What Assets Are Protected From Divorce Settlements?

Written by brittany bradford | 13/05/2017

In divorce law in the United States, grounds for asset division on the termination of a marriage can rest upon one of two legal bases, depending on the state: community property or equitable distribution. Community property regards all assets obtained by either spouse after marriage as belonging equally to both, while equitable distribution takes into account the financial opportunities and hardships of each spouse when dividing property. Since divorce laws vary widely from state to state and at the judge's discretion, only possessions that legally qualify as separate property according to each state's definition are absolutely safe from divorce settlements. The following assets are almost always classified as separate property.

Assets Acquired Before Marriage

Any property that one spouse obtained before the couple's official date of marriage will be excluded from asset division. For example, engagement rings are the sole property of the recipient, as are any other gifts received from either spouse before the wedding date.

Major Assets Singly-Owned

Automobiles, houses, and other major purchases that are not jointly owned and jointly insured will be considered the property of the owner on the contract. However, payments that were made after marriage using both spouses' money may be proportionally reimbursed to the non-owning partner.

Assets Received Through Inheritance or Gifting

Real estate and tangible property inherited by one spouse through a legally valid document will be set aside from the divorce proceedings, as will any property received that falls under the legal definition of a gift.

Earnings After Separation

Any wages earned by either spouse after their date of their marriage separation is solely the property of each spouse. States determine the separation date differently, ranging from the day that the couple decides to end their marriage to the day one spouse permanently leaves the shared home.

Court-Ordered Injury Payments

Any income that one spouse gains from pain and suffering awards from a court proceeding are legally the sole property of the recipient of the money and cannot be divided or taken by a divorce settlement.

Pension and Retirement Benefits Before Marriage

The portion of any pension plans, 401k plans, and any other deferred compensation that originates from a spouse's place of work that was earned before the date of marriage will be considered separate property belonging to each spouse who earned the benefits. However, after marriage, any retirement earnings accrued will be jointly owned, and eligible for asset redistribution during the divorce proceedings.

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