Navigating the Fine Line: Marital v. Separate
In some cases, the
actions of married parties can transform separate property into marital
property. If one spouse
has separate property, but treats it as though it were marital, courts may
consider the property to be marital in nature, and thus subject to equitable
division. One of the most common ways this can happen is through the commingling
of separate and marital assets during a marriage, such as one spouse
transferring premarital, gifted, or inherited funds to a marital bank account.
The separate property of one spouse may also become marital through
non-economic contributions of the other if the contributions cause the property
to appreciate in value during the marriage.
Part Marital and Part Separate
It is also possible
for certain assets to be partially marital and partially separate property. For
example, even retirement accounts earned or
contributed to solely by one spouse may be subject to equitable division. In
most cases, the determining factor for division of such accounts is not who
earned the asset, but when the asset was earned. Any portion of the retirement
account which was earned by one spouse before the marriage is considered that
spouse's separate property. Generally, the other spouse has no claim to this
portion of the retirement account in the divorce. However, any funds in the
account which were acquired after the marriage commenced are considered marital property
and are thus subject to equitable division.
Ultim ately, the Court Decides
Of course, because Georgia is an equitable division state, courts have broad discretion in determining which spouse should retain the marital portion of any retirement accounts. In some cases, a judge may determine that it is fair for the spouse who earned the asset to retain it in full, even if a portion of the account was earned during the marriage. The designation of part of the account as marital property does not necessarily guarantee that it will ultimately be split between the spouses. Instead, it gives the court the discretion to allocate the property between the spouses in an equitable manner.
Because Georgia law
regarding the classification of property as marital or separate is very
complex, it may be helpful to speak with a family law attorney to evaluate the unique circumstances surrounding the equitable division of
assets and liabilities in your divorce.
Written by: Katie Morgan Johnson