Stacy Rocheleau, Esq.
Posted: 11 March, 2024
Table of Contents
Most divorcing couples that I have encountered have either separate or joint bank accounts. My husband and I use a joint bank account for bills and savings, but use separate accounts for our IRA’s. However, divorce attorneys always worry when they encounter couples who have only separate bank accounts. Eventually, they will ask if these assets are solely theirs. When they do ask, I have to break the bad news.
Who Owns the Money?
Couples who established bank accounts after the marriage began must divide these accounts equally when seeking divorce. Specific accounts that contain marital funds are the marital property of both parties. The name on the account is not important when it comes to deciding who “owns” the account for divorce purposes.
Divorce lawyers and courts look at bank accounts in two ways: community property and separate property. Couples split community property (like money in a bank account) equally. Meanwhile, couples who each own separate property keep their specific accounts or property. Judges will award separate property to the person judged to be the sole owner of that separate property.
What is Community Money?
Divorce courts use the word “community” to describe assets owned by both spouses in a marriage. If you purchase a vehicle while married, is is considered a “community vehicle.” If you used your credit and the vehicle is titled in your name, it is still considered community property.
This also relates to any purchased property, the furniture inside the properties, any money placed in bank accounts opened after the marriage began, and acquired stocks. During a divorce, community property is equally divided unless there are claims of marital waste. Any debts incurred during the marriage becomes community property of the couple and will need to be divided. Hiring a divorce attorney will be of significant value when going through this process.
The court may label your assets as “separate” if one spouse came into the marriage with previously owned property, or they are gifted property after the marriage began. For example: You came into the marriage with a bank account worth $50,000. During the marriage, you never added your spouse’s name to the bank account. This specific bank account would likely be declared separate property and not subject to being divided equally in a divorce.
When is Separate Not Separate?
Commingling is defined as ‘to combine funds or properties into a common fund or stock’. The main issue of property commingling occurs when separate and community property are mixed. The separate property is then considered to be community property and will be split equally between the divorcing parties.
Commingling can happen in several different ways. One common scenario occurs when you add your spouse’s name to a bank account.
- You added you spouse’s name to your bank account worth $50,000, and you and your spouse both use the account to deposit paychecks and pay bills. The original amount has been commingled. A family court judge would probably consider the $50,000 as community property.
- If your spouse’s name is not added to the bank account, but you both use the account to deposit paychecks and pay bills, commingling can also occur. The court could consider the original amount as separate property if your divorce attorney made a compelling argument. Detailed records can strengthen your argument. This could prove useful if the marriage has lasted for a significant time.
For a more detailed description of what is considered “separate” and “community” property, please review our article written by one of our skilled divorce lawyers: Division of Property and Debt.
How to Keep a Bank Account Separate?
There are ways to keep a bank account completely separate in the eyes of the court:
- The account should have only your name on it, not your spouse’s.
- The account should not receive deposits of community property. Money earned during the marriage cannot go into the separate account.
- Any inheritance money or gifts made to you can go into a separate account. If the gift has both spouses’ names on it (such as a wedding gift check), it can’t go into the separate account without commingling the funds.
Remember to keep detailed financial records from all bank accounts before, during, and after your wedding. These records can be helpful should you need to file for divorce. Many divorce attorneys will use these records if you want to prove that your accounts should remain separate.
