Marital property generally refers to assets and debts either spouse acquired during the marriage, regardless of whose name is on the title, and it is generally what gets divided when a marriage ends. Separate property generally refers to what a spouse owned before the marriage, or received individually during the marriage through gift or inheritance, and it is generally not divided, unless it has become so mixed with marital funds or assets that it can no longer be clearly traced. The exact rules for classifying and dividing property vary by state.
What typically counts as marital property
Income earned during the marriage, property purchased with that income, retirement contributions made during the marriage, and increases in value that resulted from either spouse's efforts during the marriage are generally treated as marital property, even if only one spouse's name appears on an account or title.
What typically counts as separate property
Property owned before the marriage, along with gifts or inheritances received by one spouse alone during the marriage, is generally treated as separate property. Passive growth in the value of that property, meaning growth that did not result from either spouse's active efforts, is also often treated as separate.
Why commingling complicates the picture
Separate property does not automatically stay separate. If separate funds are mixed into a joint account, or a separate asset is improved or maintained using marital funds or effort, tracing exactly what remains separate can become difficult, and property that cannot be clearly traced back to a separate source is often treated as marital property instead.
Two general approaches to dividing marital property
States generally follow one of two broad approaches to dividing marital property. A small number treat marital property as owned equally by both spouses and divide it accordingly, while most others divide marital property based on what a court considers fair under the circumstances, which does not necessarily mean an equal split. Which approach applies, and how it plays out for specific assets, depends on the state.
Why this distinction is worth sorting out early
Because classification as marital or separate can determine whether an asset is divided at all, and because commingling can shift that classification, sorting out which assets fall into which category early in a case tends to matter more than it might initially seem. A licensed family law attorney can review specific assets and financial history to assess how they are likely to be classified.