It is easy to accumulate a lot of property and assets together during a marriage, as spouses purchase a place to live, and all of the things they need to fill that place and make it feel like home.
In the event of a divorce, it can be a difficult matter to decide who keeps what. However, even if spouses do not intend to divorce, many reports find that more newly married couples are attempting to avoid the complexities of property division preemptively by keeping their assets separate from the start.
More married couples maintaining separate bank accounts
In the past, opening a joint bank account was a common step couples took after they married.
This is no longer the case. In 2019, CNBC reported that 28% of modern married couples choose to maintain separate bank accounts. According to the survey, this number is more than double the rate of couples who kept their funds in separately titled accounts than in previous generations.
There are several reasons for this trend, including:
· Many couples wish to keep the current account they have when they marry; and
· Money transfer apps make it easy to repay each other.
Another primary reason that couples choose this option is because they witnessed the challenges of property division from their parents’ divorce. However, keeping funds separately titled will not necessarily help them avoid such obstacles, should they divorce.
Separately titled accounts might still be divided in divorce
Even though Virginia is not a community property state, separately titled bank or savings accounts may still be classified as marital property in the event of a divorce – and therefore subject to equitable distribution.
How could this happen? There are a few ways that separately titled accounts could become subject to property division, including:
· If funds in the separately titled accounts are used to purchase or fund any marital property – such as a home – that separate property could become marital property or mixed/hybrid property;
· If a spouse deposits his/her earnings during the marriage to the separately titled account; or
· If, for example, the funds in the separately titled account increase in value due to the efforts of the spouse during the marriage, such as with an investment account that the spouse actively manages and makes trades and purchases in.
Property division is often a complex matter in a divorce. In these cases, individuals should speak with an experienced divorce attorney to understand the property division process and determine how they can protect their financial future. In addition, for those individuals contemplating marriage and want to maintain their assets in the event of a later divorce, he/she should speak with an attorney about the possibility of a premarital agreement or steps he/she can take early on to best protect against separate property becoming marital property.