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How common is it for spouses to have separate bank accounts?

In 2018, Bank of America conducted a survey and found that an increasing number of spouses were keeping separate bank accounts after marriage instead of pooling funds into joint accounts.

The research showed that maintaining separate bank accounts was most common among Millennials, with at least 28% of Millennial couples keeping their accounts in their individual names after marriage. This was in stark contrast to GenXers and Baby Boomers, who were twice as likely than Millennials to have joint bank accounts with their spouses.

Property division misconceptions tend to fuel the choice to keep separate accounts.

What was driving the decision to keep separate accounts? Many respondents reported seeing their parents’ finances, including jointly held funds and assets, negatively impacted by divorce. For these couples, keeping their accounts separate was done with the assumption that their spouse couldn’t stake a claim to the funds if they ultimately decided to divorce.

The mistaken belief that an account held in one spouse’s name is that spouse’s property is similar to how some spouses assume that if the deed for their home is held in only one of their names the home “belongs” to that spouse. Both assumptions are incorrect.

In Illinois, it is presumed that assets acquired during the marriage – including bank accounts and funds held in those bank accounts – are marital assets and are subject to division upon divorce. There are certain, limited exceptions to this presumption – such as funds or accounts inherited by a spouse during the marriage or money received from the sale of a pre-marriage asset – but even holding non-marital funds in an account opened during the marriage can be problematic, particularly if those funds are mixed with marital funds such as employment income deposited into the same account.

How to best protect your financial interests in the event of divorce.

Maintaining separate bank accounts may give both you and your spouse some peace of mind during your marriage, yet it is unlikely to benefit you if you decide to divorce. There are better strategies for protecting your financial self-interest and ensuring a fair division of assets. Prenuptial and postnuptial agreements are useful in memorializing a couples’ expectation as to how assets and liabilities will be classified as either separate or marital upon divorce. Both agreements help to provide peace of mind and an added layer of protection by determining the ownership and division of property in the event of divorce. Since prenuptial and postnuptial agreements are detailed, complex legal documents, having the benefit of an experienced family law attorney to work with you to understand and meet your goals is invaluable.