What Assets Are Untouchable in a Divorce?
Divorce involves many difficult decisions, and one of the biggest concerns is how to divide assets. Knowing which assets are off-limits during this process can help ease some worries, but it’s also important to remember that every divorce is different and must be treated as such.
That’s where we can help. The divorce attorneys at Pence Law Firm can look at your marriage, assets, debts, and other factors in your divorce to help you understand potential outcomes. Call us at 304-345-7250 to get started.
Personal Belongings
Personal belongings in a divorce are items one spouse exclusively owns and uses. Common examples include clothing, personal hygiene items, and personal electronics. These items are usually seen as separate property, meaning they are not subject to division between spouses.
While most personal belongings are off-limits, valuable items like jewelry or art can be treated differently. If an expensive piece of jewelry was a gift specifically to one spouse, it might remain untouchable. However, its treatment can vary based on its use and the specifics of the situation.
Gifts and Inheritances
Gifts and inheritances occupy a unique space in divorce proceedings. Generally, gifts given to one spouse and inheritances received by one spouse are considered separate property, making them untouchable in the asset division process. These items remain with the original recipient, provided there is no evidence that they were intended to be shared with the spouse.
For example, a family heirloom passed down to one spouse would typically remain their property. However, if the asset was commingled with marital property, it might lose its separate status, becoming a subject for division.
Premarital Assets
Premarital assets include properties and belongings acquired before the marriage. These assets are typically seen as separate property and remain untouchable during a divorce. Examples might be savings accounts, real estate, or personal items owned before tying the knot. To keep these assets protected, it’s crucial not to mix them with marital assets. For instance, if you had a savings account before marriage, avoid depositing marital funds into it. Commingling assets can lead to everything involved being considered marital property.
Assets Protected by Prenuptial Agreements
Prenuptial agreements are legal documents that couples sign before getting married. These agreements spell out how assets will be divided if the marriage ends. They are particularly useful for protecting assets like property, investments, or businesses.
When you have a prenuptial agreement, it can clearly define which items are considered separate property and therefore not subject to division during a divorce. This means that any assets listed in the prenuptial agreement will stay with the original owner, as long as the agreement is valid. To be effective, the agreement must be written clearly and signed by both parties. If done correctly, a prenuptial agreement can provide peace of mind and ensure that your assets are protected.
Postnuptial agreements can also specify which assets are not to be touched during divorce. While postnuptial agreements are much less common than prenuptial agreements, they can be useful. For example, if one spouse is unfaithful or causes significant financial distress to their partner, their partner may demand a postnuptial agreement as a condition of giving them a second chance.
Steps to Protect Assets During Divorce
Safeguarding assets during a divorce is an important part of setting yourself up for financial stability. One of the most effective steps is to maintain clear records of ownership and the origins of assets. This documentation is essential in distinguishing between marital and separate property. Consulting with a qualified lawyer who specializes in divorce can provide invaluable guidance and help you navigate the complexities of asset protection. Legal advice can ensure that you are fully aware of your rights and the best ways to secure your financial future.
Finally, don’t make the mistake of attempting to hide assets that you’re afraid will be subject to division. This can severely harm your divorce case and cause the judge to order a division of assets that essentially punishes you for your egregious behavior. Keep everything above board.
Can Future Inheritance Be Included in Divorce Settlements?
Marital Property and Separate Property
In West Virginia, when a couple divorces, the court divides all property into one of two categories: marital property or separate property. This classification is a first step in the process of fair property division. Marital property includes all assets and debts acquired by either spouse during the marriage. These are things like income, the family home, and retirement accounts. This type of property is subject to distribution between the spouses.
Separate property, on the other hand, is generally not subject to division. This includes property owned by one spouse before the marriage. It also includes individual gifts and inheritances that were received by one person alone during the marriage. If an inheritance is received, and it is kept entirely separate from marital assets, it will likely remain the property of the person who received it.
The Uncertainty of a Future Inheritance
The legal system views a “future” inheritance differently from one that has already been received. A future inheritance is not a guarantee. The person who is expected to leave the inheritance can change their will at any time. They can also spend down their assets or face unexpected financial changes before their death. Because of this lack of certainty, a future inheritance is considered an expectancy, not a current asset.
Why Future Inheritance Is Not Divided
For a court to divide an asset in a divorce, it must be part of the marital estate. Since a future inheritance is not a current asset and is not yet a part of a person’s property, it cannot be classified as either marital or separate property. The court cannot divide something that does not yet legally exist or belong to a party in the divorce. As such, a future inheritance is generally not included in a West Virginia divorce settlement. The court cannot order one spouse to give the other a share of money they may or may not receive someday.
