What Is Separate Property?
Separate property and community property: If you live in a community property state, you've probably heard these terms before. But what exactly is separate property, and how is it different from community property?
The simple explanation of the community property system is that anything you own before marriage is separate property, and anything you acquire after marriage is community property. If you divorce, you get to keep 100 percent of your separate property, and you get 50 percent of your community property.
As always though, there are exceptions. Here are a few points to keep in mind when figuring out what's considered separate property:
Property You Owned Before Marriage
This is the simple one. Anything you amassed before marriage, including any debt, is separate property. As long as you keep it separate from community property, it will stay separate property. (However, issues like commingling and changing separate property to community property can throw a wrench into things; that's where an experienced lawyer can help.)
Income From Any Separate Property
Any income deriving from your work efforts during a marriage is generally community property. However, passive income from separate property is your separate property, even if it's earned during the marriage. This can include rent from a separate property house or interest from a separate property bank account.
Personal Injury Judgments
If you are injured during your marriage, part of your personal injury judgment is your separate property (namely, the portion of the judgment used to compensate you for your pain and suffering). The portion of the judgment that compensates for your medical expenses and lost wages is generally considered community property.
Inheritances
The inheritance you received from your Great Aunt Mildred is separate property. It does not matter if you received the inheritance before or after marriage.
Gifts Made Specifically to You
Any gift given specifically to you only, even after marriage, is your separate property. Keep the card that came with the gift because you'll have to show with "clear and convincing" evidence that the gift was intended to be yours only.
Anything Designated as Separate Property by Agreement
Any community property can be converted to separate property, and vice versa, with a postnuptial agreement -- a contract made and signed after marriage.
As mentioned above, if you need help determining what is and isn't your separate property, an experienced divorce attorney will be able to help.
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