Division of Marital Property

Another issue to decide is how marital property is to be divided. First, let me explain the definition of marital property. Martial property is any property obtained with marital funds or through marital efforts during the course of the marriage. This includes pension benefits, 401(k) plan benefits, profit sharing accounts, savings accounts, investments derived from income earned during the marriage, equity in the marital domicile. All income earned during the marriage is marital property.

Gifts are nonmarital property, if they are held in the individual's name and not commingled with marital accounts. Inheritances are also non marital property, as long as they are not commingled with marital funds. Property obtain prior to the marriage is non marital property as well, again, as long as title is not transferred to both parties and the property is not commingled with marital property.

The non marital property described above can easily be converted to marital property, by titling the property to both spouses jointly, or by commingling funds with marital funds.

Marital property is subject to an equitable distribution between the parties. Equitable does not mean equal, although you generally see the Court start at a 50/50 division. From there, they will take into consideration a number of factors, such as the earning ability of the parties, any physical disability one party may suffer preventing them from earning a reasonable living on their own, and the non marital assets the party may own.

It is very common for one spouse to own a house prior to the marriage, then deed that house into joint tenancy after the marriage. That house is considered a gift to the marriage, and is considered marital property. If the original spouse can prove that they never intended to make the house a gift to the marriage, and actually had some other reason for transferring the house into joint tenancy, the marital status of that property can be defeated. However, that is not frequently successful. The concept of reimbursement has gained momentum in the last decade. That is, the spouse who does not own the marital domicile, but has contributed to making the mortgage payments, the real estate tax payments, the maintenance and upkeep of the house, etc. is entitled to some reimbursement for their efforts. That use to be considered a gift to the nonmarital estate of the party. However, the Courts are trending away from that point of view and toward reimbursement. Also, reimbursement comes into play when one party had significant equity in the house before transferring into joint tenancy. The original owner of the house may be entitled to reimbursement for the equity gained in the house value prior to the marriage, with the marital portion being divided equitably between the parties.

While non marital property is not dividable between the parties, in that it stays the property of the spouse who originally owned it, it is, however, taken into account in dividing marital property. If one spouse has substantial non marital assets, such as benefits from a trust fund that they are beneficiary of, and the other spouse has nothing non marital, it is not unusual to see a much greater proportion of the marital property be awarded to the spouse without the non marital assets. I have seen that go as high as 70% of the marital property awarded to the spouse with no non marital assets, when there were very substantial non marital assets in the other spouse.