When going through the divorce process, you likely have a lot of concerns about your assets. What do you get to keep, and what could you potentially lose?
Understanding the classification of assets can help you figure this out.
What is separate property?
As The Business Professor states, assets in divorce end up divided into two categories: separate and community.
Separate property includes the assets that you had before the marriage, gifts given to you directly, inheritance, and other similar things.
Typically speaking, you get to keep your separate assets without risk of them going to your spouse. In some cases, however, separate property might become community property.
For example, say you deposited inheritance money into a joint account. Once the money is in the account, it becomes joint property. Thus, it is community property and subject to division despite the initial deposit being separate property.
What is community property?
As for community property, these are the assets that get divided during the divorce. These assets belong to both you and your spouse. This typically includes homes, cars, land parcels and more.
Anything purchased with a joint bank account may fall into this category, even if one spouse used it more often. Likewise, anything signed in the names of both you and your spouse counts as community property even if you are the only one who paid for it.
By understanding these categories of asset division and where certain assets may go, you can enter the asset-dividing process in divorce with a little less stress.