Marital property – otherwise called community property – includes the assets that get divided during a divorce.
Of course, when going into a divorce, understanding what assets fall under which categories can help save time and stress.
Separate property
As The Business Professor states, different categories of property exist. The two main categories when it comes to divorce include separate and community properties.
Separate properties exist outside of the scope of the marriage and belong to a sole individual, as opposed to the couple. This includes things like gifts given directly to the person, their assets from before the marriage, and any inheritance they received.
However, some separate property may become community property depending on its handling. For example, depositing money from an inheritance into a joint bank account transfers that asset into a community property.
Community property
As for community properties, this often includes things like houses and land plots. Generally, anything signed under both of a couple’s names like deeds or bank accounts will fall under this category. It also typically includes big purchases that both spouses contributed to, such as televisions or other expensive electronics.
Understanding where property falls and how it classifies is important during the marriage itself, because the way that a person categorizes their assets could impact the division of assets in divorce later. This is where prenuptial agreements come in handy.
As many people do not do this, however, they often have to handle the division of assets and discover what asset falls where during the divorce itself.
