Gone are the days when married people always merged all of their assets. Though many of them still handle their finances this way, research shows that many younger couples continue to keep separate bank accounts for everything. Almost 30% of millennials do not have a joint bank account with their spouse.
Though many people might think this will protect their assets in a divorce, that is not the case. Fortunately, experts have advice on how to handle this tricky money issue. If you're considering a divorce and you're wondering how it might affect your money, this could be valuable information.
What separate accounts don't do
Even if only your name appears on the bank account or property deed, the divorce process subjects many assets to division. Kentucky is what is known as an equitable distribution state. This means that any property acquired during the marriage should be the property of the spouse who originally obtained it. However, these assets may also be considered marital property, which means they can be divided fairly between the two parties. In order to make a settlement fair in the eyes of the court, property distribution might come into play.
What separate accounts can do
Despite this, keeping separate accounts might be a good idea. If your divorce proceedings become contentious, your spouse might try to limit your access to shared assets. If you have your own bank account, it can keep your funds safe for your use. Though the divorce agreement could still divide those assets, it can still help you get through your divorce.
Before a divorce even enters the picture, separate accounts may mean less arguments over money. Many experts recommend having one joint account that both spouses pay into and use for shared expenses. This kind of account would still likely be part of a divorce agreement.
How to protect yourself
Experts say the best way to protect yourself is to get a prenup before getting married. This is particularly useful for anyone who enters a marriage with a lot of money or property. It can also encourage discussions about money, which may head off many issues before they even occur. If you're already married and you receive an inheritance, experts say to keep it separate because the court may consider it a joint asset.
Though working with finances can be time consuming and tedious, it is very important. If you're in the process of getting a divorce and you're concerned about your finances, involving professional legal help may be the best course of action. It is important that you begin this new chapter of your life with everything you need.