When entering a marriage, you bring your personal and financial history to the table. You and your spouse can be coming in with separate property, which is common especially for a midlife marriage. For example, you have a few children, some real estate and/or a small business. The lines can get blurry later into the relationship. Your spouse's name is added to a property title that was once solely yours, or you have been added to their will. Joint accounts and all, it raises the question: "What is mine and what is yours?"
Virginia marital property laws consider "marital property" to be all property you and/or spouse has acquired after the date of the marriage. Virginia recognizes "separate property" as property owned by only you. Property purchased before the marriage, property acquired as a gift before the marriage, or property purchased during the marriage with income earned before the marriage is all considered separate property. Differentiating marital property and separate property can sometimes get complicated. You can take certain measures to keep your property separate no matter the circumstance.
What to consider when protecting your separate property
It's important for you to take practical measures when bringing separate property into a marriage. Protecting your separate property secures you and your family in the future. Things to be aware of when dealing with assets in a marriage include:
- Adding your spouse's name to a deed: Adding your spouse's name to the ownership of your business or house may seem like a natural step. It is normal to want their name in the title since they are your current life partner. It may be wise to wait a few years before turning your separate property into marital property, or adding your spouse to a deed or will.
- Spending marital assets on a home or business: A business may be separate property if you conceived the business before the marriage. This can change if your spouse contributes value to the business by investing time, labor and/or money. The same goes with a home: Spending marital assets on your home and business can lead to that asset becoming marital property.
- Depositing separate assets in a joint account:You can practice caution with your finances after being married. Depositing your income into your own accounts created before the marriage seems like a safe bet. But these earnings can still be considered marital property regardless of the form in which the title is held.
- Procrastinating on a prenuptial agreement: A prenuptial agreement protects your assets and children you might have before coming into a new marriage. A prenup includes all your financial assets such as real estate, cars, savings and other investments. A prenup will ensure all your assets or debt is distributed the way you wish in case your marriage ends or your spouse passes away.
Additional ways to ensure your property is separate
A prenuptial agreement is a solid first step to separate and secure your assets in the event of a divorce. If you are already married, a post-nuptial agreement is another option. Separate funds should be kept separate, so it is best to avoid using separate funds to purchase assets during the marriage.
You might want to consider organizing records such as copies of property deeds, corporate records and tax returns. The more documentation you have, the easier it will be to claim your separate property with physical proof. Separate property is not always a guarantee, but careful planning can contribute to success when protecting your assets in the future.