.

If you still have questions after reading these blog posts, please call one of our Divorce Financial Strategists™, who will be able to help you with your specific situation.

All articles/blog posts are for informational purposes only, and  do not constitute legal advice. If you require legal advice, retain a  lawyer licensed in your jurisdiction. The opinions expressed are solely  those of the author, who is not an attorney.

Jeffrey A. Landers, CDFA™ is a Divorce Financial Strategist™ and the founder of Bedrock Divorce Advisors, LLC, a firm which advises women throughout the United States before, during and after divorce on dividing marital assets and negotiating favorable settlements. He writes for, the Huffington Post and other publications. For further information go to or email Jeff at


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