Do Separate Accounts Have to Be Split in a Divorce?

If your separate accounts are split during a divorce depends on several factors.

Whether you must split your separate accounts in a divorce cannot be answered in a simple yes or no. It depends upon a few variables, including where you happen to live and how the judge divides the property.

Equitable Distribution

Most states fall under what is called "equitable distribution" when it comes to dividing marital property. Generally speaking, property belongs to the individual who earned or acquired it, but it is up to a court to distribute it based on what it considers fair and equitable. No set standard exists to make this determination. Other variables, such as the contributions of a non-working spouse and her earning potential after the divorce, can come into play.

Community Property

In 2010, Puerto Rico and eight other U.S. states consider almost all marital property community property. In Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas and Washington, each spouse equally owns all assets acquired during the marriage. Likewise, each spouse is equally responsible for all debt incurred. No matter which spouse is listed on any account, it is considered community property and could be split in a divorce as long as it was opened and contributed to during the marriage.

Separate Property

Certain special considerations apply to community property based on the state where you live. Not all property is always considered community property. Property owned before marriage, or any gifts or inheritances or recoveries for any personal injury incurred by the spouse are considered separate property, not community property of both spouses.

References

• Divorce Net: Distributing Separate Accounts
• Family Law - Free Advice: What is "equitable distribution?"
• Family Law - Lawyers: Community Property and Equitable Distribution States
• Legal Zoom: Comparing Equitable Distribution and Community Property
• Raggio Law: Texas Marital Property Issues