Opening a joint bank account was once something couples in New Jersey and around the country did as a matter of course soon after getting married, but a recent Bank of America survey reveals that almost one in three married Millennials are choosing instead to keep their money in separate accounts. Millennials may believe that doing this will protect their assets should they decide to divorce, but that is not necessarily true.
In states with community property laws, income earned during a marriage is considered part of the marital estate and must be divided equally in a divorce. The name on a bank account has no bearing on this process. In states like New Jersey with equitable distribution laws, equal division is not required but marital assets must be divided fairly. However, this does not mean that funds in a separate bank account are not subject to division.
When funds in separate bank accounts become a contentious issue in an equitable distribution state, it may be left up to a family law judge to decide if and how the money should be divided. Assets spouses owned before getting married and inheritances they received while married are generally considered separate property, but even these assets may be subject to division in certain situations.
Experienced family law attorneys may suggest prenuptial agreements to spouses who wish to set clear rules for how their assets will be divided should they divorce. However, these agreements may not be enforceable unless they are essentially equitable and entered into willingly. Prenuptial agreements could include provisions dealing with asset distribution and spousal support, but they cannot establish child custody, child support and visitation arrangements. Attorneys might also recommend alternative approaches such as collaborative divorce or mediation when property division negotiations are unproductive and spouses wish to avoid protracted and costly legal battles.