Normalizing conversations about property division and income sharing (and, of course, quantifying its effect with the use of analysis and reports) can help reduce clients’ anxiety.
However, all that planning, preparation, and progress can be emphatically stalled or derailed by two words: separate property.
Every state recognizes some form of separate property. It often takes the form of assets or property acquired prior to marriage or an inheritance; the 401(k) or pension started prior to marriage, the downpayment for the newlyweds’ home that came from the sale of the former single-life home, a bequest or inherited IRA.
Most newly married couples are not contemplating what happens with these assets should they get a divorce down the road. Many couples do not think about “your stuff” and “my stuff” as they struggle to strive and start a family (or not), and it can come as a shock when one spouse declares they want to have it recognized and treated as separate property.
As with many aspects of divorce, there can be black and white clarity, or every shade of gray ambiguity. If the property checks all the boxes and the characterization is clearly separate, it will usually be easier for the other spouse to accept in time. It may be necessary for us to provide the reports and analysis to (hopefully) demonstrate the spouse now receiving less is still going to be financially secure. Divorce coaches and psychotherapists may be helpful referrals to make in this situation, and a consulting attorney is always a role to recommend.
If the property does not check all the boxes, comingling has occurred, or information to demonstrate characterization as separate is unavailable, the interspousal dynamics may be very challenged. It might feel like a betrayal, and of course the subjective sense of “fairness” is unbalanced.
What matters most to a mediated settlement is that the clients come to an agreement, which can occur in several different ways: genuine acceptance, compromise, or exploring alternative scenarios.
By understanding the complexities of separate property, practicing effective communication, and exploring various strategies, we can enable our clients make those decisions and move forward.
Source = IDFA