Married couples typically share their income and their financial obligations through joint back accounts. As a result, depositing paychecks or other monies into one shared bank account is a relatively common practice. Spouses preparing for divorce should consider what might happen to the money in their joint bank account as they divide assets, which is especially true if one spouse earns far more than the other.
There may also be concerns about how to address any separate accounts owned by each spouse. Understanding the basics of the Michigan equitable distribution process can help people untangle their combined financial lives and more effectively navigate property distribution when they divorce.
Joint accounts are marital property
When both spouses have contributed to a specific financial account during the marriage, it becomes a marital asset that is part of the pool of marital property. Both spouses ultimately have an interest in the balance of the account, although how they divide it when they divorce can be drastically different from one case to the next.
During the financial discovery and review process, spouses provide disclosures to the other party, including financial records. A review of both contributions and spending habits can provide insight into the marital estate and guidance when determining what arrangements are fair.
Separate financial accounts held in the name of either spouse might also be marital property. Even when only one spouse contributes to the account, the income earned during the marriage is marital property that is subject to equitable distribution.
For some couples, prenuptial or postnuptial agreements can help solidify separate bank accounts as separate property that they do not need to divide.
Those preparing for divorce can benefit from getting legal guidance as early as possible to understand their rights and the laws that govern the distribution of their property as well as their shared debts. Our attorneys will help our clients use a rational approach to property division negotiations, and help prepare for litigation if a trial is necessary to settle disputes.
Spouses who are able to negotiate their agreements without having a judge make the decision for them can enjoy more control over the final distribution of assets. Reviewing financial records with one of our Michigan family law attorney can help those concerned about their financial stability during and after divorce more effectively navigate this challenging process.