What Does Separate Property Mean?

Marriage can affect who owns property and how assets are divided in a divorce or transferred after death, but not everything a spouse owns necessarily becomes marital property. Assets owned before marriage, as well as certain gifts and inheritances received individually, may qualify as separate property. However, separate assets can sometimes become marital property through actions such as commingling funds or changing ownership, and the rules vary by state.

A financial advisor can help you consider how individually and jointly owned assets fit into your broader financial and estate planning strategy.

What Is Separate Property?

Separate property, also called non-marital property, is any property, real or personal, acquired before marriage, during marriage through inheritance or gift, during marriage by separate property funds and after divorce. If you own separate property that is income-producing, the income is also considered separate property. Separate property does not have to be divided between spouses if they divorce or one of them dies.

In the case of domestic partnerships, if the partners are registered domestic partners, the property is only considered separate if it was acquired before registration or paid for entirely with funds acquired before registration. The domestic partners can also include a list of their individual separate property with the domestic partnership agreement.

There’s often a question of who owns what in the case of a divorce or the death of a spouse. To answer that question, the laws of the state regarding separate and marital property must be accounted for. You also have to consider whether your state is a community property state or a common-law state, as laws may vary slightly in their legal definitions.

Separate Property vs. Marital Property at a Glance

The distinction between separate and marital property generally depends on when and how an asset was acquired, how it was managed during the marriage and the laws of the state where the spouses live. Property owned before marriage and certain gifts or inheritances may remain separate, while income and assets acquired during marriage are often considered marital or community property. However, these classifications can change depending on the circumstances.

Type of Property	Generally Separate or Marital?	Important Consideration
Property owned before marriage	Separate	It may become partly or entirely marital depending on how it is titled, used or commingled during the marriage
Wages earned during marriage	Generally marital or community	Treatment can depend on state law
Inheritance received by one spouse	Generally separate	Commingling or using inherited funds for jointly owned assets can complicate their classification
Gift made specifically to one spouse	Generally separate	Documentation showing that the gift was intended for one spouse can be important
Property purchased with marital income	Generally marital or community	Titling the property in one spouse’s name does not necessarily make it separate
Property purchased entirely with separate funds	May remain separate	The spouse may need records tracing the purchase back to separate funds
Increase in value of separate property	Depends on the circumstances	State law and whether marital money or either spouse’s efforts contributed to the appreciation can matter
Jointly purchased property	Generally marital or community	Ownership and division rules vary by state
Property addressed by a prenup or postnup	Depends on the agreement and state law	A valid agreement may establish how specified assets are classified and treated

Because marital-property laws vary significantly by state, these are general classifications rather than rules that apply in every situation.

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What’s the Difference Between Separate Property and Marital Property?

A couple discussing what to do with their home in a divorce.

It’s important to know if what you own is separate or marital property for the purposes of divorce and estate planning. This is also necessary if you decide to draw up a prenuptial agreement.

Marital property is everything you earn or acquire during the marriage. So if you buy a house, car or other possessions and pay for it with the income that you earn during the marriage, that is marital property. If one spouse inherits a house from their parents during the marriage, then that is the spouse’s separate property.

Separate property is generally determined by the following rules:

Property owned by one spouse before marriage is separate property. An example might be a car owned by you before you got married.
Property gifted to or inherited by one spouse before or during the marriage is separate. For instance, if an elderly aunt gives you the family’s antique silver flatware before or after her death, that would be your separate property.
Property acquired by one spouse during the marriage and never used by the other spouse is also separate. If you purchase a camera during marriage and it’s never used by your spouse, that is separate property.
Separate property is also that which both spouses agree on in writing belongs to one another. If both people come into a marriage with assets, they might want to agree in writing that their assets would come back to them in the case of divorce or death.
The definition of “separate” also applies to property that’s acquired by you as separate property and, if it’s income-producing property, the income also is separate. For example, if one spouse comes into a marriage with $50,000 in a savings account, that is separate property along with the interest. If that money is co-mingled with marital property, you’re in danger of losing your separate property.
Certain personal injury awards can also fall under separate property.

How Can Separate Property Become Marital Property?

An asset that begins as separate property may not always retain that classification. Depending on state law and how the asset is handled during the marriage, separate property can become marital property, or a spouse may acquire a marital interest in part of the asset. Two important concepts that can affect this distinction are commingling and transmutation.

Commingling Separate and Marital Property

Commingling occurs when separate property is mixed with marital property in a way that can make ownership difficult to trace. For example, suppose one spouse enters a marriage with $50,000 in a bank account and later deposits marital earnings into that same account. If money is repeatedly added and withdrawn, determining which portion remains separate could become more complicated.

Commingling doesn’t necessarily mean that all separate property automatically becomes marital property. In some cases, financial records may allow a spouse to trace funds back to their separate source. How courts handle commingled property varies by state.

Transmuting Separate Property

Transmutation generally refers to changing property from one classification to another through an agreement, transfer or other action recognized under applicable state law. For example, a spouse who owns a home before marriage might later add the other spouse to the deed. Depending on state law and the circumstances, that action could affect whether some or all of the property is treated as marital.

Using marital funds or labor to pay for, maintain or improve separate property can also create more complicated ownership questions. For example, if marital income is used to pay down the mortgage on a house one spouse owned before marriage, the other spouse may potentially acquire an interest in some of the property’s value or appreciation, depending on state law.

Common-Law (Equitable Distribution) vs. Community Property

To decide whether property is separate property or marital property, you have to consider whether your state is a common-law state or a community property state. Here’s an overview of the ins and outs of these general statutes:

Common-law property ownership: Common-law is also called equitable distribution. Most states are common-law states. If your name is on the deed to a piece of property, then you are the owner. If both spouses’ names are on the deed, they each own half-interest. But if there is no title document, you own it if you paid for it or if you received it as a gift.
Community property ownership: Laws in community property states are more complicated. In general, there are three classifications. If you owned property before your marriage, it is your separate property. The same is true if you were gifted or inherited property before or during your marriage. Otherwise, property is owned by both spouses. For example, a house or car bought during your marriage with your income is community property even if the deed or title is in one spouse’s name. If you inherit a house during your marriage, then it is your separate property. The same is true if you are gifted any item. It remains your separate property. Otherwise, everything is community property regardless of the deed or title. If you bring money in an account into a marriage, it is your property unless it becomes so co-mingled with the marital property that it becomes impossible to tell the difference.

There are a handful of community property states in the U.S. As of the time of this writing, they include Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin.

Bottom Line

A couple listing separate property for their divorce.

Separate property generally includes certain assets that belong to one spouse individually, such as property owned before marriage or gifts and inheritances received by one spouse. But an asset’s classification isn’t always permanent. Commingling separate and marital funds, changing how property is titled or using marital assets to contribute to separately owned property can potentially complicate its status. Because property laws vary by state and can affect divorce and estate planning differently, maintaining clear records and understanding how your state treats individually owned assets can be important. Prenuptial or postnuptial agreements, wills and trusts may also play a role in documenting how certain assets should be handled, subject to applicable law.

Financial Planning Tips

You may want to work with a financial advisor as you coordinate your marriage and estate plan. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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