Separate and Marital Property

By Molly Murphy

Attorney, Cordell & Cordell

Clients frequently ask me about the difference between separate and marital property.

Marital property is property acquired by either spouse during the period of the marriage, with several exceptions, which I will get into later in the article.

Separate property is property that has been acquired by gift, devise, bequest or descent.

The above definitions of marital and separate property are a good start in guiding a party to knowing how their property will be dealt with in a dissolution case.

 

What follows is a brief explanation of separate and marital property in the state I practice in, Missouri. This is not meant to cover every situation, and as each situation may produce a different outcome, you should speak with an attorney regarding how to proceed with your case.

Also, laws in your state may be different, so you should speak with an attorney licensed in your own state to determine whether this information may apply to your case. Throughout the article, I will be referencing Missouri’s Revised Statutes (RSMo).

The State of Missouri is considered a modified no-fault state in terms of filing for Dissolution of Marriage. This eliminates the requirements either party may to prove dates of separation or bad acts on the part of the other party.

The State of Missouri also offers to parties subject to dissolution specific guidelines as to the breakdown of property. Many states still adhere to the commingling of property, which turns all separation property used during a marriage into marital property.

Missouri offers parties the chance to prove to the Court that the separate property they brought into or received during the marriage to be set aside to them.

In 1974 Missouri dramatically changed its laws regarding dissolution actions. The law enacted that year set up our current Dissolution of Marriage statutes. In addition it granted Missouri courts jurisdiction to divide property between the parties. Prior to it was a race to the courthouse to partition the property in a civil action. The Court was given jurisdiction to determine the existence, character, value and ultimate ownership of property owned by a couple. Property could be divided into separate or marital property.

Marital property is property acquired by either spouse during the period of the marriage, with several exceptions.

Said exceptions include:  1. Property acquired by gift, devise, or descent; 2. Property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise, or descent; 3. Property acquired by a spouse after a decree of legal separation; 4. Property excluded by valid written agreement of the parties; and 5. The increase in value of property acquired prior to the marriage or pursuant to subdivisions (1) to (4) of this subsection, unless marital assets including labor, have contributed to such increases and then only to the extent of such contributions. (RSMo §452.330.2).

Separate property is property that has been acquired by gift, devise, bequest or descent.  Gifting can also include a gift by one party to another. A specific example of this is an engagement ring.

Separate property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by gift, bequest, devise or descent and property acquired after decree of legal separation is also separate.

As with other claimed separate property, the burden is on the party claiming the separate nature of the property to prove with clear, cogent and convincing evidence that the property was acquired in the manner described. Mere conclusory testimony of one party, without corroboration, will not satisfy the required threshold of proof. Reed v. Reed, 762 S.W.2d 78 (Mo. App. S.D. 1988).

Therefore, bare testimony should be considered the proof of last resort. Further separate property can be property excluded by valid written agreement such as a prenuptial agreement.

As a practical matter, the best way to prove that your property is separate is to provide a history of documentation. Paperwork is taken much more seriously by a Judge if property is in dispute, than a party’s word.

The above definitions of marital and separate property are a good start in guiding a party to knowing how their property will be dealt with in a dissolution case.

But what happens if a party uses separate funds to buy a marital asset? Or a separate piece of property begins to be funded by marital property? To show the transmutation (change) of separate property to marital property requires evidence of owner’s clear intent to contribute the property. Commingling is not enough.

A recent case in Missouri tells us that Wife’s contributions to Husband’s separate property did not transmute into marital property, but did support an equalization payment to Wife in proportion to her contribution. Wife was ordered slightly less than Husband of said asset.

When we review the Missouri law pertaining to marital and separate property, we find that Section 452.330 governs a trial court’s distribution and classification of marital and non-marital assets. That section requires that the trial court set aside to each party their non-marital property and divide the marital property equitably.

Generally, property owned by one spouse prior to the marriage will remain non-marital property and will be awarded to the owner of that property. Moreover, property which would otherwise be nonmarital property shall not become marital property solely because it may have become commingled with marital property.

Property acquired before the marriage and which remains titled in the name of the original owner is separate property unless the record shows that the owner intended to change the status of the property from separate to marital.

By contrast, if the owner intended to change the status of the property from separate to marital, it becomes marital. To transform the nature of the property from separate to marital, the party must be able to prove a clear intention to contribute to the community or to the other spouse must be demonstrated.

Courts must set aside a spouse’s separate property in dissolution cases, and property is deemed separate or marital based on the source of funds that financed the purchase.

If you have specific questions as to specific pieces of property always ask your attorney.  Please remember that if your Judgment and Order of Dissolution does not account for all property between the parties both known and unknown then it is not a formal order and is not subject to appeal or motions for contempt.

 

Margaret “Molly” P. Murphy is an Associate Attorney in the Arnold, Missouri office of Cordell & Cordell where she practices exclusively in the area of domestic relations. Ms. Murphy is admitted to practice law in the state of Missouri. Ms. Murphy was born and raised in St. Louis. She received her B.A. in Political Science and English Language and Literature in 1998 from the University of Tulsa where she graduated magna cum laude. Ms. Murphy received her Juris Doctor from the University of Missouri-Columbia in 2001.