Are Premarital Assets Protected in Divorce?

Property division is one of the most pressing issues in the divorce process. In Florida, the courts divide all the assets and liabilities in accordance with a so-called “equitable distribution” principle. By awarding each party a similar value of marital property, they ensure that the split is fair, though not always equal.

According to the general rule, only marital assets are subject to division during a marriage dissolution, while premarital property is left with the spouse owning this property before marriage. However, numerous exceptions and regulations may influence the distribution process. Normally, Florida courts may start with a 50/50 distribution but make a totally unexpected decision after considering the relevant factors in a specific case and finding out that such an equal split is unjustified.

So, if you owned any assets before marriage, it is not always guaranteed that they will remain with you when you leave your spouse. Therefore, to know what you can count on after divorce, you should understand what property can be divided and what principles guide this division.

In this article, we aim to explain the difference between marital and non-marital assets, what happens to property owned before marriage in Florida, and how to protect your premarital assets in divorce.

What Is Considered Separate Property?

As a commonly accepted rule, during a divorce, property owned before marriage or received as a gift or inheritance by one of the spouses is considered separate. It generally defines what assets cannot be split in a divorce. Still, there may be certain exceptions considered by the court.

As outlined in Fla. Stat. § 61.075(6)(b)1-5, separate property includes:

  • Any assets acquired by one party before the marriage;
  • Gifts received from any source, except from the spouse, before or during the marriage;
  • Inheritance received by one of the parties before or during the marriage;
  • Any liabilities incurred by one party before the marriage;
  • The income one spouse gets from separate property during the marriage if it was not treated as marital by the couple;
  • Any assets and liabilities obtained during the marriage and defined by the spouses as non-marital in a specific prenuptial or postnuptial agreement;
  • Liabilities incurred via forgery;
  • Any assets and liabilities acquired or incurred, respectively, during the marriage in exchange for assets and liabilities listed above.

Conversely, marital property consists of assets and liabilities acquired and incurred by the spouses jointly or individually during the marriage. Besides, it does not matter whose name they are held in – only one or both spouses.

As specified earlier, much depends on a specific case, and the courts are normally guided by several considerations when making decisions about property distribution. Florida case law can explain a lot about what property is considered non-marital and what assets are protected in a divorce.

What Happens to Property Owned Before Marriage?

If you owned any property before marriage, you will most likely retain it as the only owner. Yet, the issue tends to be much more complicated than it may seem at first glance.

The first thing to do while splitting any property is to define which part of it is marital and what belongs to only one of the spouses and should not be subject to division. So, when determining your property before marriage, divorce attorneys or the judge are guided by a set of rules, statute stipulations, judicial precedents, and exceptions since it is often not just a matter of the date on which you acquired this or that item.

The thing is that spouses may sometimes turn their premarital assets into marital, which may often happen unknowingly. Therefore, separate property may become marital as a result of commingling, gifting, or adding the other spouse’s name to its title, even unintentionally.

Consider a few examples of possible scenarios when separate property turns into marital:

  • If you add your spouse’s name to the title of your personal bank account, real estate, or any other item, it will become a marital asset.
  • If you inherit a large sum of money from your grand-uncle and spend it on a country house for your family, the purchased asset is marital and does not belong solely to you.
  • If you use the money from your family budget to repair or remodel the house you bought before the marriage, a part of this house will become a marital asset.
  • Moreover, if the value of the repaired or remodeled house appreciates as a result of your mutual investments, the resultant appreciation is a marital asset.
  • If you let out some property you owned before the marriage and the proceeds are deposited into your joint family savings account, this income is a marital asset.
  • If you use your personal bank account to pay the marital bills or debts, this account will become a commingled marital asset.

Generally, commingling means combining your separate and marital property, which makes them, or some part of them, marital and subject to division.

Therefore, there is no definite answer to the question, “Are assets before marriage protected?” The fact that you bought something prior to the wedding date does not always guarantee that you will retain sole ownership. So, if you really want to protect your assets if you decide to divorce, you’d better keep your personal possessions separate.

Is a House Owned before Marriage Considered to Be Marital Property?

If you owned a house before marriage, it is likely to be your separate property, not subject to division if the court follows a generally accepted rule. Nevertheless, several exceptions may alter the entire deal.

If you want to keep the house you bought before the marriage to yourself, then

  • Do not define it as marital in your pre- or postnuptial agreement;
  • Do not put your spouse’s name on the house;
  • Do not let them make any valuable contributions to the house’s appreciation.

