Welcome back to the Oxend Dine Law Podcast. If you inherit money or property while you're married, most people assume one thing. It's mine. But what happens if you put the money into a joint account? What if happens if you use it to buy a house during the marriage? Uh if you renovate property with that money, or what if you mix it in with marital assets? Today we're going to be talking about what is marital property versus separate property and how you can protect money you brought into the marriage and money that you inherit after the marriage. So I think we first in this episode have to start by defining the difference between marital and separate property. Marital property is any money, property, assets that you acquire while you're married. Pretty easy, right? You get married, everything acquired by either both spouses together or individually. Some people think if if it's my 401k and I earn the money, it goes into my 401k account, it's not marital. It is. So, it's any assets or money acquired by either spouse individually or jointly during the marriage. That is marital property. Separate property would be two categories. Property that you bring into the marriage. So, property, assets, money that you had before you got married or money that you received during the marriage that is inherited or gifted only to you from a third party. What I miss, Christine, >> right? No, that's very good. We're right on track. So, the good news for all of us here in Georgia is the law is very clear that as long as you follow the rules Jared and I are about to explain to you, all inheritance is separate property. That's that's the good news, right? So that's rare that we have such a clear defined position in law. Inheritance is separate. That is what it is. Now there are ways that it can be converted to be not separate. But remember that if you follow the right steps, it is undisputed. There is no argument that can be made. No. Johnny Cochran himself could come back from the grave. He's not going to be able to go into court and argue that your inheritance is marital. It is absolutely defined by law as long as you keep it separate and I mean completely separate. So here's a good example. Let's say that there exists this savings account and you and your spouse have had it open for a while. It came with your checking account. It's literally had $400 sitting in it for about the last six years. Nobody uses it. Nobody touches it. Nobody even remembers that it's there. It's just a virtually empty savings account that exists and it's just in my name, but you know, it was acquired during the marriage. We opened it up about six years ago. It's just been sitting. I get some inheritance money. Hey, why would I go open a new bank account? I've got one sitting there. It's virtually empty. It's a couple hundred bucks in it. I'll throw my inheritance money in there and that way it's still separate. No, it is not because by law that was a joint account whether your spouse knew about it, could log into it, whatever, it existed. It was marital in nature and you have put your money into a joint account and it's now comingled. So if you get that check, I don't care if it's $600, $600,000 new and separate established account is absolutely imperative to ensuring that you have kept that separate in every way. So, I think that the point there to take uh that Christine is trying to make is title matters. Title matters. What do I mean by that? I'm going to distinguish what Christine said from like a retirement account. So the example she gave where you've got a joint bank account and then you take separate money that you either acquired during the marriage by inheritance or you had before the marriage and you put that money from an account only in your name into a joint account or you inherit that money from your favorite aunt that died and left you $100,000 and instead of putting that account only in your name, you put it into the joint savings account. because that's in a jointly titled account, you have now gifted that money to you and your spouse. The difference being, let's say you've been working for the same company for 30 years and you worked with that company for 10 years before you got married. So 10 of the 30 years, you were contributing to your 401k and you continue to contribute to the 401k after you got married. That account has always been in your name, >> but you've put marital money in it, right? You had you had money in your 401k before you got married and then as you've continued to stay married and work for that same company, you've continued to invest in the 401k and money has gone into that same account. That is different. Why is that different? Because your spouse's name is not on that account. You haven't you haven't gifted the entire 401k account to your spouse because you haven't put their name on it. And guess what? We can still separate the values. And I'm going to tell you what's really important in a second to make sure you have. But in short, what we do is we look at the balance of that account as of the date of marriage. And all growth on that premarital balance. So I'm talking about interest, dividends, gains, all the gains that have accured on that separate portion during the marriage is your separate property. So let's say you had $100,000 in that 401k account uh when you got married. It now has $600,000. You don't just get the h 100,000 back. you get the 100,000 plus all the interest, dividends and gains have accured during the length of the marriage and that portion is yours. Your spouse has no claim and then the difference you would be dividing with your spouse. Now, what's really important in that scenario because I deal with this all the time and I know Christine does too. We have cases where people may have been married a long time, never thought they were getting divorced and they don't have the statement because it's been so long. They don't have the statement showing what they had in their 401k as of the date of marriage, which is really a problem. >> Sure. >> Because it's your burden when you're in court, you have the burden to prove what's your separate property. So, keep documentation. Um, I tell everybody that's getting married, especially folks that are getting married, you know, and they've got any assets. And look at a different podcast episode if you want to talk about prenups agreements. You definitely need one in that circumstance. But even if you got a prenups agreement, you need to keep statements from the date of the marriage showing what you had in your accounts as of date of marriage. So that if you get divorced, we can then calculate what that balance was as of date of marriage and what it currently is and to make sure that your spouse that does not have a claim to those balances that you brought into the marriage. >> That's right. So for the inheritance portion, if you have co-mingled like