What happens in a divorce when spouses have kept separate financial lives?

Lately I have seen a large number of divorcing couples who have kept their bank accounts and debts completely separate all throughout their marriage.  Does that mean those accounts are separate property and the debts will go to the person whose name is on the debt?  No.

In general, any property accumulated during the marriage is community property, regardless of whose name is on the account or the title.  Any property owned by either spouse prior to the marriage is the separate property of that spouse.  Therefore, if the couple buys a house together prior to marriage and it is in only one spouse’s name, it is technically the separate property of that spouse.  (There are ways for the other spouse to get access to some money from the house, but that is another topic for another day.) Inheritance is also considered separate property, as are gifts.  If it does not fall into one of those categories of separate property, it is community property.

I do not recommend keeping your financial life separate from your spouse’s financial life, at least without full knowledge of what is going on with your significant other.  You could be help responsible for a portion of your spouse’s debt, even if it was in his or her name alone and even if it was frivolous spending.  Proving that the parties had an agreement to keep everything separate and to each be responsible for his or her own debts (or to each keep his or her own property) is difficult unless such an agreement is in writing.  The spouse in the weaker financial position will undoubtedly be looking to equalize in the event of a divorce.



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