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Complications can arise when categorizing assets

Dividing assets in a divorce can spark contentious battles between spouses. Both people want what they feel they deserve, and both want to ensure they will be financially stable after the divorce. 

In this environment, it is not unusual for parties to disagree about specific property and what should or should not be eligible for distribution. This difficulty to categorize assets can stem from misinformation and miscommunication, so it is important to have a basic understanding of how property is categorized in Pennsylvania.

Marital property

Only marital property is eligible for distribution in Pennsylvania. In accordance with state equitable distribution laws, marital property is property that either spouse acquires during a marriage. It also includes increases in value of nonmarital, or separate, assets. 

Even if a home or other asset is in one person's name, it is presumed to be marital property if it is acquired during the marriage.

Separate property

Separate or nonmarital property is generally not eligible for distribution, and it will stay with the individual owner upon divorce. Separate property includes any property owned before the marriage as well as property excluded from distribution by a prenuptial agreement. Gifts from third parties and inheritances in one person's name are also typically separate property.

Separate property that becomes marital property

Separate property may not necessarily remain separate throughout the course of a marriage. If you have separate property that you maintain with marital assets, then it can become marital property. If you commingle separate funds with marital funds, they can be considered marital assets.

Understanding the basic criteria of how property is categorized in a divorce can give you an idea of what is and is not eligible for distribution. It might also help you see where confusion can arise and complicate matters when you are dealing with sophisticated and/or substantial assets.

Considering how much is at stake when it comes to dividing assets in divorce, it can be vital that you consult an attorney who can help you navigate the complexities and nuances of this process. 

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