What Is Marital Property?
One of the most important issues to settle during divorce is the division of property. Pennsylvania is an equitable distribution state, which means the court divides marital property in a manner it considers fair, though not necessarily equally. But what does the law mean by “marital property”?
In any divorce, there are two kinds of property: marital property and separate property. Marital property belongs to the marital estate and is subject to distribution; separate property belongs to a spouse individually, so the court does not consider it. But what factors determine the category to which a particular asset or debt belongs? Here are a few rules.
Separate property is:
- Property a spouse owned before the marriage
- Property acquired during the marriage by gift from a third party
- Property acquired during the marriage through inheritance
- Property excluded by a valid marital agreement
- Property directly traceable to these sources
Marital property is:
- Property acquired during the marriage not subject to any of the exclusions above
- Separate property made a part of the marital estate either consciously or by commingling
- Property acquired after the date of separation
In the case of assets purchased with a combination of separate and marital property, the court can determine what percentage of an item, such as a car, is marital and what percentage is separate. The spouses can liquidate the asset and divide the cash, or one spouse can take the asset and compensate the other spouse with sufficient marital property to offset the loss.
The rules for property apply equally to assets and debts, so mortgages, car loans, and credit card balances run up during the marriage are marital property unless an exclusion applies. Even if both spouses don’t sign off on the debt, as in the case of a personal credit card in one spouse’s name, the amounts owed can be marital debt if the couple’s practice was to pay those monthly bills from marital assets.
The Law Offices of Jennifer Courtney & Associates, P.C. handles all aspects of property division during divorce. Call us at 215.493.3360 or contact our Yardley office online to schedule a consultation. We serve clients throughout Bucks County, including Newtown, Washington Crossing, and Richboro.