What’s Yours May Be Not Be “Yours” in a Divorce: Separate Property vs. Marital Property

In the wake of a divorce, it is not uncommon for spouses to start claiming what is “their” individual property. However, simply “claiming” property as your own does not make it so. Property that a divorcing spouse thinks he or she independently owns–even pre-marital property–may very well be “marital” property subject to property division in Mississippi. In Mississippi divorce cases, one of the key determinations to be made is whether the property owned by the parties is “separate” property or “marital” property.

his hers ours.jpgAt common law, states treated property in a divorce as either “titled property” or “community property.” “Titled property” (or “separate property”) states maintained that property titled to, or legally owned by, an individual spouse, separate and apart from the marriage, was exempt from property division in a divorce. As a result, the titled spouse was able to wholly retain the property after the divorce. On the other hand, “community property” states treated all property owned by both spouses as part of the “community” or marriage. Consequently, regardless of which spouse held title to the property, the property owned by both spouses in community property states was generally subject to equal (50/50) division in a divorce. These two property division concepts are still prevalent in many states today. But, Mississippi is neither a true “titled property” state nor a true “community property” state. Instead, as mentioned in one of my early posts, Mississippi is known as an “equitable distribution” state, which could be seen as a mixture of the two property division doctrines.

Nevertheless, before any property can be distributed in a divorce, Mississippi courts must classify any and all property as “marital” property or “non-marital”/”separate” property. This is not always an easy task. As the Mississippi Supreme Court noted, “Property may not always be easily classified as either strictly marital or non-marital.” Craft v. Craft, 825 So. 2d 605, 609 (Miss. 2002). Accordingly, the classification of property in a divorce is often a heated point of contention in many divorce cases.

In Mississippi, marital property consists of all “assets accumulated or acquired during the marriage.” Byrd v. Byrd, 100 So. 3d 443, 447 (Miss. 2012) (citing Wheat v. Wheat, 37 So. 3d 632, 637 (Miss. 2010) (emphasis added). In fact, under Mississippi law, there is a presumption that all property acquired or accumulated during the marriage is in fact marital property. Hemsley v. Hemsley, 639 So. 2d 909, 915 (Miss. 1994). So, where there is a dispute regarding the classification of certain property as marital property in a divorce case, the party alleging that the property is separate property bears the burden of proving it. Id. at 914. And for purposes of defining “during the marriage,” Mississippi courts recognize that the marriage “runs until the date of the divorce judgment . . . [unless] an order for separate maintenance is entered,” then the marriage would technically end at the time separate maintenance, or a temporary order of support, is awarded to a spouse–before final judgment–and any property acquired afterward is not marital property. McIlwain v. McIlwain, 815 So. 2d 476, 479 (Miss. Ct. App. 2002) (citing Godwin v. Godwin, 758 So. 2d 384 (Miss.1999)).

On the other hand, “separate property” consists of assets attributable to one party’s separate estate prior to or outside the marriage. Craft, 825 So. 2d at 608. Simply put, separate property is any property not considered marital property. But, in some instances, even separate, non-marital property may be treated as martial property for purposes of divorce. There are two primary ways that Mississippi courts have consistently treated otherwise separate property as martial property in divorce: (1) commingling and (2) familial use. First, if a spouse’s separate property is “commingled” or mixed with marital property, it may be “converted” to marital property and be subject to property division. For example, if a spouse places his or separate funds into a joint bank account and those funds are mixed with marital funds that both spouses have access to and permission to use, then Mississippi courts will generally classify all funds in that bank account as marital property. Second, the “familial use” of a spouse’s separate property could convert it to marital property. For instance, a spouse’s pre-marital home may be converted to marital property if the home was used for the benefit of the marriage. In other words, if a married couple used or designated the husband’s pre-marital home as the marital home–where the couple lived together for a substantial amount of time during the marriage, raised their children, and each shared in the expense and chore of maintaining the home–the husband’s pre-marital home, or at least the appreciated value of it, may be considered marital property. See generally Gregg v. Gregg, 31 So. 3d 1277 (Miss Ct. App. 2010).

But what about property acquired partly outside the marriage and partly during the marriage? These situations often arise when classifying pensions or retirement benefits in divorce cases. When it comes to “hybrid” marital-separate property like pensions, Mississippi courts have held that, to the extent retirement funds have accumulated during the marriage, those funds are marital property subject to equitable distribution. Prescott v. Prescott, 736 So. 2d 409, 413 (Miss. Ct. App. 1999) (citing Selman v. Selman, 722 So. 2d 547, 553 (Miss. 1998)). In the Prescott case, the husband had worked for 32 years with a single employer prior to entering into the marriage, all the while collecting pension benefits. The husband and wife divorced after seven years of marriage, and the issue was raised whether the wife was entitled to the husband’s entire pension. The court held that only those pension benefits (property) earned during the seven-year marriage may be classified as marital property subject to equitable distribution.

In the end, classifying property in divorce cases can be a very difficult task. In all divorce cases, it is important to keep in mind that what one spouse may think is his or her own property could in fact be classified as marital property and subject to property division. Nonetheless, as with all divorce matters, it is in both parties’ best interest to employ an experienced divorce attorney when dealing with property division issues. As an experienced Mississippi divorce attorney, I can help you better understand what may happen with your property in a divorce. If you or a friend needs professional assistance in a divorce or any other family matter, please do not hesitate to contact the Law Office of M. Devin Whitt for a free consultation at (601) 607-5055.