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What is separate property in a divorce?

| Oct 7, 2020 | Divorce |

When a couple decides to divorce, calculating how to divide property and finances can be one of the most difficult tasks. Spouses only have to divide marital property, which includes anything they earned or purchased during the marriage using their joint finances.

But not all property is subject to equitable distribution.

What assets are separate property?

Any property or assets that individuals own separately from their spouse is exempt from the property division process. According to Kentucky law, assets that remain separate from the marital property include:

  • Anything individuals owned before the marriage and kept separate during the marriage
  • Gifts or inheritances given to individuals, in their name alone
  • Property specifically excepted from property division in a prenuptial agreement
  • Property that spouses acquired after legal separation

It is important to note that separate property also includes debts. For example, many people accrue student loan debt before they get married. As long as their spouse does not contribute money to help pay those debts, they remain separate property as well.

However, beware of commingled assets

No one enters a marriage with the intention to divorce. Additionally, the idea of “what’s mine is yours,” in marriage leads many people to combine their assets without much thought of what is separate property or marital property.

This is understandable. However, it is important to point out that combining assets – often referred to as commingling assets – can make it more of a challenge to:

  1. Prove an asset is separate property
  2. Divide property equitably, when ownership is unclear

The commingling of assets is often an issue that spouses face when they pursue a divorce, but it is usually possible to trace assets and determine whether they are separate or marital property.

It is critical for individuals moving forward with divorce to be aware of how their property could be classified, so they can keep their assets and finances secure throughout the end of their marriage and for their future.

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