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What a separate bank account can (and can’t) do for you in a divorce

If you’re planning to tell your spouse you want a divorce or you anticipate that they’re considering one, you may put some money aside in a bank account in your name.  It can be wise to do that –- particularly if you’re concerned that your spouse could clean out your joint accounts.

However, when it comes time for you and your spouse to divide your assets, you aren’t necessarily entitled to all the money in that account. It could be considered marital property that’s subject to the distribution laws of the state. If you and your spouse are unable to work out a property distribution agreement on your own, a judge may rule that even separate accounts need to be shared.

Is having separate accounts from the start of your marriage a solution?

If spouses want to keep some of their assets wholly their own, it’s best to maintain separate accounts with completely separate sources of funding throughout the marriage. That’s becoming more common among younger couples. One survey by Bank of America found that over a quarter of Millennials are choosing not to have a joint bank account at all with their spouses.

Those separate bank accounts can prevent some common marital conflicts over money, particularly when spouses have different attitudes toward saving and spending. They can also help people maintain a sense of independence about their finances. 

If a divorce is on the horizon, is there any value in a separate bank account?

Financial advisors and family law attorneys often still recommend that their clients get a checking account and credit card in their name prior to divorce. If they don’t, and their spouse cleans out their joint accounts or maxes out their joint credit cards, it can put them in an unnecessary bind. One of the first things you should do if you believe that divorce is in your future is to talk with an experienced family law attorney. They can provide valuable guidance based on your unique situation.