Marital Property vs. Separate Property: Facts You Should Know

Education & Training with Jody Bruns, LLC NMLS 831033

It's great getting new clients - whether selling a new home or closing a new loan. Sometimes we don't realize how our hand in a transaction plays into other facets of our client's circumstances. 


Take Marital Property vs. Separate Property for instance.


Generally, there are three basic questions divorcing clients ask when deciding to get a divorce:

1. What is our propety?

2. What is it worth?

3. How are we going to divide it?


After answering these three questions, the obvious first step is to determine what portion of the equity is marital and what is non-marital. State laws vary broadly on this issue. Some state, primarily those that we call equitable property states, include in their statues categories of assets that are not divided in a divorce. Property must be identified as marital or non-marital before distributing in a divorce proceeding.


What's the difference?


Separate property is primarly any asset acquired before the marriage. The two most common forms of non-marital property are those acquired by:


1. Acquired by gift, legacy, or descent prior to or during the marriage and,

2. Before the marriage and not transferred into co-ownership with a spouse.


Marital property is primarily all property acquired during the marriage. In some states the increase in value of separate property is considered marital property as well.


So, how does this come into play with you as a real estate professional and why should you know the difference?


I am currently working with a client who is going through a divorce. Two years ago, this same client went to a real estate professional and said she is planning to get a divorce in the near future and wanted to buy a new home in the meantime to live in. 


The real estate professional gladly found her a home to purchase and it closed right on time. Now, two years later in a market where properties are appreciating at a fast pace, she is being forced to sel the home and give her soon-to-be ex-husband his share of the equity.


Why is she being forced to sell the home and pay her ex-husband? The real estate agent had no understanding of separate property vs. marital property and the consequences a potential divorce would have on her client's new home.


She is being forced to sell the home and pay her ex-husband his share of the equity because when she purchase the home she was still married and the new home is considered marital property in the state of Colorado. (Additionally, so is all of the new furnishings purchased to furnish the home!)


This is by far one of the simplest examples, but one we can all really understand, as to how our industry as either a real estate professional or a mortgage professional is directly connected to family law.


If you would like additional information on the divorce market and how it affects your business as a real estate professional, you can download a free preview of "The Divorce Niche: A Look Inside the Divorce Real Estate & Mortgage Market."



Posted by

Niche Marketing for Real Estate & Mortgage Professionals


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Real Estate Best Practices
Colorado Denver County
divorce real estate
marital property
separate property
jody bruns

Spam prevention
Show All Comments
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Hi Jody Bruns, CDLP 

This is a great "cautionary tale" and highlights the need to seek legal counsel and/or consult with someone who understands these things, such as yourself, in order to avoid "disaster".

We wish you great success with your blog posts and networking with other members of Active Rain!

We clicked the “Follow” button on your profile so that we will be alerted to your future blog posts and can read and comment on them, and we invite you to "follow us" - should you be interested - by clicking the “Follow” button you see underneath our photo to the left. There is no requirement or obligation for you to do so, but we would be honored if you choose to do so!

Jul 16, 2016 12:45 AM #1
Jody Bruns, CDLP
Jody Bruns, LLC - Aurora, CO
Niche Marketing Expert in Real Estate & Mortgage

Thanks, Tony and Suzanne!

Jul 18, 2016 01:55 AM #2
Winston Heverly
Winston Realty, Inc. - Atlantis, FL

A super post loaded with good info, glad I came across it in the archives.

Aug 05, 2016 12:31 PM #3
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Jody Bruns, CDLP

Niche Marketing Expert in Real Estate & Mortgage
Ask me a question