Once you understand what family property is—which basically is everything that you have at the end of your relationship—you have to be mindful of the fact that there's also certain types of property that's excluded from division and that would remain the sole property of the spouse who owns it.

Excluded property includes several categories:

If you owned a house before you started living together, the value of the house (net of any mortgages or associated debts) could be excluded to the person who owned the house before the relationship. The value would be how it existed when you started living together.

Inheritances or gifts received by one spouse during the relationship may be excluded. You'll want to show a gift letter or something to show that the gift was only given to one person as opposed to given to both of you.

Certain portions of legal awards or settlements, like personal injury settlements, might be excluded. Certain portions of insurance proceeds can be excluded. Certain trust funds can be excluded.

Property that was derived from excluded property can also be excluded. If you took an excluded house and then you sold it and took the money to put as a down payment on the new house, the exclusion would trace to the new house.

You can also agree to exclude an item or a portion of an item. Many people might agree to exclude personal credit card debt incurred after the separation or exclude their personal bank account balances because it feels fair to them to do so.

The actual value of the item at the time that it was received or at the time that the relationship began is excluded property. But if it increases in value during the relationship, then the increase in value can be considered family property and would be subject to division.

For example, if you got an inheritance during the relationship and you put it into an investment account which grew, the growth would be shared. Or if you own a home before you start living together, the value or net value that existed when you started living together would be excluded. But if you put the money into a new house, the increase in value of the home and the property is shared between the two of you. It's only the portion or the value that existed before the relationship that would be excluded.

Excluded property provides important protections for assets you brought into a relationship or received individually during it. However, the line between excluded and family property can blur when assets grow in value or are reinvested. Keeping clear records and seeking legal advice early can help you navigate these distinctions successfully.