Buzz
Just because you maintain separate finances during your marriage doesn’t mean they will stay separate in the event of a divorce.
According to CNBC, many people believe that having accounts and assets in their own name will protect them during a divorce—but that assumption is often incorrect.
Some individuals might think, ‘The house is under my name, so it’s mine,’ or ‘I deposited all my earnings into a personal bank account, so it’s all mine,’” explains Susan Guthrie, a family law attorney and mediator, in an interview with CNBC Make It.
However, this assumption is “100% wrong,” she states. Regardless of your state’s laws, once you’re married, you can’t just assume your assets will stay solely yours if a divorce occurs.
Certain states implement “community property” laws, where any assets acquired or earned during the marriage are considered jointly owned, no matter whose name appears on the legal documentation.
Yet, even in states without community property laws, you could still be required to divide savings and assets with your future ex-spouse—even if those assets were kept in separate accounts.
This means that to protect your assets during a divorce, you need to establish that protection before the marriage takes place.
In other words, a prenuptial agreement.
Keep in mind: a well-crafted prenuptial agreement is meant to benefit both partners. It’s not just a means for you to claim ownership of everything and deny your partner access. It’s a document that helps outline what the partner with fewer assets or a lower earning potential is entitled to—especially if that person is taking on caregiving or household responsibilities while the other partner focuses on their career.
Ideally, your prenup should feel like a fair agreement for both parties. If it doesn’t, that might signal the need for some difficult conversations with your future spouse or even a reconsideration of the relationship altogether.
This doesn’t mean that you shouldn’t keep separate bank accounts during your marriage. Couples who have individual accounts, or even a mix of separate and joint accounts, can still maintain spending freedom for personal, everyday purchases without needing approval. Separate accounts can also provide security in situations like domestic violence, allowing a partner to leave more easily with their own funds.
However, you shouldn’t use separate accounts as a cheap way to avoid creating a prenup. Take the time, and spend the necessary money, to consult with a lawyer and draft a fair prenuptial agreement (even if it’s in the middle of a busy wedding planning season). Be sure to discuss potential financial situations that may arise in the future, like inheritances, as well as how to address existing financial issues such as student debt.
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