How to Divorce With Separate Bank Accounts & Splitting Property

By Rob Jennings J.D.

Marriage is an economic as well as an emotional union, so the divorce process has an economic component, as well. Fighting over property and debt division can be a long, drawn-out process, which can cost more in attorney fees than the net value of the marital estate. To minimize the financial and emotional costs of the divorce process, it makes sense to attempt an amicable settlement of your financial issues -- if at all possible. Litigation and formal mediation aren't always necessary, if you can reach an agreement outside of these processes.

Marriage is an economic as well as an emotional union, so the divorce process has an economic component, as well. Fighting over property and debt division can be a long, drawn-out process, which can cost more in attorney fees than the net value of the marital estate. To minimize the financial and emotional costs of the divorce process, it makes sense to attempt an amicable settlement of your financial issues -- if at all possible. Litigation and formal mediation aren't always necessary, if you can reach an agreement outside of these processes.

Step 1

Decide which property and debts are marital and which are separate. State laws on property and debt division vary, so you'll want to familiarize yourself with your state's family law code before making any major decisions. In general, separate property and debt is that which you brought into the marriage, along with those property and debt items that are traceable to something you brought into the marriage -- unless you intermingled your separate and marital property to the point where they're indistinguishable from each other. Whatever you earned or incurred after your wedding day and before your marriage ends is often marital. State law variations are extremely important here, as some states consider your date of separation to be the cut-off date, while others use date of divorce, date divorce complaint is filed or some other measure.

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Step 2

Agree on whether or not you're looking for an equal division. Although courts in community property states are generally required to evenly divide the marital estate, judges in equitable distribution states, which is the majority of jurisdictions, are empowered to award unequal distributions in the presence of certain statutory factors. Even if you live in a strict 50/50 state jurisdiction or there is no basis for an unequal division, you may agree to a lopsided balance just to get out of paying alimony or to reduce your child support obligation.

Step 3

Allocate assets and debts between you and your spouse until you reach a mutually acceptable division. Keep in mind that all dollars are not created equal; a dollar in a retirement account will be taxed before it reaches your hands, so it's actually worth less than a dollar in the bank.

Step 4

Reduce your agreement to writing. Depending upon the procedural stance of your case and the nature of some of your financial assets, you may need to have your agreement approved by a judge on the record in open court. When you appear in court for the judge to approve your agreement, she will generally conduct a brief inquiry of both sides to ensure that you both understand what you're signing and that you have done so voluntarily, although some judges will skip the inquiry, if you're both represented by lawyers.

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Proving Money Is Inherited

References

Related articles

How Long Does a Marital Separation Agreement Last?

A marital separation agreement is used when a married couple decides to separate; it may or may not be followed by a divorce proceeding. A separation agreement can govern such matters as divison of property, child visitation, and both spousal and child support. In states which require that the parties live apart for a period of time before divorce will be granted, a marital separation agreement can be a preliminary step. How long your agreement will last is a matter which can be spelled out in the document; however, certain matters, such as child support, are necessarily limited in duration while others, such as division of property, are permanent.

What is the Division of Assets Divorce Law?

The sharing of property between spouses is a basic component of marriage. When the legal relationship between spouses is severed by divorce, property shared during the marriage must be divided. Agreements regarding property division made before or during the marriage are recognized by courts, as well as settlement agreements entered into at the time of divorce. If the spouses cannot agree, state law varies on whether a judge must divide the property evenly or in another manner to achieve fairness. Knowing what is considered marital property and understanding the laws regarding property division will help you better prepare for the divorce process.

Divorce Property Rules

When you and your spouse separate, you must split your economic lives as well as your personal lives. Although the law on property division varies from state to state, all states have some way of dividing marital property and debt upon separation. Learning how your marital estate may be distributed can make an often confusing process easier to bear.

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