WHAT IS MARITAL PROPERTY AS OPPOSED TO NON-MARITAL PROPERTY?
In a divorce proceeding, there are two types of property – marital property and non-marital property. In some states, the two types of property are treated very differently. Other states may not automatically follow this distinction, but the distinction may still be persuasive to a court when determining how to divide property in a divorce.
Marital Property: Marital property is typically all property that is acquired by a couple after their marriage. Upon filing for a divorce, each spouse will have an ownership interest in this property. The court will determine how much of the property each spouse owns during the divorce. Once the court issues a final order for divorce with property divisions, the overall property interest the parties had when the divorce was filed is extinguished.
Upon filing for divorce, the marital property belongs to each party and cannot be sold, destroyed, or disposed without consent from each spouse. Parties are also prohibited from doing debt-collection activities, such as attaching a lien to a home. Since both spouses have an interest in the marital property, any creditors looking to collect property for a debt obligation that is created after the divorce filing must wait until the court resolves the property division to act.
Non-Marital Property: Non-marital property is property that was purchased before the marriage by either party or was given to one spouse as a gift or inheritance after the marriage. Any income from the non-marital property is also treated as non-marital property. For example, if a spouse owned a rental property prior to the marriage and earns income from that property, that rental income will be considered non-marital property as well the rental property itself.
In Kansas, and some other states, the spouse who does not own the non-marital property will gain an interest in the property upon a petition for divorce being filed. Even though it may seem like non-marital property belongs to one specific party, it is still protected from any encumbrances, like a lien, that are initiated after a petition for divorce is filed. Due to the fact that both parties have an interest in the non-marital property, it is vulnerable to equitable distribution.
Property Division: In states, like Kansas, that follow equitable distribution property division, the distinction between marital and non-marital property is not as important as in states that follow community property division. This means that all property, not just marital property, is available for division in a divorce. However, the court will likely not ignore the marital/non-marital distinction entirely when determining how to fairly divide property. It is one of several factors that a court will consider when determining how to divide property. In Kansas, K.S.A. § 23-2802 outlines some of the factors the court should consider when dividing property. These factors include: (1) the age of the parties; (2) the length of the marriage; (3) the property owned; (4) the present and future earning capacities of each spouse; (5) whether the property is marital or non-marital; (6) the family obligations each party has; (7) any maintenance (alimony) obligations; (8) if either spouse has squandered any assets; and (9) the taxes involved with dividing property. The court is not limited to only these factors – the court may also consider any other facts to determine a just and reasonable division of the property.
Keeping Non-Marital Property: In divorce proceedings, it is important to remember that courts have the ability to order non-marital property to be transferred or sold. This means that property owned exclusively by one spouse prior to the marriage could be given to the other spouse by court order in a divorce. However, courts tend to acknowledge the inherent tension in this notion and will strive to reach an agreeable result for both parties. Generally, this agreement will require a trade-off of some kind. The court’s goal is to reach an equitable distribution, so the particular property being given to a certain spouse is less important to the court than the monetary value of that particular property.
For example, if Spouse 1 was given a gift of jewelry prior to the marriage, it would be considered non-marital property. If Spouse 1 owed a debt, a debt collector would be free to have the jewelry levied by the local sheriff to satisfy the debt. However, if Spouse 1 files for divorce, Spouse 2 immediately gains an interest in the jewelry. Now, it will be determined by the court which interest will be terminated when the divorce is finalized. Therefore, since the property belongs to both spouses until a decree is granted by the court, a debt collector cannot ignore Spouse 2’s interest and ask a sheriff to levy the property.
There is a chance that Spouse 1 may have a strong emotional tie to the jewelry, whether it is has a high monetary value or not. If the monetary value is minimal, it is likely that Spouse 1 will be able to keep the property. On the other hand, if the jewelry has a large monetary value, Spouse 1 will likely have to give up a large amount of marital property to Spouse 2 to compensate for the monetary value of the jewelry. This may seem unfair to Spouse 1 since the jewelry was given to him/her as a gift prior to the marriage, but it is what must be done to maintain equitable distribution among the parties.
Dividing property can be one of the most challenging parts of a divorce proceeding. Each side is likely to have non-marital property he or she desires to keep and believes should be his or hers alone. However, the law does not share the same opinion. The law requires all property to be divided fairly. Property division requires careful planning to ensure both an equitable distribution required by law and a desired outcome for the spouse. This is why it is incredibly important to have experienced legal counsel to help negotiate and plan the property division.