Exceptions and Other Considerations
While a future inheritance is not divided, it might play a role in a different part of the divorce case, such as with spousal support. If a person with a significant and certain future inheritance is receiving spousal support from their ex-spouse, the court may consider this future financial resource when determining if the support should be reduced or ended. This is a rare occurrence, however, and usually only happens when the inheritance is substantial and the person who is leaving it is near death.
Another important point is that an inheritance that has already been received can be treated differently if it is “commingled.” Commingling happens when separate inherited assets are mixed with marital assets. For example, if a spouse inherits money and puts it into a joint bank account that is used for family expenses, the court may then consider that money to be marital property subject to division.
How Does Home Appraisal for Divorce Settlement Work in West Virginia?
In West Virginia, a divorce requires the fair distribution of marital assets, which often includes the family home. Because real estate is typically a couple’s most significant asset, determining its accurate monetary value is essential for achieving an equitable settlement. This valuation is accomplished through a specialized process known as a divorce appraisal.
Understanding West Virginia’s Equitable Distribution Law
West Virginia operates under the principle of equitable distribution for dividing marital property. This means the court divides assets in a way that is fair, though not necessarily a strict 50/50 split. The goal is to reach a just outcome by considering each spouse’s contributions, both monetary (like income) and non-monetary (like homemaker services or child care), to the marriage and the property’s value.
For the marital home to be divided fairly, its net value (fair market value minus any existing mortgage or liens) must be established. The appraisal serves as the unbiased, objective evidence of this value that both parties, their attorneys, and the court can rely upon.
Step 1: Classification and Timing
Before an appraisal is ordered, the house must be classified as marital property—meaning it was acquired or increased in value during the marriage. Even if a house was owned before the marriage (separate property), any increase in value due to the use of marital funds (e.g., joint mortgage payments, renovations) or marital effort (e.g., sweat equity by one spouse) can be considered marital property subject to division.
The effective date of the appraisal is often critical. While some appraisals reflect the property’s current value, courts may specify a different date, such as the date of separation or the date the divorce was filed, to accurately determine the marital estate’s value at a specific point in time. The appraiser must be instructed to use this specific “effective date” in their analysis.
Step 2: Selecting and Preparing for the Appraiser
Divorce appraisals require a licensed, certified real estate appraiser who serves as a neutral, third-party expert. It is highly recommended to choose an appraiser who is experienced in divorce cases, as they understand the legal requirements for providing a defensible valuation in court.
In an amicable divorce, the spouses may agree on a single appraiser, often splitting the cost. In contested cases, each party might hire its own appraiser, and if the two valuations differ significantly, the average may be taken, or a third appraiser may be called upon by the court or a mediator.
To prepare the home for the appraisal, both parties should ensure the property is clean and clutter-free, allowing the appraiser full access. All documentation regarding recent improvements, renovations, and upgrades should be gathered, as this information can significantly impact the final valuation.
Step 3: The Appraisal Process and Methodology
The appraisal process is similar to a standard mortgage appraisal but has a different objective—determining the Fair Market Value for asset division, not for a lender. The appraiser will conduct a thorough, in-person inspection of the interior and exterior of the property, taking measurements and photographs and noting the home’s overall condition, features, and any needed repairs.
The main valuation technique used is the Sales Comparison Approach. This involves researching and analyzing the recent sales of comparable properties (known as “comps”) in the surrounding area. The appraiser makes adjustments based on differences between the subject property and the comps (e.g., condition, square footage, number of bedrooms/bathrooms, lot size, amenities). This comprehensive analysis leads to the final, unbiased valuation.
Step 4: The Valuation Report and Legal Use
Upon completing their analysis, the appraiser generates a detailed, formal report. This document explains the methodology used, presents the comparable sales data, and clearly states the final Fair Market Value (FMV) conclusion for the property as of the effective date.
This valuation report then becomes the foundation for negotiating the property settlement. There are generally two primary outcomes for the marital home:
- Buyout: One spouse keeps the home and refinances or pays the other spouse their share of the equity (FMV minus the mortgage, divided by the percentage share). The appraisal dictates the amount of the buyout.
- Sale: The home is sold, and the net proceeds (after paying the mortgage, closing costs, and seller’s fees) are divided between the spouses according to the court-ordered equitable distribution.
