Are Separate Bank Accounts Considered Marital Property? -

Are Separate Bank Accounts Considered Marital Property?

In New Jersey, separate bank accounts are not automatically considered marital property just because they were held during the marriage. However, whether the money in the account is marital property depends on how the funds were earned or deposited.

Funds in the Account: Origin of the Funds

The source of the funds in a separate bank account is a crucial factor in determining whether the account is marital property. If the funds in a separate account were acquired before the marriage or were inherited or received as a gift to one spouse, the funds may remain separate property.

For example:

If one spouse opens a separate bank account before the marriage and deposits their income earned from a job they held prior to the marriage, those funds may be considered separate property.
If one spouse inherits money from a relative and deposits it into their personal account, this may also remain separate property.

However, if funds from both marital income and separate property are deposited into the account, it becomes more difficult to distinguish between what is marital and what is separate.

Contributions to the Account

Even if one spouse opens and maintains a separate account, the contributions made by both spouses throughout the marriage could influence whether the account is considered marital property. If both spouses made financial contributions to the account, the court may determine that the account is indeed marital property, regardless of who holds the account in their name.

For instance, if one spouse deposits their paycheck into the account and the other spouse deposits funds from joint savings, the account may be classified as marital property.

How Will Separate Bank Accounts Be Treated During Divorce in New Jersey?

If separate bank accounts have been deemed marital property due to contributions made by both spouses, they may be subject to equitable distribution in a New Jersey divorce. If so, this means the court will divide the assets in a manner that is fair and just but not necessarily equal.

New Jersey is an equitable distribution state, which means that the court will evaluate various factors, such as:

The length of the marriage.
The economic circumstances of both spouses.
The contributions (both financial and non-financial) made by each spouse to the marriage.

Even if separate accounts are not considered marital property, the court may still consider the overall financial picture, including all assets and liabilities, when making its division.

Protecting Your Separate Bank Accounts During Divorce

If you want to ensure that your separate bank accounts remain your property during a divorce, there are a few strategies to consider:

Keep Separate Funds Separate: Avoid mixing marital funds with separate funds. Make sure to keep records of when and where money was deposited into your account.
Create a Clear Financial Record: Maintain clear and organized records of your financial accounts, showing when assets were acquired and how funds were deposited.
Consult a Financial Expert: In cases where there are substantial assets, it may be beneficial to consult a financial expert or forensic accountant to help trace the origin of funds and demonstrate the separate nature of the account.

In New Jersey, separate bank accounts can remain separate property if the funds in those accounts were acquired before the marriage or are from gifts or inheritance. However, if the funds in the account have been commingled with marital funds or used for family expenses, the account may be classified as marital property and subject to division during divorce.

Understanding how separate bank accounts are treated during divorce is essential for protecting your financial interests. If you are going through a divorce and have concerns about the classification of your bank accounts, consulting with an experienced family law attorney can provide clarity and help ensure that your rights are protected throughout the divorce process.