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Determining “Separate Property” in a Divorce

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property division during divorce

If you’re getting divorced in Pennsylvania, you have likely heard the term “equitable distribution.” Pennsylvania divorce law follows the rules of equitable distribution, which is how assets are divided in a divorce, and where the courts divide marital property and debts as they see fair. However, with careful planning, divorcing spouses have the ability to omit certain property from the equitable distribution process. Those items are known as separate property.
which is how assets are divided in a divorce, and where the courts divide marital property and debts as they see fair.

What Does the Court Consider Separate Property?

Anything a couple purchases during the marriage is most likely “marital property” — homes, cars, furniture, businesses, jewelry, investments, retirement accounts, and much more. However, some divorcing couples have a few assets they can keep for themselves.

During a divorce, any of these items may be separate property:

  • Assets excluded by a prenuptial agreement
  • Property brought into the marriage and kept separate during the marriage
  • Gifts one spouse received during the marriage
  • Inheritances one spouse received before or during the marriage and kept separate

It’s important to note that the court may consider separate property to be marital property if its value increased during the marriage. In addition, if a spouse makes a common purchase using non-marital funds, that money might no longer be separate property.

Keeping Assets Separate with a Prenuptial Agreement

Before marriage, couples often make the decision to keep certain property separate in case they divorce in the future. A prenuptial agreement is a private contract that acts like an insurance policy for a couple’s assets. Simply put, the document identifies which property would be marital assets and which would be separate. A prenup can also limit each spouse’s debt liability, so creditors cannot go after all the marital property if one spouse accrues debt.

Couples who have a prenuptial agreement do not have to endure the grueling process of dividing every asset if they divorce. Instead, they figure out how they would prefer to divide their property. They may never need to use the document, but it’s smart to file one as a financial planning tool. There are other benefits of taking this step before marriage, which we cover in another post.

If you and your partner are looking ahead to marriage and want to file a prenuptial agreement, we can help. Our team can explain which assets to consider and the best language for a durable agreement. We can also answer any questions you have about dividing marital property in Pennsylvania. Contact Petrelli Previtera, LLC to schedule a consult.

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