EYE ON YOUR FUTURE: Marital vs. Non-Marital Assets
It is really easy to do when you are in love.You just got married and your new husband or wife has moved into the home you owned before the marriage. It is death ‘til you part so discussions move toward putting your new spouse on the home’s title.
Then discussions turn to pooling finances together into one pot to make it easier to start a family. So that inheritance from your grandparents and the settlement from the car accident you received is moved into a joint love nest.
Down the road, however, the worst happens: unforeseen stresses on the marriage lead to divorce. Of course you can get all those assets you pooled together back right?
Wrong, says Ayo & Iken Tampa Attorney James Wimsatt.
The moment you put your spouse on the home title it went from a non-marital asset to a marital asset, so even though you owned it before the marriage, in Florida, an equitable distribution state, the spouse is entitled to half its value.
What about your inheritance or the settlement money? It was me who suffered the anguish of losing a loved one. I endured the pain of the car crash that left me disabled. So the money from those two life circumstances should surely be mine.
If you put it in a joint account with your spouse, he or she is entitled to half as well.
“It can be a difficult situation when you are married and it comes to co-mingling of finances. What people do not realize is when you combine things they become marital assets that are at issue in a divorce,” Wimsatt.
Wimsatt recently saw first-hand how important these issues are in a case where his client received a hefty cash settlement from a vehicle accident and put it in a joint account with her husband. It proved to be an action that put millions of dollars into play in the divorce that ensued.
That is not to say that money from an inheritance or settlement cannot be used for family needs that may arise. If your roof is leaking, you can take money out of your account separate from the marriage to get it fixed without the rest of the funds becoming a marital asset, Wimsatt said.
Repairs or upgrades on a non-marital home can also be done with marital funds without turning the home into a marital asset, though the value that is added to the house can be considered marital. So, Wimsatt recommends getting a home appraisal at the time of a marriage, which can later be compared to a new appraisal if there is a divorce to determine any increase on the value of the home during the marriage.
Foresight can be key to your future even if you think you have the perfect marriage, Wimsatt said.“Even if you do think your marriage is going to work, it might be a good idea to keep some things separate,” Wimsatt said. “If you are talking about a settlement, for instance, that is worth millions of dollars, that is something significant to consider. You can still do things for you and your family with it, but maybe keep it separate.”