[This is an informal article intended for casual reading. Any determination of what is or is not marital property should be made on a case by case basis by a licensed attorney.]
“What’s mine is yours” is a common expression of generosity. Adding a second phrase “and what’s yours is mine” is frequently how spouses view their belongings in regards to their significant other. This perspective has a tendency to drastically change when a marriage starts to deteriorate. New clients sometimes come to our office incensed at the idea they may have to “pay” their ex some sort of lump sum or support upon termination of the marriage. Even major broadcasters like CNN write articles characterizing divorce settlements as “costs” to one spouse, and a “payment” to the other. The truth is the law, at least in Ohio, takes marriage and marital property and liabilities very seriously, even if many of her citizens do not.
What is marital property?
Marital property is statutorily defined as:
(i) All real and personal property that currently is owned by either or both of the spouses, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage; (ii) All interest that either or both of the spouses currently has in any real or personal property, including, but not limited to, the retirement benefits of the spouses, and that was acquired by either or both of the spouses during the marriage; (iii) Except as otherwise provided in this section, all income and appreciation on separate property, due to the labor, monetary, or in-kind contribution of either or both of the spouses that occurred during the marriage; [ORC 3105.171(A)(3)(i-iii)]
To put it simply, if it is acquired during the marriage, then the property is marital. There are of course several exceptions, such as inherited property, compensation for personal injury, certain gifts, and what the law calls “passive income” (which the author will not try to even scratch the surface of in this article)[ORC 3105.171(A)(6)], but how the courts have interpreted these exceptions to marital property are incredibly complicated and still open to equitable arguments. The bottom line is everyone needs an attorney to determine, or at least confirm, what property owned by the parties is and is not “marital.”
How is marital property divided when a marriage is ended?
The word that modern courts have always used in determining how to divide assets in the event of a divorce is “equitable,” and is at the center of Ohio’s focus as well [ORC 3105.171(B)]. Webster defines equitable as “just or fair: dealing fairly and equally with everyone.” Well, what does that mean in the divorce context? The Ohio Legislature has partially taken the legal definition determination away from the judges, mandating that “the division of marital property shall be equal (unless) equal division of the property would be inequitable” [ORC 3105.171(C)]. What’s yours is theirs, and what’s theirs is yours.
When considering whether or not equal division of marital property would be inequitable, the court looks at a long list of factors including the duration of the marriage, the liquidity of the assets at issue, tax consequences, the nature and structure of the parties’ retirement accounts, etc. [ORC 3105.171(F)]. What is most notably omitted from the statute of what the court is to consider, is who actually “made” the money by their labors, services, etc. The last statutory consideration is a catch-all, allowing the courts to consider “any other factor that the court expressly finds to be relevant and equitable” [ORC 3105.171(F)(10)], but the courts are clearly (and this has been confirmed by case law) not supposed to heavily weigh whose profession generated the marital assets.
If I were king, every couple seeking to get married would have to read this article, and most notably the next two sentences. Getting married is a big freaking deal personally, socially, and legally. Do not go into it without knowing what you are doing. When Dmitry Rybolovlev got married, someone should have whispered in his ear “Hey, if you make 9 billion dollars in the next 23 years and then divorce your wife, you’re probably gonna lose 4.5 billion of those bucks.” Some people really have it bad. Just remember, when you get married, what’s yours is theirs and what’s theirs is yours… at least from the execution of the marriage to the date of separation.