Is marriage on your immediate horizon? If so, it’s important to start your journey on the right foot by being prepared and planning ahead, in the event your marriage ends up in a divorce. From a financial standpoint, it is crucial that you practice good record-keeping for any of your premarital property and post-marital appreciation on that property. In Ohio, having access to documentation and records of your separate property can be vital to protecting your premarital assets and property during the termination of marriage proceedings.
While most couples don’t typically contemplate a potential divorce when they embark on a new marriage, consulting an experienced domestic relations attorney is always a good idea, especially given that Ohio’s divorce rate in 2023 amounted to 2.4 divorces per 1,000 people living in the Ohio, according to the Centers for Disease Control.1 Sure, valid and enforceable prenuptial agreements are great tools to protect your property prior to entering into a marriage, but, even with or without a prenuptial agreement, it is always safe practice to maintain good record-keeping regarding your assets as further discussed below.
In divorce cases, Ohio Domestic Relations Courts are tasked with first ascertaining what property is marital and what property, if any, is one spouse’s separate property. Ohio is an equitable distribution state, which means Ohio Domestic Relations Courts divide marital property fairly or equitably between the parties. However, if one party brings property or assets into the marriage, that party may assert that this property is separate property, that remains with that party in the event of a divorce. A party seeking to retain his or her “separate property” in a divorce proceeding may do so – only if that party can prove that it is has remained separate and not marital property, as further discussed below.
In the State of Ohio, a party’s “separate property” is defined as all real and personal property and any interest in real or personal property that is found by the Court to be any of the following:
(i) An inheritance by one spouse by bequest, devise, or descent during the course of the marriage;
(ii) Any real or personal property or interest in real or personal property that was acquired by one spouse prior to the date of the marriage;
(iii) Passive income and appreciation acquired from separate property by one spouse during the marriage;
(iv) Any real or personal property or interest in real or personal property acquired by one spouse after a decree of legal separation issued under section 3105.17 of the Revised Code;
(v) Any real or personal property or interest in real or personal property that is excluded by a valid antenuptial or postnuptial agreement;
(vi) Compensation to a spouse for the spouse's personal injury, except for loss of marital earnings and compensation for expenses paid from marital assets;
(vii) Any gift of any real or personal property or of an interest in real or personal property that is made after the date of the marriage and that is proven by clear and convincing evidence to have been given to only one spouse.
See R.C. § 3105.171(A)(6). Conceptually, Ohio’s separate property law makes sense – when one party receives an inheritance, or walks into the marriage with property which that spouse owned prior to the marriage like a vehicle or a home, it is understandable why Ohio Courts treat this property as the separate property of one spouse.
While this may sound simple, it’s often more involved than most people think – the spouse asserting his or her separate property interest(s) has the burden to prove it. Unfortunately, as the old adage goes – this can be easier said than done.
Ohio Revised Code § 3105.171(A)(6)(b) explicitly provides that the commingling of a spouse’s separate property with other property of any type “does not destroy the identity of the separate property as separate property, except when the separate property is not traceable.” R.C. 3105.171(A)(6)(b) (emphasis added).
For example, when a husband or wife takes his or her premarital property and commingles it with marital property, that spouse’s premarital property may lose its “separate property” identity, and be converted to “marital property.” As a result, if and when the husband and wife ultimately divorce, this “separate” and “premarital property” that was commingled and turned into marital property will now be divided between BOTH parties, as opposed to the property remaining solely with one spouse – again, if it is not traceable.
Another example of an Ohio Court potentially finding a “commingling” of “separate property” would be if a wife took premarital money, deposited it into a joint bank account with her husband post-marriage, and used it to pay for shared household expenses and utilities. If the premarital money was thereafter “untraceable” meaning the wife could not identify what was premarital and what was marital, then the wife in our scenario could have a difficult time asserting that her premarital money should be considered her separate property, not marital property. As marital property, it would be subject to division between the spouses.
Divorce is rarely an easy time in either spouse’s life and the financial aspects of a divorce can make things even more difficult. That’s where divorce lawyers can help.
As mentioned, “traceability” is paramount in successfully overcoming the burden of proving that a proponent’s separate property is in fact his or her separate property. In the State of Ohio, “traceability” is “‘the focus when determining whether separate property has lost its separate character after being commingled with marital property.’” Hood v. Hood, 2011-Ohio-3704, ¶ 13 (10th Dist.) (citations omitted).
As the burden of proving a spouse’s separate property is on that spouse, having good records of your separate property, like premarital monies or assets, is crucial. Specifically,
“[t]he burden to prove the separate identity of property can be met with documents or testimony, but ‘merely claiming but ‘merely claim[ing] that the property * * * constitutes * * * separate property does not make it so.’”
Kolar v. Kolar, 2018-Ohio-2559, ¶ 29 (9th Dist.), citing Eikenberry v. Eikenberry, 9th Dist. Wayne No. 09CA0035, 2010-Ohio-2944, ¶ 27-28 (emphasis added).
As discussed above, merely claiming that your premarital property is your separate property is not enough. This is where good record-keeping and a family law attorney comes into play.
To protect your interest(s) in your premarital or otherwise separate property, it is always a great idea to keep original purchase documentation of any premarital assets, maintain copies of wills, trust documents, and inheritance letters, to set forth the nature of your inheritance(s), and maintain detailed financial records, like monthly bank statements, invoices and receipts. This is especially important given the fact that most banking and financial institutions hold on to statements for six (6) or seven (7) years, if not less.
In any family law matter, professional assistance when entering into a prenuptial agreement, navigating a divorce or dissolution, or simply seeking advice regarding how Ohio’s Courts classify marital and separate property is always advisable.
Plakas Mannos has a team of family law attorneys near Akron and Canton, Ohio, who are experienced in family law, including prenuptial or postnuptial agreements. Our knowledge and understanding of these agreements allow us to handle navigating through the complexities, leaving you with the ability to focus on the more exciting moments of wedding planning and marriage. Contact us today with any Ohio family law questions.