Global Family Law Services

Take steps today to avoid divorce’s rocky road

| Feb 15, 2012 | Divorce, Marriage, Property Division

This article originally appeared as a column for the Cleveland Jewish News.

Valentine’s Day just occurred and love was in the air – and on the store shelves. As you were being inundated with chocolates and red candy hearts, divorce was hopefully the furthest thing from your mind. But if you proposed to your sweetie on Feb. 14, a little bit of knowledge now can save a whole lot of mishegoss (craziness) down the road, should the happily not last ever after.

Couples are marrying and remarrying later in life, which means that more people are entering into marriage having already accumulated some personal wealth. As a divorce attorney, I am continually counseling clients on what portion of their estate is marital property and what portion is their separate property.

At a very, very macroscopic level, property owned before the marriage is premarital, or separate, property of the spouse who owns it, as are inheritances and gifts made to one spouse. And all other property obtained during the marriage is marital property that will be divided upon divorce. There are dozens of “but-ifs” to this rule, but it is a good starting point for your planning.

When a couple is divorcing, it is generally pretty easy to figure out which stuff is one spouse’s separate property – the car you got as a college graduation gift and your bubbe’s china will be staying with you. The bar mitzvah money that your husband socked away will stay with him.

But other types of property – especially investments like real property and retirement and other accounts that fluctuate in value – are often more problematic to divide. The short answer is that the change in value from the start of the marriage to the end of the marriage is the marital portion that will be divided. But the court will assume that everything is marital unless proven otherwise.

So the person claiming something or some part of something is separate has the burden to prove its separateness by tracing it back to its premarital source – a task that can be both costly and difficult. This principle is based on the assumption that marital funds contributed to the growth in value or equity. On the other hand, passive growth on separate property does not automatically convert separate property to marital property.

Confused yet? Don’t be. Just remember one basic rule of thumb – the more separate you keep your separate property during the marriage, the more likely it will still be considered your separate property should you divorce.

If you, for example, have a retirement account from a previous job, rather than rolling over the funds into your current plan, you might want to keep these separate and let them passively grow in order to keep them out of the marital estate.

If you are getting a loan or, better yet, a gift, from your parents to purchase a home, keep good documentation as to whether the intended recipient is you alone or you and your spouse. If it is a loan, sign a promissory note with repayment terms. It is hard to convince a judge years later that the money from Mom and Dad was a loan if it is apparent that your parents never actually intended to collect until the marriage soured. And it is even more difficult to claim that the money was intended to benefit only you when the check was made out to both of you.

This is not to suggest that you are not going to be able to claim a separate property interest in the investment account that you started before the marriage and continued contributing toward. But, whether you are planning to marry or are already married, some careful thought to your joint and separate financial planning can save you a whole lot of heartache and money later.

*Andrew Zashin writes about law for the Cleveland Jewish News. He is a co-managing partner with Zashin & Rich, with offices in Cleveland and Columbus.