Law...

Can Separate Property Become Marital Property Without a Gift?

The question whether separate property can "become" marital property arises most often in the context of homes and bank accounts.

Let's say Jessica and Hugh Candy have been married for 20 years. Hugh had bought and paid for the home before Jessica moved in. The home is titled in Hugh's name alone.

Hugh also had a "separate" bank account, which he had tapped for the kids' educations and for a vacation or two.

In some states' courts, both the home and the bank account will be found to be "marital" property, even though they were acquired separately, and there was no gift to the other spouse.

The legal term for this is "transmutation." Jessica will argue that the home and bank account have been "transmuted" from separate to marital property.

This argument is less likely to succeed in community property states (click here for the list). It has a greater chance of succeeding in an equitable distribution state.

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