Dealing with Pre-Marital Assets

The Divorce Code defines marital property as that acquired from the date of marriage through the date of separation. It may also include the increase in value of property earned prior to the marriage to the extent the increase occurs during the marriage. A popular example of this may be a retirement plan or savings account. With assets or property earned prior to the marriage, it is important to ascertain the value of that property as of the date of marriage to assign that portion to the party who owns it.

The court may determine that an asset that is technically outside the definition of marital property is still up for distribution. This is a possibility for long term marriages such that the longer you are married, the less likely you are able to successfully keep certain assets off the table as being pre-marital. For example, Bucks County has applied a vanishing credit for pre-marital assets. The separate nature of a pre-marital asset is reduced by 5% a year such that there is no longer a credit after 20 years and the entire asset is considered marital.

A prime example of a situation where this rule would be applicable is the purchase of a marital home. Say Spouse A contributed $40,000 of their pre-marital money to the purchase of the house. If the parties separated after 5 years, Spouse A can still claim 75% of the down payment. However, if the parties separate after 20 years, there is no credit back to Spouse A for that initial investment of pre-marital funds.

The rules on credit for individual or pre-marital property can vary county to county since it’s not a statute, but more or less a policy used by the respective Masters when looking at the marital estate in a divorce matter. It is a good idea to be careful about commingling any separate or non-marital property with marital property.

Click here to read more about division of property.