Many married couples fully combined their resources for the sake of convenience and transparency. They close separate accounts and share a checking account and credit cards. Such arrangements make it easy to track income and spending.
Other times, spouses maintain a degree of financial separation. Each spouse might have a personal checking account and lines of credit that they use for personal purchases. They may also use shared accounts to pay specific household bills.
Couples preparing for divorce proceedings need to identify marital property and work out ways to split those resources. Divorcing couples generally acknowledge that joint accounts and assets held in the names of both spouses are subject to division. What they may not realize is that their separate financial accounts may also influence the property division process.
Marital income is typically divisible
When assessing the marital estate, what matters most is when spouses acquired assets or took on certain debts. Unless there is a marital agreement dictating otherwise, all income earned during the marriage is potentially subject to division.
Even when spouses retain some of their resources in separate accounts, they have to disclose the balance of those accounts during the property division process. The courts may order the spouses to divide those accounts despite the spouses making a noticeable attempt to maintain their resources separately throughout the marriage. The same rule also applies to debts, as well as retirement savings and even pensions.
Learning more about equitable distribution and reviewing financial disclosures thoroughly with a skilled legal team can help people prepare for an upcoming divorce. Even seemingly separate resources can influence the outcome of property division negotiations.