Marriages aren’t the same as they were in previous generations. More millennials who marry have already completed their education, established their own careers and even purchased property. When they marry, they may keep some aspects of their lives separate. It is not even automatic for a woman to change her last name after getting married.
In some ways, modern spouses may think they are protecting themselves in case the marriage does not last. By keeping their assets separate, they believe they can protect them from asset division if they should ever divorce. While this theory may work in some cases, it is not always true, especially when it comes to your separate financial accounts.
Keeping your assets separate?
Unless you and your spouse have signed a premarital agreement, you will likely be dealing with Michigan laws when it comes to your divorce. Michigan, like most other states, follows equitable distribution rules, which means that any assets you and your spouse acquire during the marriage belong to both of you. This includes your separate incomes.
You may think you are keeping your income separate from your spouse’s by depositing it into a personal account you established before marriage. What you may actually do is comingle marital assets with your individual funds. Since income you earn while married is likely joint property, adding it to your bank account may automatically subject the contents of the account to asset division. Likewise, using funds from your private account for marital purposes, such as improving the family home, is a form of comingling.
Your records make a difference
If you have individual investments before you marry, you would be wise to keep meticulous records to protect those assets from property division. Brokerage firms may not hold onto the records for your accounts indefinitely, and you may find it difficult to prove that the funds in them are not joint property. While you may not be able to protect the interest, appreciation or growth of assets you owned prior to marriage, with diligent record keeping, you may spare your pre-wedding balances from your divorce.
You may find that a prenuptial agreement is a more positive way to protect your separate assets. Of course, if you are already facing divorce, it is too late for you to take these precautions. However, a skilled attorney at your side may guide you in working through a peaceful negotiation to help you reach your goals at the end of your marriage.