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Why separate accounts may not help you in divorce

Younger married couples are more likely to keep their money in separate accounts than older ones are. That's one of the findings of a recent Bank of America survey. Some 28% of Millennial spouses report that they have separate accounts. They're more than twice as likely to have separate accounts as baby boomers and even Gen Xers.

Part of this may be changing attitudes about the importance of maintaining separate assets. Part may be Millennials' familiarity with apps that make it easy to transfer money to their spouse in seconds when they need to. One 29-year-old notes a more pragmatic reason. She says that she and her husband are "both children of divorce so we're kind of leery about combining our finances."

Family law attorneys, however, caution that just because only one spouse's name is on an account or other asset, like the deed to a home, that doesn't guarantee that they'll get it in a divorce. One attorney says that assumption is "100% wrong."

In community property states like Texas, any income or assets acquired during the marriage are considered community property that belongs equally to both spouses under the law -- even if it goes into an account that's in just one spouse's name. Even in the states where equitable distribution laws apply, a spouse and their attorney can make the case that they're entitled to some of the assets in the other spouse's name in order to achieve a fair settlement.

That's not to say there's no advantage to keeping at least some of your money separate. Separate accounts can give spouses greater autonomy over their money during the marriage. This can be particularly important when spouses have very different attitudes towards money and spending and saving.

To protect the money and assets you consider yours and want to leave the marriage with, however, your best bet is probably to get a prenuptial agreement or a postnuptial agreement that details who walks away with what. When drafting one of these agreements, each person should have their own attorney to ensure that their interests are protected.

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