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What is Separate vs Marital Property in Divorce?

When going through a divorce in Georgia, there are many issues that need to be resolved before the divorce can be finalized by the court.  Apart from child support, custody, and alimony issues that need to be settled, there also has to be a division of property between the divorcing spouses.  In the state of Georgia, there has to be an equitable division, this means that the couple has to divide any marital property fairly or equitably – but not necessarily equally.

Marital and Separate Property
Marital property can be defined as any assets that or debts that a couple acquired during marriage or purchased with marital money, any money in a joint checking account is marital property.  There is some property that that can remain separate property of only one of the spouses, this includes any property owned by the spouses prior to the marriage, property acquired during marriage as a gift (this does not include gifts from the other spouse), or an inheritance.  Also, if any property is purchased with money that is not marital money or is exchanged for separate property, if any separate property produces earnings or if it increased in value, these are considered separate property as well.  It is also possible to convert separate property into marital property by changing the ownership from sole to joint while married.

There is also the possibility of commingling, which is when separate and marital property are mixed, for example, if one of the spouses has their own bank account but the other spouse deposits money into it, it then becomes marital property; it is possible to still argue that it is separate property but that might involve backtracking through some financial records.  Should there be a situation in which there is an asset that both of the spouses contributed and it increased in value; the way to determine how it will be divided is the source of funds rule.  The source of funds rule typically divides an asset or its value depending on the contributions made to it.  An example would be a home that the one of the spouses bought before being married; then later moved in with the other spouse and even later sold it for an increased value.  The court would look at how much was paid prior to the marriage and how much had been paid during the marriage, the amount paid by the spouse before marriage would be considered separate property while the remainder is considered marital property.

Figuring out how to Divide the Property
Once the property has been classified, it is time to divide it between the spouses.  One way of doing is to figure out the value of the property and selling it, the spouses would then divide the proceeds between them fairly. Another way is to assign items to each spouse.  It is also possible for the divorcing spouses to hold a property together, although this option will keep the spouses interacting due to continued monetary involvement.  Alongside property, any debts must also be divided; these include mortgages, credit card debts, or car loans.  It is also important to classify debt before division due to the possibility that debt can also be either marital or separate property.

Should the spouses be unable to fairly divide the property through an agreement (uncontested divorce agreement), it will be divided for them by a judge.  Since there is not set pattern on how to divide property, the judge will take many factors into consideration such as length of the marriage, well being of the spouses, type and value of the property, living arrangements of any children involved, standard of living during the marriage, the needs of the spouses, and the contributions of the spouses either to each other or the property.  There are also other circumstances that may influence property division.  For example, the shorter the marriage, the more likely it is that the court will attempt to put each of the spouses in the state closest to the one they were prior to marriage.  Likewise, in a longer marriage – the more likely the court will consider the majority of assets in dispute to be marital assets and not separate property.  If one of the spouses is concerned about their property, it should be addressed before the marriage; it can be made clear who will get one in the case of divorce with a prenuptial agreement.