Let’s look at the main factors that may influence the categorization of a premarital home in the event of divorce.

Valid Written Agreement

Some couples choose to enter into a valid written agreement before or after they marry, in which they specify all the details about their property. Although many view such a step as too mercenary and nonsensical for a loving couple, this document will be the first factor for the court to consider and honor while dividing any property during a divorce.

Name on the Deed

If you have a house bought before marriage, it is considered your own separate property. However, once you have put your spouse’s name on the deed, it becomes marital estate regardless of any circumstances, including the length of time you have owned it, the entirety of the paid mortgage, or other factors. As long as only your name is on the deed, the court cannot legally award the house or even its part to the other party, no matter how much they have put into it. However, your spouse can get a certain portion of other marital assets as a part of equitable distribution for their contribution.

Increase in Value

While certain agreements and deals can prevent your premarital house from splitting during divorce, its appreciation can make your spouse entitled to some portion of marital property.

A range of assets you acquired prior to the wedding tend to grow in value during your marriage, which is especially true for real estate. According to Fla.Stat. 61.075(6)(a)b, any appreciation or increase in value of separate property caused by any party’s efforts or contributions is considered a marital asset subject to division. Mind that it does not influence the categorization of the asset in question, meaning that the house is still your separate property and cannot be awarded to your spouse. However, they may be entitled to a portion of its appreciation, depending on whether it was active or passive, as defined by the court.

Active appreciation presupposes some active effort on the part of the spouses to contribute to the asset’s value increase, which is the difference between its market value before the marriage and at the moment of divorce. If your spouse made some mortgage payments or contributed their time, effort, or money to the house’s improvement, which caused its appreciation, this increased value is considered a marital asset subject to division.

Passive appreciation occurs without either party putting any effort, time, or resources into it. The value grows due to external forces outside of your control, such as a lapse in time or market conditions. In such a case, even the house’s appreciation remains your separate asset.

Ways to Protect Any Property Owned Before Marriage

Entering into a prenuptial (prenup) agreement is the most reliable way of asset protection before marriage. You can also sign a postnuptial agreement after you marry, which will have the same legal force for the court. In it, you can specify all the terms concerning your property, define separate and marital assets, outline your spouse’s entitlement or non-entitlement to active or passive appreciation, etc. Such a valid written agreement will dictate the way your property is divided after divorce since courts consider them in the first place. Therefore, you will protect your separate assets acquired before the marriage, regardless of any marital funds or your spouse’s contribution invested in them.

If you want to know how to protect premarital assets without a prenup agreement, here are a few useful tips:

  • Keep your assets separate. Once you deposit any portion of your family income into your own savings or your personal proceeds into your joint savings account, they become marital and will be equitably divided during the divorce process. If you use the money from your individual account to pay bills, buy things, or help with any other expenses for your marital home, your account will become marital. Such commingling results in the strict transmutation of assets, making them lose their separate character. So, make sure that you do not mix your separate and marital bank accounts, savings, possessions, or any other assets.
  • Keep records. Ensure you have all the necessary documents to prove the sole ownership of your assets. Keep clear records of any property you owned prior to the marriage, gifts you received before or during it, inheritance from any third party, etc. Accurate documentation of such issues will help to prove that these items cannot be divided between you and your spouse.
  • Secure evidence. Any reliable evidence of your sole ownership of this or that item or account will be useful to protect assets before marriage. So, try to collect all the relevant financial documentation that will help in the tracing approach. Original purchase receipts tend to contain the purchase date and venue, which will be valuable evidence to prove ownership, just like agreement contracts for any funds or insurance coverages, etc. Financial statements from bank savings or investment accounts are also helpful if payments were made in cash or receipts were lost. Besides, gather property deeds, tax returns, and any other papers that can be used as evidence of your earnings and expenditures. Secure witnesses to testify about any fact of purchase or acquisition if needed.
  • Revisit beneficiary designations. Some assets, like retirement plans, insurance policies, or some specific bank accounts, require a beneficiary to be indicated. If this beneficiary is your soon-to-be ex, they may be entitled to a part of these accounts and plans that are supposed to be your separate premarital assets. Consider updating and changing beneficiary designations to prevent your spouse from making any claims in this regard.

If you are still not sure how to protect assets before marriage, you’d better contact a lawyer for legal advice. A qualified family attorney will explain all the nuances of property division and offer some efficient tactics for protecting assets from divorce.