Protecting Your Money During a Divorce
In the past, it was generally assumed that once a couple got married they would combine their finances by creating a joint bank account. Nowadays, however, many couples, particularly “millennials,” are choosing to keep their finances separate even after marriage. A survey by the Bank of America revealed that close to 28 percent of married millennials, compared to only 11 percent of “Gen Xers” and 13 percent of “Baby Boomers” are keeping their money separate from their spouse.
Couples who keep their finances separate may also be trying to avoid the complications of property division if they ever get divorced. However, experts say that just because an asset or bank account is in your name, doesn’t mean it will automatically go to you in the divorce.
While having separate accounts or having both separate accounts and a joint account may save you and your spouse from arguing over the finances, you may still need to share the money in your individual accounts if you get divorced. In community property states, including Washington, any income or assets acquired during the marriage is marital property belonging to both spouses. Therefore, even if you used money that you acquired during the marriage to fund an account just for you, the money technically still also belongs to your spouse.
The best way for you to protect your finances is probably to get a prenuptial agreement. If you decide against a prenup, it is important that you keep a record of all the assets you brought into the marriage. Keep in mind that if you use money you brought into the marriage to pay for something related to the marriage, such as home renovations, that money will no longer be considered separate. Instead, it will be classified as “commingled” and it is unlikely that you will be able to get it back in a divorce.