What people think they know about divorce is often a collection of half-truths and urban legends. People share advice that they read online or have heard from a coworker as though it came directly from a locally-licensed attorney. The truth is that divorce rules are different in every state, and the advice that people often give, while well-meaning, can get others into real legal trouble.
For example, it is common for those who know someone who is contemplating divorce to tell them to start a separate bank account. It is useful for someone to have financial resources set aside to support themselves when they first file for divorce, but they can get themselves into legal and financial trouble if they fail to follow certain rules when it comes to property disclosure and division. Even when someone never told their spouse about a bank account and only used their own money to help fund it, that doesn’t mean that the contents of their separate bank account is actually separate property.
The name on the account isn’t the deciding factor
Having an account in one’s own name might mean that a spouse cannot make direct withdrawals from the account, but it does not diminish the other spouse’s potential interests in the account. Generally, whatever couples earn during their marriages is marital property that they have to report to one another and the courts and will likely need to divide.
Even if they don’t directly divide the account in their own name, they need to disclose how much marital income helped fund the account so that the value of that income can influence other property division decisions. This rule holds true for other assets as well, including real property, retirement accounts and financial investments. Anything accrued or earned during the marriage and not explicitly protected by a marital contract could be part of the marital estate and subject to division in the divorce proceedings. Those that do not disclose such assets may find themselves accused of hiding assets and could face a less favorable outcome to property division matters when they divorce.
Those who are preparing for divorce don’t have to eschew setting aside savings to support themselves, but they must ensure that they make all necessary disclosures during their divorce to avoid complications and potentially significant financial losses. Discussing one’s divorce aspirations with a lawyer can help people better understand their responsibilities as they prepare to file for divorce.
