§ 6.07 Property Acquired Before Marriage and After Divorce
| Jurisdiction | United States |
| Publication year | 2021 |
§ 6.07 Property Acquired Before Marriage and After Divorce
[1]—Premarital Acquisitions
Most states generally define marital as property "acquired" by either spouse "subsequent to the marriage."243 Property "acquired" before the marriage is therefore separate property.244 It frequently is easy to determine when property is "acquired." Sometimes, however, the date of acquisition is more difficult to determine.245
Some courts have classified certain premarital acquisitions as marital property when the parties intended to use the property during marriage.246 This can only be called bizarre classification procedure. The parties' intended use of the property has nothing to do with its classification. The consideration given dictates its character. The character of the property can only then be changed by a later gift or contribution of marital funds.247
Of course, many states would permit a separate claim arising from premarital cohabitation.248 A Virginia court concluded that, under its divorce law, a divorce court may consider either spouse's premarital contributions to marital property, if those contributions affected the value of the property.249
Some rights in existence at marriage are considered so transformed during marriage that they become marital property. For example, in one case, at marriage a wife possessed a contingent right to receive trust income.250 This right vested during marriage. This vested right was considered different from the contingent right, so the income was marital property.
A California case involved a lease signed by the husband before marriage, but was renewed by him during marriage.251 The court considered the renewal as merely an extension of the prior lease, and the extended lease was considered the husband's separate property because the lease was originally acquired prior to marriage.
A different issue of this type was presented in another California case in which the husband earned education benefits through military service prior to marriage.252 Although some of the benefits were paid during marriage, they were considered separate property because the benefits were earned through pre-marriage labor.
In an Arkansas case, the wife purchased insurance on her son's life before marriage and the son died before marriage.253 The court deemed the proceeds as the wife's separate property, even though they were received during marriage.
In a kitchen sink state, of course, a court may divide premarital acquisitions.254
[2]—Acquisitions After Divorce
As a general rule marital property includes only that property "acquired" during marriage. Property acquired after divorce is separate property. However, the time of acquisition is not always clear. A simple example is the normal house purchase. Is the time of acquisition the closing date, the time the note is paid in full, or some other time?255
Annual bonuses present this issue. If the spouses divorce after the end of the calendar year but before the spouse received the bonus, the bonus is considered acquired during marriage because it was earned by services rendered during marriage.256
Courts have held that commissions earned by a spouse during marriage that were to be paid after divorce are marital property.257
A spouse can, during marriage, acquire a right to receive certain payments which are not received until after divorce. To the extent that marital assets (or efforts) are used to acquire the right, the payments should be deemed marital property, regardless of when the payment is to be received. For example, if a spouse buys a winning lottery ticket during marriage with marital funds, thereby acquiring the right to receive annual lottery payments after divorce, the lottery payments are marital property.258 This rule only applies if marital funds are used to buy the ticket, of course; if the ticket is purchased with separate property, the post-divorce payments should be separate.259 Some situations are less clear, however. For example, a spouse might sign a contract during marriage entitling him or her to receive payments after divorce, but requiring that post-divorce services be rendered. For true longterm employment agreements, courts generally do not include post-divorce payments in the marital estate; they are treated as post-divorce wages.260 In some situations, the significance of the post-divorce services is less clear, and courts have to determine whether the contract is truly a contract for post-divorce services.261
Property owned by a spouse at the time of divorce can be exchanged for something else after divorce. If the other spouse has an interest in the property exchanged, this presents the issue of whether the spouse's claim continues in the...
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