Community Property States in 2022 – Forbes Advisor
Spouses need to understand the difference between marital property and non-marital (separate) property. Marital (community) property is the assets and debts acquired during the marriage. With a few exceptions described below, if acquired during marriage, it is common property.
Separate property acquired before marriage
Most separate or non-marital property consists of assets or debts that a spouse had at the time of marriage. If a spouse owns it before marriage, it remains a separate asset or liability in most situations.
For example, a couple is getting married on June 5, 2020. Prior to the wedding, Spouse A acquired $25,000 in student loans when he graduated in May 2018. This is non-marital property (debt ) because Spouse B was not in the photo. when Spouse A took out the student loans. If the couple divorces, Spouse A will still have to repay the loans; Spouse B is not responsible for the debt at all.
Separate property acquired during the marriage
Non-marital property also includes property that a spouse receives by gift, inheritance or bodily injury during the marriage. If a spouse inherits a boat from their grandparent, for example, and the title is retained in that spouse’s name, it is separate property.
Separate property that becomes matrimonial property
In some cases, separate property can become matrimonial property. For example, if Spouse A enters the marriage with $50,000 and places it in a joint checking account or uses it as a down payment on a house purchased during the marriage by both spouses, these funds become marital funds.
Also, if a separate asset increases in value partly because of contributions from the other spouse (monetarily or through work), that increase in value of the separate asset becomes a marital asset. For example, if Spouse A owned a rental property before the marriage and during the marriage the marital funds are used to pay the mortgage or maintenance or if Spouse B helps work on the property, l increase in value after the date of the marriage will be of a matrimonial patrimony.
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