Distribution of Property in a Legal Separation
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What Is Legal Separation?
“Legal separation” is when a court issues a formal judgment regarding how a couple is to manage their assets during separation. The judgment allows the couple to live separately while still retaining the legal status of married.
Legal separation is similar to a divorce in that related issues, such as property distribution and child custody, will be addressed. However, it is different from a divorce because the spouses will not be entitled to re-marry. The term “separation” refers to spouses who are living apart but have not formally ended their marriage.
Legal separation is sometimes referred to as “separate maintenance.” While this is a common term, “maintenance” in a divorce or separation context refers to spousal support such as alimony payments. Therefore, the two terms, legal separation and separate maintenance, should not be confused.
How Does Legal Separation Affect Property?
The distribution of marital property during legal separation is very similar as in a divorce proceeding. This is intended to make distributing property an easier process upon divorce..
Most states follow common law rules, which typically call for the “equitable distribution” of property. By contrast, nine states follow community property rules. In community property states, the marital property will be distributed equally between partners. In equitable distribution states, the marital property will be distributed according to several factors that the court will use to divide property fairly.
Separate property is property that was acquired before marriage or given to one individual spouse as a gift or through inheritance. Separate property should be distributed to the owner upon legal separation.
Occasionally, spouses may take actions that convert or transmute separate property into marital property, or vice versa. The court will individually assess disputed items to determine ownership. It is not uncommon for courts to require written proof to establish the couple’s intent to transmute an item of property.
What about Property Obtained after a Legal Separation?
The effects of legal separation will vary by state and by the terms of the agreement. In some states, legal separation may terminate the marital estate and call for a distribution of property between partners. Additionally, if the court orders it or the couple agrees to it, any assets obtained by an individual spouse will be classified as separate property, meaning any wages or income will be directed to each individual’s separate estate.
Sometimes there may be issues with income and property division immediately after a legal separation. For example, one spouse may have opened a business during or immediately after legal separation, while the funds are still being sorted out. If the person has used marital funds to start the business, then the other spouse may be entitled to reimbursement for their portion of the marital funds.
What Can I Do to Protect My Property Interests?
In a legal separation, spouses often take the following actions to protect their assets:
- Finances: Each partner may consider opening separate, individual accounts. Moreover, both spouses may seek to close or freeze joint accounts.
- Personal Property: Personal property may get lost in the mix, and as a result it is not uncommon for people to take extra steps to ensure their property is in their possession.
- Real Property: If neither partner can come to an agreement about real property, things can get complicated, and may require costly court intervention. However, if either spouse agrees to assume responsibility for certain real property, the other spouse should ensure they have their named removed from any titles, mortgages, leases, and utility accounts.
Thus, it is wise for couples to list any specific details or instructions in a separation agreement. This typically requires some compromise or negotiation between the parties.
Do I Need to Hire a Lawyer for a Legal Separation?
Legal separations are serious matters and will bring about drastic changes in lifestyles for both spouses. You should contact an attorney before filing anything in a court of law, as they can help you prepare the necessary documents and information. Additionally, in the event of a separation agreement or negotiation between the parties, a family lawyer can help ensure your property is protected.
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Last Modified: 04-08-2015 12:50 PM PDT
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