If the spouses cannot agree on the appraised value or the method of division, the valuation report and the appraiser (who may serve as an expert witness) will be presented to the West Virginia Family Court, which will make the final, binding determination. It is essential that the report meets all professional and legal standards to withstand scrutiny during negotiation or litigation.
In West Virginia, a divorce requires the fair distribution of marital assets, which often includes the family home. Because real estate is typically a couple’s most significant asset, determining its accurate monetary value is essential for achieving an equitable settlement. This valuation is accomplished through a specialized process known as a divorce appraisal.
Understanding West Virginia’s Equitable Distribution Law
West Virginia operates under the principle of equitable distribution for dividing marital property. This means the court divides assets in a way that is fair, though not necessarily a strict 50/50 split. The goal is to reach a just outcome by considering each spouse’s contributions, both monetary (like income) and non-monetary (like homemaker services or child care), to the marriage and the property’s value.
For the marital home to be divided fairly, its net value (fair market value minus any existing mortgage or liens) must be established. The appraisal serves as the unbiased, objective evidence of this value that both parties, their attorneys, and the court can rely upon.
Step 1: Classification and Timing
Before an appraisal is ordered, the house must be classified as marital property—meaning it was acquired or increased in value during the marriage. Even if a house was owned before the marriage (separate property), any increase in value due to the use of marital funds (e.g., joint mortgage payments, renovations) or marital effort (e.g., sweat equity by one spouse) can be considered marital property subject to division.
The effective date of the appraisal is often critical. While some appraisals reflect the property’s current value, courts may specify a different date, such as the date of separation or the date the divorce was filed, to accurately determine the marital estate’s value at a specific point in time. The appraiser must be instructed to use this specific “effective date” in their analysis.
Step 2: Selecting and Preparing for the Appraiser
Divorce appraisals require a licensed, certified real estate appraiser who serves as a neutral, third-party expert. It is highly recommended to choose an appraiser who is experienced in divorce cases, as they understand the legal requirements for providing a defensible valuation in court.
In an amicable divorce, the spouses may agree on a single appraiser, often splitting the cost. In contested cases, each party might hire its own appraiser, and if the two valuations differ significantly, the average may be taken, or a third appraiser may be called upon by the court or a mediator.
To prepare the home for the appraisal, both parties should ensure the property is clean and clutter-free, allowing the appraiser full access. All documentation regarding recent improvements, renovations, and upgrades should be gathered, as this information can significantly impact the final valuation.
Step 3: The Appraisal Process and Methodology
The appraisal process is similar to a standard mortgage appraisal but has a different objective—determining the Fair Market Value for asset division, not for a lender. The appraiser will conduct a thorough, in-person inspection of the interior and exterior of the property, taking measurements and photographs and noting the home’s overall condition, features, and any needed repairs.
The main valuation technique used is the Sales Comparison Approach. This involves researching and analyzing the recent sales of comparable properties (known as “comps”) in the surrounding area. The appraiser makes adjustments based on differences between the subject property and the comps (e.g., condition, square footage, number of bedrooms/bathrooms, lot size, amenities). This comprehensive analysis leads to the final, unbiased valuation.
Step 4: The Valuation Report and Legal Use
Upon completing their analysis, the appraiser generates a detailed, formal report. This document explains the methodology used, presents the comparable sales data, and clearly states the final Fair Market Value (FMV) conclusion for the property as of the effective date.
This valuation report then becomes the foundation for negotiating the property settlement. There are generally two primary outcomes for the marital home:
- Buyout: One spouse keeps the home and refinances or pays the other spouse their share of the equity (FMV minus the mortgage, divided by the percentage share). The appraisal dictates the amount of the buyout.
- Sale: The home is sold, and the net proceeds (after paying the mortgage, closing costs, and seller’s fees) are divided between the spouses according to the court-ordered equitable distribution.
If the spouses cannot agree on the appraised value or the method of division, the valuation report and the appraiser (who may serve as an expert witness) will be presented to the West Virginia Family Court, which will make the final, binding determination. It is essential that the report meets all professional and legal standards to withstand scrutiny during negotiation or litigation.
FAQ: West Virginia Divorce Bank Account Questions
What Is Marital Property in West Virginia?
In West Virginia, when you get a divorce, all of your property is divided into one of two categories: marital property or separate property. Marital property includes all assets acquired by either spouse during the marriage, regardless of whose name is on the title or account.
This includes income, real estate, vehicles, retirement accounts, and bank accounts. The goal in a West Virginia divorce is to divide marital property fairly, which is known as equitable distribution. This principle means the division is designed to be just and equitable, but not necessarily an equal 50/50 split. The court will consider a variety of factors to achieve a fair outcome.
