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Are separate bank accounts enough to protect your savings from divorce?

Maintaining separate bank accounts is an increasingly common way for married couples to maintain independent finances while sharing their lives. However, if that marriage ends, those accounts may not be as legally separate as couples may think.

What should people know about separate bank accounts when creating a strategy for their divorce?

Why do couples maintain separate bank accounts?

Couples choose to keep separate accounts rather than joint accounts for many reasons. Some couples choose to keep separate accounts because one or the other has saved more prior to their wedding.

Others maintain that separation to keep one spouse’s challenges with spending from impacting their household finances.

Still others choose to keep separate accounts so that they can spend money as they wish to without the potential strife that comes from different approaches to money.

The court may consider separate bank accounts jointly-owned.

In Texas, much of the property and debt acquired during a marriage is community property, jointly-owned by both spouses even if only one spouse’s name is on the account or title. A variety of assets are generally separate property, including inheritances, gifts, personal injury settlements and property owned before the marriage. Couples can also define an asset—including their bank account—as separate property through a prenuptial agreement.

While you may think that separate property would always include the bank account you established prior to your wedding, merely keeping separate accounts may not provide the legal protection that couples are looking for.

The funds in separate bank accounts may become community property through a process called commingling. Any money earned during your marriage would still be community property. As a result, depositing those funds into your account could make it difficult or even impossible to determine which money was your separate property, and those “commingled” funds could be subject to division.

Thankfully, couples that want to protect the savings in their joint account have options. If you want to proactively protect your finances, it may be important to seek guidance from an attorney experienced in financially complex divorce proceedings. They can help you create a legal strategy that supports your financial goals and protects the savings you have built.

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