As discussed briefly above, there are two main categories of property in the equitable distribution context, marital property and separate property. Marital property is broadly defined under statute and includes “all real and personal property acquired by either spouse or both spouses during the course of the marriage and before the date of the separation of the parties, and presently owned, except property determined to be separate property or divisible property.” There is a presumption that property acquired during the marriage is marital property, but this presumption can be overcome.
Separate property includes property owned before the marriage and property inherited by only one of the parties and gifts received by only one of the parties from someone other than his or her spouse. Property acquired in exchange for separate property will remain separate property unless a contrary intention is expressly stated in the conveyance. This often occurs when separate property is used to purchase jointly held real estate, as even though the purchase was made with separate funds, the joint ownership converts the newly acquired property to marital property. Even though gifts received by only one of the parties is ordinarily classified as separate property, gifts from one spouse to the other spouse during the marriage are presumed to be gifts to the marital unit and become marital property. The increase in value of separate property during the marriage is normally also classified as separate property, but if the increase in value is the result of marital effort, then the increase is deemed to be marital property.
Divisible property includes passive changes in value of marital property that occurs between the date of separation and the date of distribution, as well as other property that was earned during the marriage but not paid or received until after the date of separation.
Marital and divisible property are divided during the equitable distribution process; however, separate property is not subject to division. For that reason, any separate property that you own needs to be properly identified so that you can retain it following your separation.