Separate property, on the other hand, consists of assets that belong to one spouse individually. This includes any property that a person owned before the marriage, as well as any gifts or inheritances received by one spouse alone during the marriage. As a general rule, separate property is not subject to division in a divorce. However, it’s important to understand how funds can change from one category to another.
How Are Bank Accounts Classified in a Divorce?
The classification of bank accounts in a West Virginia divorce depends on when the account was opened and what kind of money was deposited into it. An account opened during the marriage, and funded with income earned during the marriage, is almost always considered marital property. This is true whether the account is held jointly in both spouses’ names or individually in just one spouse’s name. The key factor is the source of the funds, not the name on the account.
For example, if you and your spouse each have your own separate checking accounts, but you both deposit your paychecks into these accounts and use them to pay for shared household expenses, the funds are considered marital property. A judge will look at the origin of the money and how it was used to determine its classification. The name on the account is not the final word.
What Is Commingling and Why Is It Important?
Commingling is the act of mixing separate property with marital property. This can be a significant issue in divorce cases because when funds are commingled, the separate property can lose its individual status and be reclassified as marital property subject to division.
A common example of this involves an inheritance.
Let’s say one spouse inherits a sum of money from a family member. By law, that inheritance is initially considered separate property. However, if that spouse deposits the inherited money into a joint bank account that is used for day-to-day household expenses, the funds may become commingled.
When this happens, it can be very difficult to trace the separate funds. A court may then consider the entire account, including the inherited money, to be marital property.
To avoid commingling, it is generally recommended to keep separate funds in a separate account and to only use that account for individual expenses. If separate funds are used to pay for a marital asset, like a down payment on a house, it can also complicate the classification of that asset during the divorce.
What Happens to a Joint Bank Account During a Divorce?
Joint bank accounts are a straightforward example of marital property. Funds in these accounts are presumed to belong to both spouses equally, regardless of who contributed more to the balance. It is important to remember that during a divorce, the court may issue temporary orders about how joint accounts can be used to prevent one party from taking all the money or from engaging in financial misconduct.
Because both parties have access to a joint account, it is not uncommon for one spouse to withdraw a large sum of money from it in the early stages of a divorce. In West Virginia, a judge can consider financial misconduct or the dissipation of assets when dividing property.
If one spouse withdraws a large sum of money from a joint account without a valid reason, they may be required to pay that money back to the marital estate or have the amount deducted from their share of other marital assets.
What About Accounts Opened Before the Marriage?
An account you owned before you were married is considered your separate property. However, if you add your spouse’s name to the account or begin depositing marital funds into it, the account and its funds can become commingled. At that point, a court may reclassify the account as marital property.
Let’s imagine you had a savings account with a significant balance before you were married. During the marriage, you continue to use this account to deposit a portion of your income, which is marital property.
Even if you maintain the account for your personal use, the commingling of funds can make the entire balance subject to division. The original balance from before the marriage could be considered separate, but the new funds deposited during the marriage are not. It can be challenging and sometimes requires significant effort to trace which funds were separate and which were marital.
How Is Financial Information Verified?
In a West Virginia divorce, both parties are required to provide a detailed financial statement, which is a sworn document that provides a complete picture of their financial situation. This includes disclosing information about all bank accounts, retirement accounts, investments, and debts.
To verify this information, spouses must provide supporting documents, such as copies of their three most recent pay stubs, tax returns from the previous two years, and other financial records.
The purpose of this process is to ensure full transparency and provide an accurate and truthful representation of the marital estate. If a spouse is suspected of hiding or improperly transferring funds, a court can order them to provide additional financial records. Engaging in financial misconduct can have serious consequences and may result in the court awarding a greater share of the marital estate to the other party.
What Are the Next Steps for My Bank Accounts?
If you are beginning a divorce, it is important to think carefully about how you manage your finances. While it may be tempting to close accounts or withdraw funds, it is generally not advised to make any large financial changes without an understanding of the potential consequences.
Maintaining a clear record of all financial transactions is beneficial. This includes keeping statements for all bank accounts, as well as any records of separate property you wish to protect. Being transparent and organized with your finances from the start can help make the divorce process smoother and less contentious, particularly when it comes to dividing assets. Understanding the difference between marital and separate property is a good first step to help you protect your interests.
Choose Pence Law Firm for Your Divorce Case
The team at Pence Law Firm is ready and waiting to discuss the next steps in your divorce. Schedule your consultation now by calling 304-345-7250 or contacting us online.
