What happens to the property that each spouse owned before the marriage?
In most states, whether they follow a community-property or equitable-distribution scheme, the property that each spouse owned before the marriage, as well as property given to or inherited by one spouse during the marriage, usually remains that spouse's separate property. It may, however, be considered as part of the total circumstances in determining a fair allocation of the marital property. In addition, if non-marital property is not kept separate from marital property, it may lose its separate characterization and become subject to division.
Example: If one spouse had a bank account containing $5,000 before the marriage, but during the marriage the spouses both made deposits and withdrawals from the same account, the amount in the account at the time of divorce or separation will probably be deemed marital property, to be divided between the husband and wife. If, on the other hand, the spouse with the $5,000 account deposits only other non-marital money, such as inheritances to him or her alone, in the account throughout the marriage, all the money in the account will probably remain with that spouse upon divorce.
A house owned by one spouse prior to marriage presents unique issues, because often both spouses contribute to the home's maintenance and mortgage payments during their marriage. In some states, this commingling of marital and non-marital assets converts the home to marital property. Perhaps the fairer resolution, however, applied in other states, is that the amount of equity in the home at the time of marriage remains the original owner-spouse's property, but the increase in equity value during the marriage is marital property that belongs to both spouses. The same principles apply in cases involving increases in the value of a family business owned by one spouse before marriage.