Photo of Professionals at Weinberg, Kaplan & Smith, P.A.
Photo of Professionals at Weinberg, Kaplan & Smith, P.A.
  1. Home
  2.  » 
  3. Property Division
  4.  » Separate bank accounts don’t always avoid property division

Separate bank accounts don’t always avoid property division

by | Jul 25, 2019 | Property Division

Marriage isn’t a one-size fits all arrangement. These relationships can take various forms, and what works for one Marlton couple may not work for another. That is why the relational expectations and the way finances are handled may differ significantly between baby boomer and millennial couples. One study highlights those differences. It found that many millennial couples are ditching jointly held bank accounts in favor of individual accounts.

The statistics may be surprising to some. The study found that 28% of millennials are choosing to forego joint bank accounts, which is twice as many as those in generation X and the baby boomer generation. There might be a number of reasons for this shift in marital finances. To begin, thank to technology millennials have numerous options available to them for easy money transfers. This makes splitting bills much easier. Perhaps another factor playing into this shift is the fact that many millennials saw how challenging it could be to divide joint accounts when their parents divorced. Therefore, they may see separate accounts as an easier way to protect their financial interests in the event that divorce occurs.

Yet, the truth of the matter is that simply having separate bank accounts typically isn’t enough to protect those funds from the property division process that accompanies divorce. This is because marital assets can easily become comingled, and many courts will consider income earned during the course of a marriage as marital property, regardless of how it is housed.

Since merely separating money into separate accounts is not enough to fully protect it from division, New Jersey residents who are contemplating divorce need to consider other legal options. One of the best ways to ensure protection during property division is to enter into a prenuptial agreement prior to marriage. This agreement spells out the financial responsibilities of each party during the course of marriage as well as how assets will be divided if divorce were to occur. A postnuptial agreement can do the same thing. These agreements are just entered into after marriage. Those who want to learn more about these legal documents and other ways to protect their financial interests during marriage dissolution can reach out to a competent legal professional of their choosing.