Appreciation of separate assets may be open to property division

Appreciation of separate assets may be open to property division

On behalf of Stange Law Firm, PC posted in Property Division on Thursday, October 17, 2019.

There’s nothing easy about divorce. The marriage dissolution process often has very real emotional consequences, even if divorce ends up being better for an individual in the long run. Additionally, divorce can have a tremendous financial impact on an individual, which might make life post-divorce all the more challenging. This is why it is critically important for divorcing individuals to be aggressive during the property division process, which starts with knowing what assets are in play.

Generally speaking, assets acquired prior to marriage are deemed separate from marital assets and are therefore exempt from the property division process. There are, however, some exceptions to that rule. For example, separate property may wind up being deemed marital in nature if it is commingled with marital assets and utilized by both spouses as if it were jointly owned. Although it may seem relatively easy to distinguish between marital and separate property, it can actually be a highly contentious and complex legal issue.

Take, for example, the appreciation of separate property. Although an asset may be kept separate from marital assets, its appreciation value during the course of marriage may be subjected to property division if marital assets or a spouse’s labor has contributed to that appreciation. Of course, the spouse who doesn’t own the property will only then be able to seek a fair share of the appreciation for which the marriage can be credited, but in high-asset divorces that portion can be significant.

Many Midwesterners have a lot at stake when their marriages dissolve. When they improperly handle settlement negotiations and legal arguments in court, they can wind up losing out on assets that they would otherwise be entitled to during the course of property division. This is why many Midwesterners choose to work closely with a legal advocate when dealing with these matters.

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