Difference between separate property and marriage property

[isis297]

State: NY

It is my understanding property bought in one person's name during marriage is still marital property of both people. What about property bought prior to marriage?

 

[Zigner]

State: NY

It is my understanding property bought in one person's name during marriage is still marital property of both people. What about property bought prior to marriage?

It depends. We would need more facts about the property in questions and what has occurred after the marriage insofar as the property is concerned. Do you have a specific reason for asking?

 

[zddoodah]

It is my understanding property bought in one person's name during marriage is still marital property of both people.

That is generally true, and there would be a presumption to that effect, but there could be many exceptions. Also, there are relatively few types of property that are bought in a person's name (real estate, motor vehicles and financial accounts probably account for 95%+ of such property).

What about property bought prior to marriage?

Property acquired before a marriage is generally not regarded as marital property. However, there may be difficulty proving when a particular asset was acquired. Also, with respect to financial accounts, commingling may be an issue. Issues also arise when marital funds are used for the benefit of property acquired before the marriage (e.g., when marital money is used to pay the mortgage or make improvements to a pre-marriage home).

 

[LdiJ]

State: NY

It is my understanding property bought in one person's name during marriage is still marital property of both people. What about property bought prior to marriage?

It depends on whether or not marital funds are used to pay payments/maintenance/bills in connection with the property.

Example. John Doe has a rental property prior to marriage. He owned the property free and clear, and the income from the property covers all of the expenses of the property. That will be his separate property even after the marriage unless he puts his wife's name on the deed.

Example. John Doe buys a vacation house prior to marriage and has a mortgage on the property when he gets married. He uses his paycheck to pay the mortgage (his paycheck is martial property) and other marital funds to maintain the vacation house. Any equity in the home that accrues during the marriage is marital property.

Example. John Doe buys a house right before he gets married that is intended to be the marital home. He makes a minimal down payment and all payments, expenses and bills are paid for by the couple jointly. The house will be almost entirely marital property.

 

[adjusterjack]

State: NY

It is my understanding property bought in one person's name during marriage is still marital property of both people. What about property bought prior to marriage?

What's missing from the responses is an explanation of the difference between ownership and marital interest.

Whatever property you buy in your name before you get married, is yours, you own it.

However, during the marriage, the non-owner spouse is likely to accumulate a marital interest in the equity the builds up. In the event of divorce you may have to pay her that amount or offset it by making other arrangements. You still get to keep the property unless it has to be sold so that an equitable settlement can be reached.

 

[zddoodah]

What's missing from the responses is an explanation of the difference between ownership and marital interest.

Whatever property you buy in your name before you get married, is yours, you own it.

However, during the marriage, the non-owner spouse is likely to accumulate a marital interest in the equity the builds up. In the event of divorce you may have to pay her that amount or offset it by making other arrangements. You still get to keep the property unless it has to be sold so that an equitable settlement can be reached.

"A marital interest in the equity" doesn't happen automatically. Let's say that John owns real property before his marriage to Jane. The property is unencumbered by any mortgage and, during the marriage, John spends no marital money in connection with the property. However, during the marriage, the value of the property (and, hence, the equity) increases by $X. That $X in increased equity is not a marital asset or anything in which Jane has an interest. Of course, in at least some equitable division states, non-marital property may be in play -- either for purposes of property division or for purposes of determining what an equitable division of marital property is.

The message for the OP to take away from all this is that there are many moving parts in connection with the division of property in a divorce and in the planning process for folks who have significant pre-marriage assets.

 

[adjusterjack]

John spends on marital money in connection with the property.

Did you mean "no" marital money?

 

[zddoodah]

Did you mean "no" marital money?

Yes. Fixed.