Separate property is the property owned by each spouse when they marry, as well as the property each receives via gift, inheritance, or personal injury settlement during the marriage. With a few exceptions, marital property is that which is accumulated during the marriage. Unless a pre-nuptial or post-nuptial agreement dictates otherwise, marital assets are divided equitably between spouses when and if they divorce.

Though the arrangement might seem simple, division of assets during a divorce is often the most contentious point, especially because it’s possible for separate property to become marital property during the course of a marriage.

How Separate Property Becomes Marital Property

A good example of separate property becoming marital property is the asset of a home. If one spouse owns a home prior to a marriage, but the other spouse spends the majority of the marriage managing the home and contributing to improvements, the court could determine the asset increased in value due to active appreciation. The house itself, assuming it was never transferred into joint ownership, will remain separate property, but the non-owner spouse could argue he or she has contributed to the home’s increase in value. In some cases, the courts will take into account the value and equity in the home prior to the marriage when determining how to handle its distribution. While the original value of the home will remain separate property, the appreciation could be considered a marital asset distributed in a divorce. For many divorcing couples, the appreciation of their home can have significant value.

Bank accounts that were originally separate and transferred into joint ownership can transform a separate property asset into a marital asset. This legal transformation may possibly be avoided if meticulous records are kept showing the original source of the money and it remains intact, or possibly if once can show that the new account was set up for “convenience purposes.” Another way to protect such accounts is to have a Pre-Nuptial Agreement which identifies assets of these type as separate property not to be distributed in a divorce.

Protecting Assets with an ATRO

One of the most common concerns that arises in a divorce is whether one spouse can alter asset ownership once divorce proceedings have begun. An Automatic Temporary Restraining Orders (ATRO) prevents either spouse from selling, transferring, or borrowing against property, borrowing or selling insurance held for the other spouse, modifying beneficiaries on policies, changing bank accounts, and destroying or hiding assets. Such Automatic Orders are triggered by the commencement of a divorce action and service of the Summons on a spouse.

For more information about the protections provided by an ATRO, check out this article from Forbes.com.

Asset distribution in a divorce is complex and can be the catalyst for many arguments. If you are concerned about the distribution of your assets or you have questions about how New York’s equitable distribution laws will affect your case, contact the Law Offices of Elan Wurtzel by calling 516.822.7866.

Source: Forbes Divorcing Women: Here’s What You Need to Know About ATROs