What Counts as Marital Property — and What Doesn’t?
Going through a divorce brings up many questions; one of the most significant is how your property will be divided. Trying to figure out property division on your own can lead to confusion and unfavorable outcomes. You need a knowledgeable family law attorney by your side.
At Kesling Law Firm, we have spent over a decade guiding clients through this process. This is more than just a legal procedure; it’s a deeply personal and often stressful time. We will help you understand and protect your rights, making sure you feel comfortable and informed every step of the way.
We are here to provide clear, practical legal counsel for clients in Orange Beach, Gulf Shores, Josephine, Foley, Elberta, Summerdale, Robertsdale, or anywhere throughout Baldwin County and the Alabama Gulf Coast.
The division of assets is a significant part of any divorce settlement. Understanding what the court considers marital property versus separate property is the first step toward a fair resolution. This distinction determines what will be split between you and your spouse and what you get to keep. Let’s break down the key differences.
Defining Marital Property
Marital property includes most of the assets and debts that you and your spouse acquired during your marriage. It doesn't matter whose name is on the title or who made the purchase. The court will likely view it as belonging to both of you If it was obtained from the day you were married until the day you separated.
Common examples of marital property include:
Real estate: The family home, vacation properties, or rental units purchased during the marriage. Even if only one spouse’s name is on the deed, it’s typically considered marital property if bought with marital funds.
Vehicles: Cars, boats, RVs, and other vehicles acquired while married.
Bank accounts: Checking, savings, and joint accounts containing money earned during the marriage.
Retirement accounts: The portion of pensions, 401(k)s, and IRAs that accumulated during the marriage is usually considered marital property.
Investments: Stocks, bonds, and mutual funds purchased with marital income.
Personal property: Furniture, art, jewelry, and electronics bought during the marriage.
Business interests: A business started or grown significantly during the marriage can also be subject to division.
Debts are also part of the equation. Mortgages, car loans, credit card balances, and other liabilities taken on during the marriage are generally considered marital debts and will be divided between the spouses.
Defining Separate Property
Separate property is anything that belonged to one spouse before the marriage and was kept separate throughout. It also includes certain assets acquired during the marriage that are not considered joint property. These assets are not subject to division in a divorce and remain with the original owner.
Categories of separate property often include:
Premarital assets: Any property, money, or investments you owned before you got married. This could be a house you bought, a savings account you had, or a car you paid off before the wedding.
Inheritances: Money or property inherited by one spouse, even if it was received during the marriage, is usually considered separate property.
Gifts: Gifts received by one spouse from a third party (like a birthday gift from a parent) are typically separate property. Gifts exchanged between spouses, however, are often viewed as marital property.
Personal injury awards: The portion of a settlement intended to compensate for pain and suffering is generally separate property. However, any part of the award that covers lost wages or medical bills paid with marital funds might be considered marital property.
The key to keeping separate property separate is avoiding "commingling." This happens when you mix separate assets with marital ones. For example, if you deposit a large inheritance into a joint bank account used for household expenses, the court may rule that you intended to make it a marital asset. Keeping premarital funds in a separate account under your name only helps maintain their status as separate property.
What About the Marital Home?
For many couples, the family home is their most valuable asset, both financially and emotionally. Deciding what happens to it can be one of the most contentious parts of a divorce. There are generally three options:
Sell the home: The house is sold, and the proceeds are divided between the spouses after paying off the mortgage and any related costs.
One spouse buys out the other: One spouse can keep the house by refinancing the mortgage and paying the other spouse their share of the equity.
Co-ownership continues: In some cases, especially when young children are involved, a couple may agree to continue owning the home together for a set period, with one spouse living there. This arrangement is less common and requires a detailed agreement.
How Alabama Law Views Property Division
Alabama is an "equitable distribution" state. This does not mean property is split 50/50. Instead, the court aims for a division that is fair, which may or may not be an equal split. A judge will consider several factors when deciding how to divide marital assets and debts.
According to Alabama law, the court will look at:
Length of the marriage: Shorter marriages may result in a division that more closely resembles each spouse's original financial position, while longer marriages often lead to a more even split.
Each spouse's earning capacity: The court considers the age, health, and potential future income of both individuals.
Contributions to the marriage: This includes both financial contributions, like income, and non-financial contributions, such as homemaking, childcare, and supporting the other spouse's career. Alabama law recognizes that a stay-at-home parent's work has economic value.
Marital misconduct: While Alabama allows for no-fault divorce, fault can play a role in property division. If one spouse’s misconduct (like adultery or financial waste) led to the breakdown of the marriage, the judge might award a larger share of the assets to the other spouse.
Separate property: The court will consider the value of each spouse's separate property when determining a fair division of the marital property.
Because so many factors are at play, the outcome of property division can vary from one case to the next. This is why presenting a clear, well-documented case is so important for protecting your financial future.
Family Law Attorneys Serving Orange Beach, Alabama
For over a decade, Kesling Law Firm has represented clients across the Alabama Gulf Coast, including Orange Beach, Baldwin County, Gulf Shores, Josephine, Foley, Elberta, Summerdale, and Robertsdale. Our attorneys are known for their commitment to providing exceptional legal counsel.
With a deep understanding of family law, we strive to make sure your voice is heard and you receive the best possible outcome. Call now to schedule a consultation to work out your family law issues.