Separate property is property that a spouse owns individually rather than jointly or as part of the marital estate. Depending on state law, separate property may include assets acquired before marriage, inheritances, gifts from third parties, or property specifically designated as separate by agreement. In community property and equitable distribution states, the distinction between separate and marital property affects how assets are divided at divorce and how they are exposed to spousal claims or creditors. For estate planning, separate property rules influence which assets pass under a will, which follow beneficiary designations, and how family wealth is ultimately distributed among spouses, children, and other heirs. Life insurance policies, beneficiary designations, and ownership structures can all be designed to preserve the character of separate property and to respect prenuptial or postnuptial agreements.

Advisors encounter separate property questions when working with blended families, second marriages, and clients who have inherited businesses or investment portfolios. Coordinating with estate planning counsel, they help ensure that registration, titling, and beneficiary designations support the client's intent to keep certain assets as separate property. For example, a parent who inherits money may fund an irrevocable life insurance trust or separate account to benefit children from a prior marriage. During fact-finding, advisors ask whether assets are community, marital, or separate to avoid unintended consequences in divorce or death. Understanding separate property helps advisors structure life insurance, annuities, and investment accounts in a way that aligns with governing state law, agreements between spouses, and long-term family objectives.