If you’re wondering, “Are separate bank accounts considered marital property?”, you could be in for a shock. More and more young couples are now deciding to keep their funds separate from their spouses during marriage, but this doesn’t mean that their partners won’t be given access to this money if they decide to divorce further down the line.
What legal specialists say
Experts say your money is not yours alone even if its sitting in a separate account. Similarly, if it’s your name on the property deeds, this doesn’t mean your home belongs to you and you only. Regardless of what your state’s laws are, any of your assets can also become your former spouse’s if you decide to get divorced.
Are young couples using joint bank accounts?
A Bank of America study said that around 28% of millennials were avoiding joint bank accounts during marriage. This was more than twice the number of baby boomers and Gen X couples. One reason for this is said to be the availability of apps that make separating marital funds easier and allow one spouse to pay another within mere moments. In addition, some young couples are choosing to keep their funds separate because they have experienced their parents’ messy divorces that were linked to financial problems.
Why are couples separating their money?
There are many reasons why young people are opting to keep their money separate from their spouses. One reason is to avoid confusion. Some couples keep their funds separate because one partner is responsible for paying specific bills and the other looks after others. It’s not uncommon for married couples to use joint bank accounts alongside separate accounts, with the joint accounts being used for living expenses like mortgage payments and grocery shopping.
Advice for Virginia couples
If you live in Virginia, you will fall under equitable distribution laws. These essentially say that anything acquired during the marriage is the property of the person that earned it. However, divorce attorneys can argue that any assets acquired by either partner can be regarded as “marital property” and can therefore be divided between the two former spouses. Assets may be divided fairly, but they won’t always be split equally. Judges can even instruct one ex-spouse to use their assets to form a settlement once the relationship is over.
The benefits of separating money
Regardless of who the assets belong to, keeping money separate from other funds can still be beneficial for a couple. If the divorce process turns bitter, one spouse can restrict access to a joint bank account or empty it. In this case, access to separate funds can be something of a lifesaver. Some people also apply for credit cards in their own names so that they’re protected if this does occur.
The popularity of prenups
Growing numbers of couples are now signing prenups or prenuptial agreements so that their assets are protected if things turn nasty during a divorce. Although these have been mainly associated with celebrities and HNWIs in the past, they have become much more mainstream over recent years. Prenups can be helpful as they can encourage young couples to talk about serious issues like finance early on in their relationships so they have the money management skills they need to protect them during more challenging times. It’s worth noting that prenups can be modified later if you feel the terms need to be amended.
Inheritance during marriage
Those who receive inheritances during marriage are advised to keep the money separate rather than spending it on an asset or home improvement. This is because the law may decide the money has been “commingled”, making it much harder for you to claim it back if divorce does take place.