What is marital property and what is non-marital or pre-marital property in a Georgia divorce and why is it so important?
In general, property is martial if it was paid for from money earned during the marriage; and assets are non-marital if the asset was paid for or acquired by money that was earned prior to marriage, or that was inherited, or that was gifted.
Marital property is subject to equitable division in a Georgia divorce. Non-marital property is not subject to equitable division in a Georgia divorce. It is a very big issue. Some assets can be both part “marital’ and part “non-marital” and there are special rules in Georgia divorce law to deal with assets like these (as an example, if a house was bought prior to marriage, but the mortgage was paid off during the marriage, and the house also appreciated because of the value of homes increasing in general, how do you determine which part of the mortgage pay down is marital and non-marital? How do you allocate which portion of the appreciation in the property is marital or non-marital?
Some of these questions are simple, such as if you bought a car prior to marriage, paid the car off prior to marriage, and you still own the car, that is your non-marital property; or if you funded your 401k retirement account with money from employment during your marriage, this will be marital property and subject to equitable division in a Georgia divorce.
Some issues are not so easy. What if you bought a home prior to marriage, with $100,000 in equity, and after marriage you transfer title to yourself and your wife jointly, do you lose that $100,000 in non-marital equity? (In many cases, yes.) The answer can be different however, if instead of transferring title to your wife to joint names, you instead simply buy the house together in joint names. The nuances often matter.
What if you earned stock options prior to marriage, but the stock options only vested after marriage, does your husband have a marital interest in the stock options you worked so hard to earn prior to marriage? (In general, no, but it will depend on the specific circumstances of the case)
One case Shaw Law PC had involved a $50,000 gift the wife’s father made to his daughter and the husband. He told his daughter to use her $25,000 as a down payment on the martial home, and told his son-in-law to use his $25,000 to pay for the wedding. Come the parties’ divorce, the wife still had her $25,000 non-marital interest in the home (because the $25,000 gift from her father was non-marital property), but her husband had nothing left (because the non-marital $25,000 gift he received was spent on the wedding, which had no monetary value).
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Scott Shaw is founder and principle of Shaw Law Firm PC, founded in 1995 and dedicated solely to divorce, family law and child custody matters that must be addressed and decided in the state of Georgia. Shaw Law Firm serves the greater Metro Atlanta area, particularly the counties of Fulton, Gwinnett, Cobb, Cherokee, Forsyth, Paulding, Henry, Fayette, Coweta, Newton, Walton, Bartow and Douglas. Schedule a consultation today at 770-594-8309.