Legal Blog

The Weekly Scenario: Marital vs. Separate Property

As the saying goes, why is divorce so expensive?  Because it’s worth it.  Probably a poor lead-in, but I wanted to write this week on Marital vs Separate property.

Marital vs. Separate Property

The first step in dividing up assets in divorce is deciding who owns what.  You and your spouse each entered into the marriage with assets, whether they are savings accounts, real estate, or investments.  This is your separate property.

When you get married, your time, labor, earnings, and assets are combined into a marital pot of sorts.  From that point on, anything you earn, buy, or work on to increase in value becomes marital property.

Why are these considered marital property?  Why does your husband get a ‘credit’ because you have a degree?   Because in getting a medical degree, you spent an extensive amount of time while married studying and attending classes.  Your earning potential increased in value.  Because of your increase in value in exchange for marital time, labor and money, your spouse is compensated.

Your wife bought you (insert an expensive watch brand) for $10,000.  Unless this money came from a savings account that existed before the marriage, your wife used marital money to pay for it and the value will be split at the time of divorce.

So while many things acquired during the marriage is marital property.  What isn’t marital property?

Separate property generally includes:

  • Any property owned prior to marriage
  • Any property obtained in exchange for your separate property
  • Any third party gifts or inherited assets directed to you alone
  • Any separate property value increases (that aren’t a result of your or your spouse’s efforts during marriage)
  • Any property excluded from the marital estate by marital arrangements (prenup or postnup agreements)

So the savings account you had when you entered the marriage is still separate property until you either add any earnings you made during the marriage to it (marital money) or add any of your spouse’s money to it (marital money).  You could add an inheritance or gift to it, but only if it was directed toward you alone and wasn’t from your spouse.

Anytime there is a dispute over who owns what, the court will decide what is separate and marital property by reviewing documents and testimony at trial.

Until next week!


As always, if you have any questions or would like to learn more, please contact Steve Shane at or 301.575.0313.



Steve Shane Casual | 301.575.0313

Steve Shane provides strategic counseling to clients in need of estate administration, charitable giving and business continuity planning while minimizing estate, gift, and generation-skipping transfer tax exposure. He offers legal guidance to clients on asset protection and the proper disposition of assets in accordance with the client’s objectives, while employing tax planning techniques such as the use of irrevocable trusts, life insurance planning, lifetime gifts, and a charitable trust. He is also experienced with drafting documents for business planning, the incorporation, and application for exemption for Private Foundations and the administration of decedents’ estates.






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