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Separate or Marital Property?


When considering property division during divorce, the first step is identifying the marital estate. A fundamental and often contested feature of property division is characterization of assets as either marital or separate property.

Marital property, as discussed in an earlier blog, is jointly held property like homes or vacation residences, investment and pension accounts and other items of value. If acquired during or through the marriage, it is likely marital property.

It is common for high net worth couples to have separate property in addition to their marital estate. Separate property includes:

  • Inheritance or gift: Property held before marriage, or acquired by behest or gift from someone other than a spouse can be considered separate property.
  • Monetary damages: Monies representing compensation for personal injury may be considered separate from the marital estate.
  • Exchange: Unless commingled, property acquired in exchange for separate property can continue as such.
  • Marital agreements: Property characterized as separate in a valid prenuptial or postnuptial agreement remains separate upon divorce.

If you can establish the existence of separate property, that property is not subject to equitable distribution and you most likely will retain the full value in a divorce.  When the value of separate property is substantial, as it is for many of our clients, the classification of these assets is all that more crucial.  If separate property is proven, it will not be distributed when an equitable distribution finding is made.  In representing clients and their families across New York City and throughout Westchester, Suffolk and Nassau counties, we focus on careful identification of separate and marital property.

Many times, property originally held separately is commingled, or partially commingled with marital assets, which can lead to transmutation of that asset or property into the marital estate. Separate or marital property?  It is essential to get experienced legal advice before you discuss property division with your spouse.