Ohio recognizes two types of property in domestic relations matters: separate property and marital property. Identifying assets and determining the separate or marital nature of the assets is one of the most important tasks in any domestic relations case.
What is Separate Property in Ohio?
Property division in a divorce, dissolution or legal separation in Ohio is governed by Ohio Revised Code 3105.171. The statute defines separate property as being any real property (i.e., real estate) or personal property (property other than real estate) that is found to be one of the following:
- An inheritance received by one spouse;
- Any property that was acquired by one spouse before the marriage;
- Passive income (i.e., acquired from means other than from the monetary, labor or in-kind contribution of either spouse) and appreciation from separate property;
- Any property acquired by one spouse after a decree of legal separation;
- Any property excluded by a valid prenuptial agreement;
- A personal injury award (except for loss of marital earnings and compensation for expenses paid from marital assets); or
- Any gift that is made after the date of marriage and that is proven to have been given to only one spouse.
A spouse who makes a claim that an asset is his or her separate property must be able to trace the property, and provide evidence to the Court which clearly demonstrates the separate nature of the asset. Tracing often involves providing historical documents relative to the asset in question, and sometimes requires expert witness testimony to support the party’s claim of separate property.
What is Marital Property in Ohio?
If the property does not fall into one of the categories above, it is classified as marital property. Ohio law presumes that all property is marital property until the party claiming it is separate property proves the separate nature of the asset. If the party cannot prove the asset in question is separate property, then it is found to be marital property, and will be subject to division by the court in a divorce, dissolution or legal separation action. Ohio Revised Code 3105.171 defines the following types of property as marital property:
- All property currently owned by either spouse, including retirement benefits, that was acquired by either party or both parties during the marriage (i.e., houses, bank accounts, etc.);
- All interest that either spouse has or both spouses have in real or personal property, including retirement benefits, that was acquired by either spouse or both spouses during the marriage;
- All income and appreciation on separate property, due to the monetary, labor or in-kind contribution of either spouse or both of the spouses during the marriage; and
- “Marital property” does not include any separate property.
Distinguishing Between Separate and Marital Property: An Example
The sections above make it seem that the distinction between separate and marital property is simple. However, spouses often commingle separate and marital property, making the determination of what is marital and what is separate much more complex.
Consider the following example: Stephen and Allison get married. Allison owns a condominium prior to the marriage. Owning the condominium before the marriage makes the asset Allison’s separate property. During the marriage, Stephen and Allison renovate the kitchen and bathrooms. Assuming the renovations were made using marital funds, the issue then becomes, how much value did the marital contribution add to the asset? If Stephen and Allison divorce, Stephen would be entitled to one-half of the appreciation on the condominium that resulted from the renovations made using marital funds.
In this scenario, documentation tracing Allison’s separate property interest in the condominium and documentation verifying that marital funds were used to make improvements to the property would be needed as evidence. Expert witness testimony, including a forensic accountant, or perhaps a real estate appraiser, may also be needed to clarify Allison’s and Stephen’s respective separate and marital interests in the condominium. Separate property tracing can be complex, and should be entrusted to a knowledgeable domestic relations attorney, along with their trusted expert witnesses.