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Separate bank accounts offer little protection in a divorce

| Jul 3, 2019 | High-Asset Divorce, High-Asset Divorce |

Opening a joint bank account was once something couples did as a matter of course shortly after getting married, but almost one in three married millennial couples in Arizona and around the country prefer to keep their money in separate accounts. Young people often do this because they believe that keeping their finances separate will protect them in a divorce, but this is rarely the way things work out in the real world.

Most states have what are known as equitable distribution laws that require marital assets to be divided fairly. Money earned during a marriage is considered part of the marital estate regardless of the name on the bank account it is deposited in, and it is therefore subject to division during divorce negotiations. Arizona is one of nine states with community property laws. These laws state that marital assets must be divided equally.

Separate property are the only assets that are not divided equally in an Arizona divorce. These are either assets spouses owned before getting married or inheritances they received while they were married. However, even these assets may be subject to division if they become commingled with marital assets. This could happen if part of a separate inheritance was used to improve a marital asset like a home or placed in a joint retirement account.

The strictness of community property laws can become a contentious issue during a divorce cases. Experienced family law attorneys may advise couples who wish to avoid this problem to consider prenuptial or post-nuptial agreements. While these agreements cannot contain provisions dealing with child support, child custody, or visitation, they can specify how assets will be divided should a marriage end in divorce. They can also include clauses dealing with spousal support. Prenuptial agreements are often challenged in court, and judges may consider them unenforceable if they are wholly unfair or the parties involved were under duress when they signed them.