07 Mar Effectively Managing Marital Property – The Do’s and Don’ts
Marriage Property Do’s
Maintain accurate records to establish the separate nature of property you wish to keep independent from the marital estate. Examples may include family property, an estate from a previous marriage, a gift, or other inheritance.
Keep good records and be consistent that you separate all property in your marriage if you are concerned about keeping it in your family (if applicable). Do not mess with business ownership or family property during a marriage if you truly want to keep those items with your estate during death or divorce. Make the line clear and be consistent so there is no gray area. In other words, a vintage car that you pay for with money you had before marriage that was kept in a separate account after marriage, will be considered non marital property, but if your spouse pays for part of it or even helps maintain it, the vintage car could lose characterization as non marital property.
It is also important to note that, appreciation in nonmarital property may be relevant upon divorce or death of the property owner. The appreciated value is considered “active” rather than “passive.” Passive appreciation is, for instance, the increase in the value of a bank account as a result of interest earned, or the increase in property value that results from standard inflation. Active appreciation, on the other hand, occurs as a result of some form of actual effort, such as by repainting rental property or actively managing a stock portfolio.
Marital Property Don’ts
Be conscious to not use non marital funds to pay off a marital debt – these funds may lose their non marital character. Remember it is all about consistency!
Separate your bank accounts. Do not make deposits of income earned during the marriage into nonmarital accounts. Remember, income earned during the marriage is joint; mixing the nonmarital income with marital property results in confusion on whose money belongs where. Make it easy by paying for nonmarital items with nonmarital money. Do not open a joint bank account with nonmarital funds.
Do not assume that just because you owned property prior to marriage, no portion of it will be deemed marital property. You may have owned property before a marriage and your spouse makes an effort to maintain or improve it. This act shows commingling of assets and adds confusion to what is marital property and what is non marital property.
Contact Family Law Attorney Jeffrey M. Bloom
The Law Offices of Jeffrey M. Bloom can help you if you’re concerned about marital and non-marital property in your relationship. Mr. Bloom can work with you to set up a prenuptial agreement, advice on a pending divorce, and help you if you need actions post-divorce. Call 855-208-3650 for a consultation.