If one or both spouses buy a house or establish a business during the marriage, that usually will be marital property, particularly if the house or business is purchased with the husband's and wife's earnings. Separate property is property that each spouse owned before the marriage. Each spouse may buy, sell, and borrow money on his or her separate property. Income earned from separate property, such as interest, dividends, or rent are generally separate property. However, in some states that recognize community property, these profits may become marital property.
Separate property can become marital property if it is mixed with marital property.
If, for example, a wife owned an apartment building before the marriage and she deposited rent checks into a joint checking account, the rent money probably would become marital property, although the building is likely to remain the wife's separate property as long as she kept it in her name. If the wife changed the title on the building from her name alone to the names of both herself and her husband, that probably would convert the building into marital property. In addition, if one spouse put a great deal of work into the other spouse's separate property, that could convert the separate property into marital property, or it could give the spouse who contributed the work a right to some form of payback. A later section in this chapter will discuss how courts divide marital property in a divorce . Everything you need for court related issues.