What Assets Are Protected from Divorce Settlements?

When going through a divorce, one of the most significant concerns for individuals is the division of assets. The process of dividing assets in a divorce settlement can be complex and stressful, but it’s essential to understand what assets are protected during this process.

If you’re starting to wonder what will happen to the wealth you’ve built before and during your marriage, it’s a good time to talk to the family law team at Olmstead & Olmstead. Call our Manassas office at 703-361-1555 to get started.

The Basics of Asset Division in Divorce Settlements

In divorce settlements, figuring out who gets what can be a significant headache. At the core of this process is the distinction between two types of assets: marital assets and separate assets. Marital assets are generally everything you and your spouse acquired together during your marriage, such as your home, cars, and savings accounts. These are the items on the table for division. 

On the flip side, separate assets are what you brought into the marriage, along with gifts or inheritances you received alone. These usually stay with the original owner and aren’t split up in the divorce.

Understanding this division is crucial because it outlines the basic expectations of the division of assets. If there are disagreements about what assets are marital versus separate, documentation backing up your viewpoint can be very helpful.

Identifying Protected Assets: What Stays Yours?

In the midst of a divorce, figuring out which of your belongings are off-limits for splitting up is crucial. For example, if you owned a home prior to the marriage and continued paying for it on your own during the marriage, that would likely remain solely yours. Additionally, if you received any inheritances during the marriage, those too would stay your sole property after divorce.

One of the confusing issues that may arise in this part of divorce is the commingling of assets. If you have separate assets but then proceed to combine them with marital assets during the course of your marriage, the odds are good that they will then be considered marital assets. Using the example of an inheritance, imagine receiving $100,000 from an inheritance. Instead of putting it in a separate account, you put it in your and your spouse’s joint account that you use to pay bills and other necessities. When you later divorce, trying to figure out what is yours and what is marital property could be nearly impossible.

The Role of Prenuptial and Postnuptial Agreements

Prenuptial and postnuptial agreements are like a safety net for your assets in the event of a divorce. They clearly state who owns what before things get messy. These documents are incredibly helpful because they explicitly define what’s considered separate property—basically, they spell out what you’ll walk away with, no questions asked, if the marriage ends. 

For instance, if you inherited a family business before getting married, a prenuptial agreement can ensure that it remains in your hands alone. Creating one of these agreements might not sound romantic, but it’s a practical step toward protecting what’s important to you. It’s about having a clear, upfront conversation with your spouse about finances, which can actually strengthen your relationship by building trust and transparency. Plus, in the unfortunate event of a divorce, it simplifies the process, making it less stressful and more straightforward for everyone involved.

If prenuptial agreements are created before you marry, when everything is optimistic and rosy, what about postnuptial agreements? There are a number of reasons a couple may agree on a postnuptial agreement. One partner may be unfaithful or make such bad financial decisions that their spouse’s trust in them is broken; in that case, a postnuptial agreement may be a requirement for the spouse whose trust has been broken. With a postnup, they can ensure that they won’t be left out in the cold if the marriage ends.

Start Your New Chapter with Olmstead & Olmstead

Let’s sit down and discuss your next steps as you prepare for your Virginia divorce. No matter the circumstances of your divorce or how amicable or contentious it is, we’re here to help. To set up a consultation with our family law team, call us at 703-361-1555 or get in touch online.