Divorce courts divide property either as equitable distributions or as community property. Courts in equitable distribution states have the discretion to divide whatever property is owned by both spouses. The courts consider the length of the marriage, the age, health, conduct, occupations, skills, and employment and earnings potential of the respective spouses, and other requisite factors included in their state divorce statutes.
Equitable division doesn’t necessarily mean equal division. They equitably distribute property acquired during the marriage or marital property. Non-marital property includes gifts or inheritances to one spouse during marriage or property acquired before marriage. However, non-marital property isn’t necessarily safe from division. Equitable distribution states can divide pre- or post-marital assets.
Community property states divide community property equally. Separate property is property acquired by each spouse before marriage. Community property includes property acquired and used jointly or individually during the marriage. Separate property includes property one spouse owned before the marriage and retains sole title to after marriage, as well as property a spouse receives as a gift or inheritance before or during the marriage.
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Separate property is not divided in divorce. If you exchange separate property for another asset, the new property continues as separate property, as does the sale proceeds. If you commingle separate property with joint property, the separate property becomes divisible joint property.
Spousal obligations incurred before marriage also remain separate obligations. The parties may agree to separately pay marital debts but this does not bind creditors who can nevertheless sue either spouse.
To protect property in a community property state, each spouse should list their separate property upon marriage. The spouses would formally agree that these assets are to remain separate property thereafter. Gifts or inheritances received during a marriage should also be kept separate to keep these assets free from a spousal claim.