What Assets Are Untouchable in a Divorce?

Divorce can bring up a lot of questions about how assets will be divided. It’s helpful to know that not everything you own will be split up. Some assets are considered untouchable, meaning they stay with the person who originally owned them. Knowing which assets fall into this category can give you peace of mind.

Concerned about how your assets will be handled in divorce? Let’s talk. Call Olmstead & Olmstead at 703-361-1555 to set up a time to talk now.

Separate Property

Separate property refers to items owned by one spouse that are not part of the marital estate. Generally, this means items that one spouse had prior to the marriage that they did not commingle with marital assets. If your separate assets get commingled with marital property, disclose this to your lawyer—your spouse may try to claim that those separate assets should be divided.

Inherited Property

Inherited property is usually seen as separate property in a divorce, meaning it doesn’t get divided. If you inherit something while you’re married and keep it in your name only, it typically remains yours alone. However, problems can arise if you mix inherited assets with marital funds. For example, depositing inherited money into a joint bank account could make it subject to division. To keep your inherited assets separate, you need to maintain them individually and keep thorough records that show they were not mixed with marital property.

Assets Protected by Prenuptial Agreements

A prenuptial agreement is a legal contract created before marriage that outlines how assets will be divided if a divorce occurs. This contract can cover various types of assets, such as business interests, real estate, and investments. By setting these terms beforehand, a prenuptial agreement helps ensure that certain assets remain separate and are not included in the marital estate. For the agreement to be effective, it must be fair and transparent. This can provide an extra layer of protection for your assets.

Gifts Received During Marriage

Gifts received by one spouse during the marriage are generally considered separate property, provided they are intended solely for that spouse. For example, if you receive a piece of jewelry, a monetary gift, or even a car, it typically remains yours alone. However, the protection of these gifts can become complicated if they are mixed with marital funds. For instance, if you deposit monetary gifts into a joint bank account or use gifted funds for joint expenses, they may lose their separate status.

To keep gifts untouchable, it’s essential to maintain clear documentation. Keep any cards, receipts, or notes that came with the gift to prove it was intended for you alone. It’s also wise to store these gifts separately from shared items or funds. For example, keeping gifted jewelry in a personal safe or maintaining a separate bank account for monetary gifts can help protect these assets.

In some cases, the intention behind the gift can also come into play. If a gift is clearly meant for both spouses, such as a down payment on a jointly owned home, it may be considered marital property. Understanding the nuances of gift ownership and taking the necessary steps to document and separate these gifts can help ensure they remain your personal property during a divorce.

Retirement Accounts and Pensions

Retirement accounts and pensions can be a tricky area during a divorce. Some accounts, like IRAs established before marriage, might remain separate, but others could be seen as marital property and subject to division. It’s essential to understand the rules surrounding these accounts. For instance, dividing retirement accounts often requires a Qualified Domestic Relations Order, which is a legal document that outlines how these assets will be split.

Pensions may or may not be subject to division, depending on when they were earned and the terms of the pension. If you earned part of your pension during the marriage, that portion could be considered marital property. On the other hand, any portion earned before the marriage might remain yours alone. Keeping thorough records of when and how these assets were accumulated can help clarify what is considered separate versus marital property.

Let’s Talk—Call Olmstead & Olmstead Today

As you plan for everything that comes with divorce, find out how the team at Olmstead & Olmstead can help you prepare. Give us a call at 703-361-1555 or contact us online.