Whose property is it anyway?

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When couples divorce, in addition to determining issues of child custody and child support (if there are minor children of the marriage), I also must be determined who owns what in terms of property. This article will be a brief outline of the basic property definitions and guidelines to assist couples in dividing their property. (It is not an all-inclusive dissertation of all laws governing property rights.)

Before we get into details about property, you should know that family law, as with many other areas of law, is full of general rules as well as exceptions to those rules. These exceptions also have exceptions. This article will provide some definitions as well as some general rules and exceptions as to the division of property. For the exceptions to the exception (no, I am not kidding, there are exceptions to exceptions), you should consult with and provide all the facts of your particular situation to an experienced family law attorney to see if any exceptions apply. Cases are fact driven, so that the outcome of your cousin’s neighbor’s friends case will be very different from the outcome of yours; no two cases are factually the same.

First, the term “real property” includes real estate such as houses, land, condominiums and buildings. “Personal property” is all property that is not “real property” such as furniture, appliances, tools, vehicles, boats, and the not so obvious items such as businesses, bank accounts, investment and retirement accounts, livestock, and pets. (I have seen cases where parties tried to divide property themselves and they forgot a range of property including the home, the retirement accounts, and in one case even a business.)

Second, in divorce actions property is characterized by the court as either separate property or community property. In general, any property that is acquired during the marriage is characterized as “community property,” and in a divorce, is up for equitable division. Property that is owned by either individual prior to the marriage, inherited or gifted during the marriage, is that individual’s “separate property” and (here’s that word again…) generally stays that individual’s separate property and is not divided between the parties in a divorce.

Third, generally the character of an item of property stays the same, either community or separate, but not always, there could be an exception. So, here’s another term you need to know, “transmutation.” Transmutation is an exception to the general rule and occurs when separate property is transmuted into community property through some act of the parties (an exception to the exception). This is important because if property is transmuted from separate to community, that property is now up for equitable division in a divorce.

Fourth, an individual could have a separate legal interest in community property. For example, if a spouse uses her funds the she earned prior to the marriage for a down payment for the house she and her now husband purchase during their marriage, the amount of the down payment could remain her separate funds and could be reimbursed to her under certain conditions.

Sounds simple? Not really. It is important for individuals to have a general understanding of community versus separate property, transmutation and separate legal interest so that they can share the pertinent facts with their family law attorney when preparing to file for divorce. All of these definitions, general principles and exceptions need to be applied to the facts of each individual situation to properly analyze and determine whose property it is in a divorce action.

Several years ago I wrote an article titled “Cinderella and the Law.” It is on my website www.merileeaparr.com if you’d like additional commentary on this subject. If you have any specific questions as to the character or your property, or whether you or your spouse have any separate legal interest in the other’s property, including businesses, accounts and investments, please consult with an experienced family law attorney to become more education and better able to advocate for your property rights.

• • •

Merrilee A. Parr is an experienced family law attorney serving the legal community since 1997. Ms. Parr is currently accepting new clients for the new year and can be reached for a consultation at 208-667-1227.

Disclaimer: The above is not intended as legal advice and does not establish any attorney client relationship.

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