Whether you’re about to head down the aisle, or already married, it’s important that you understand how your property, money, and other financial assets will be affected.
Before we dive into this topic further, let’s first review the basics of what a martial vs. non-marital asset is in the court of law.
What Is Marital Property?
When two individuals are married in their state, they are legally bound together. That means anything acquired during the marriage (i.e., a house, car, retirement plan, or even debt) is considered marital property. There are, however, a few exceptions to this rule.
Depending on your state, assets can belong to one spouse if all paperwork is in that individual’s name alone. However, this quickly becomes moot as soon as both spouses use this asset.
This is what’s referred to as “commingling.” It transforms the asset from personal to marital property. For example, if both spouses live in the same house, it’s considered marital property, even if only one name is on the mortgage.
Are Bank Accounts Marital Property?
Yes, bank accounts fall under the same rules as marital property. If the account was opened during the marriage, or if a personal account becomes commingled, it is now considered marital property.
For bank accounts specifically, pay attention to “earned income”. While married, all earned income by either spouse is considered marital property. If you earn income during the marriage and put that money into an account with only your name on it, the account is still considered commingled.
This is true even for your pension and 401k.
Are There Any Scenarios Where Bank Accounts Aren’t Marital Property?
Typically, any asset previously owned by you, prior to the marriage, will continue to be classified as personal property after the marriage—unless it’s commingled.
Let’s break this down further. Your account may still be considered personal property if it checks ALL of the following boxes:
- Your spouse never contributed to the bank account
- Your spouse’s name was never on the account
- Your spouse’s income was never added into the account
- None of your earned income, during your marriage, went into the account
There are a few other scenarios, where certain accounts may still be considered personal property:
- You had a prenuptial or postnuptial agreement that specifies the nature of an account.
- Property or assets are acquired while still legally married but after the “validation date” (i.e., when all marital assets are valued in preparation for the division).
- An account holds only an inheritance or gift and no earned income has been added to it.
How Can I Be Sure Whether an Account is Personal or Marital?
Determining what is non-marital property vs. marital property can be difficult, particularly since it changes between states.