we've been talking about, the whole thing is marital and subject to equitable division. There is some saving grace here. Um, but I don't want you guys relying on it, but I think I'd be remiss to not explain it. In Georgia, we divide assets pursuant to equitable division. So equitable is what is fair and just. You could have a sympathetic judge that says, "All right, it's undisputed. This is inheritance. This $100,000 came from favorite Aunt Sally. It's clear in the will that it goes to husband. Wife wasn't in Aunt Sally's will. Aunt Sally didn't even like wife. It's very clear that that $100,000 was supposed to go to him. He put it in this separate savings account that he thought was separate. He wife doesn't have access to it. She can't withdraw from it. So though it is now by law marital and subject to equitable division, I as the judge think it's fair and equitable to give him his, you know, the money that Aunt Sally left to him, give him his inheritance and not divide it. That is within the bounds of law, but it would have to be that clear of a case. It would literally have to be here's the will, here's what Aunt Sally said. You may have to have the witness that comes in that says AA Sally hated Janet. She would have never left Janet money. And then he needs to show, look, I had this account. My name is the only one on it. I didn't understand. I thought I was doing it. You might get a sympathetic judge. You might also get a judge that says the law is the law. And that is now equitable money. And my job as the judge is to divide that equitable money. Um, I can't help what you did or didn't do. I have to go by what's on the table. So, don't chance that. If you do receive an inheritance of any level, any kind, what harm would it hurt to keep it separate? Even if you're just in a really happy marriage, like things are going great. You may not be watching my podcast if you're in a happy marriage, but say you you are and you know people in happy marriages. All right, tell them all. Like it's never going to hurt you to keep it separate. You're never going to regret having that separate money in a separate account. So if there is any level of inheritance, separate it out and you'll be safe. >> Yeah, the sure bet is keep it separate. Um Christine saying you still have a lastditch argument you can make, but don't count on that. Some judge may be sympathetic. The judge has the authority to still give you a portion of that, but if you want the sure bet, keep it separate. Yeah. >> Um all right. We've talked a lot about um accounts like retirement accounts and bank accounts. Same thing with real property. We probably deal with that just as much as we do bank accounts. And you know the example, there's two different examples I'll give. one I actually just dealt with in a case and it's husband owned the land outright before they got married and then after they got married they built a house on the land that husband owned and when they built the house >> put the house in joint names. Well, of course now the land and the house because you know when you when you get a loan for a house the the uh mortgage company's not going to separate the land separate out the land from the house, right? So now the entire tract is in husband and wife's name. And then years later, we get a divorce. And of course, the wife wants half of the whole thing. She's not willing to give husband the value of the land separate from the value of the house. The husband's like, "Wait a second. I had this land, owned it outright before we got married." And yeah, your name's on the house, but you shouldn't get the value of the house and the land. So that's another example. Even with land, even with property, same rules apply. If you have it and you own it and it's yours either by gift or inheritance during the marriage or you brought it into the marriage, then keep it titled in separate names. Now, there are circumstances where we do have to separate out property that's always been titled separately. So, we have situations where a party had the house, they already owned the house before they got married, not paid off, they still had a mortgage, and then they get married. They never add their spouse's name to the house, but they start making mortgage payments during the marriage. And as you're making mortgage payments using marital money, you're paying down the debt during the marriage. And so, while you're doing that, you're creating a marital interest. Nothing you can do about that. Nothing wrong with it. The point is, you can still get the value of what you brought into the marriage. So, we would be able to go back and look and say, "Okay, at the time the parties got married, this is how much debt was owed on the house. Here's what it's worth. There's a fancy calculation called called a Thomas calculation. Uh in short, we can do a calculation to figure out what portion of that property should be your separate property based on what it was worth as of the date of marriage plus the gains that have accured on that separate portion of the house during the marriage and separate that out for you as long as you don't put your spouse's name on the house. So again, I think the theme of today's discussion is if I could say it in two simple words, it would be title matters. >> Yeah, title matters. If you inherit land, I don't know, get a mobile home. Just that way it's not attached to the land. >> Yeah. Yeah. That's right. That's right. All right, folks. Let's see. Is there anything else we want to cover? We've talked about money. We've talked about property. We talked about gift. We talked about inheritance. We've talked about title. Um, I think that covers it, folks. Just just keep in mind whenever you can keep things separate. Don't turn your separate property into marital property. There's a lot of different ways you can do that. Like Christine said, if you're watching this podcast, don't have the oh crap moment. Um there's still some other arguments we can make. Like Christine said under equitable principles. Try to tug at that judge's heartstring and say, "Judge, it's just not fair." Because really, like Christine said, Georgia is an equitable division state. So you can always go to the judge even if the law is not on your side and say judge based on the facts of this case this result would not be fair and here's why and the judge does have that authority to still do something different but if you can avoid it always go for the sure bet and don't put yourself in that position with offices in Swan and Athens we are here to help you give us a call your first consultation is free uh we'll be happy to sit down with you go over your facts and your circumstances in detail get you pointed in the right direction. Subscribe wherever you're listening to this podcast so that you will be the first to know about future episodes. We look forward to speaking with you next time.