Separate bank accounts in a divorce: Things to keep in mind

Asset division is one of the most time-intensive and complicated aspects of divorce. If you’re considering divorce in Louisiana and have separate bank accounts from your spouse, it’s important to understand how they might be affected, especially if you and your spouse did not enter into a prenuptial agreement prior to marriage.

What does it mean to have separate bank accounts?

A joint bank account is held in both spouses’ names, whereas a separate account lists only one spouse’s name.

These accounts may be used as each couple sees fit—some choose to treat all of their finances as separate affairs, while others combine their finances and use joint accounts exclusively. In many cases, couples will use separate accounts only for specific expenses and maintain joint accounts for the rest.

Couples who choose to use separate accounts usually view the money in those accounts as separate personal property rather than shared marital assets. This arrangement may work fine during the marriage, but when these couples decide to part ways, they may be surprised to find out that the law doesn’t view it the same way.

How do separate bank accounts work in Louisiana divorce cases?

In the state of Louisiana, all assets and debts acquired during a marriage are considered community property, regardless of how they’re titled or whose name is listed on them.

Community property, also called “marital property,” is subject to equal division during a divorce. This includes bank accounts held in one party’s sole name unless it qualifies as true separate property.

How courts decide which bank accounts should be treated as community property

When determining which bank accounts should be treated as community property, the court will largely consider the timing of when a separate bank account was opened.

Account opened while legally married

If the separate account was opened while the couple was legally married, the money in it will be considered community property and subject to 50/50 division.

This applies even if only one spouse’s name is listed on the account and even if only one spouse ever had any involvement in using it. For example, earnings are considered community property, so even if a spouse puts their paycheck into an account in only their name, it doesn’t make the contents of the account separate property.

Account opened before the marriage

On the other hand, if the separate account was opened before the marriage, it will usually be considered separate property. In this case, the spouse who opened the account will be entitled to keep all of its contents.

However, this rule isn’t absolute. The court may occasionally choose to label this type of account either wholly or partially as community property if the other spouse contributed to it in some way during the marriage.

Are you required to disclose separate bank accounts?

Sometimes, a separate account holder may choose to keep the existence of one or more accounts secret from their spouse during the marriage. This could be because they want to indulge in certain habits without having to account for the expenses or simply because they want to maintain complete control over their finances.

While there’s nothing in the law prohibiting this type of behavior during the marriage, it must come to an end when it’s time to begin the divorce process. During a divorce in Louisiana, both spouses are required to disclose all assets. This includes separate bank accounts — even those that were opened before the marriage.

The Louisiana family court system doesn’t take kindly to spouses who fail to disclose assets. If the court discovers a hidden account, it may choose to penalize the offending spouse by awarding a greater portion of assets to their former partner, among other penalties.

Things to keep in mind before entering a divorce with separate bank accounts

Entering a divorce with separate bank accounts can be risky, even if the other spouse is aware of them. You may have worked hard to maintain control over your money throughout the marriage, but there’s no guarantee that you’ll be able to keep it in the end. For this reason, keep the following in mind as you navigate the situation.

Respectful discussion with your ex is recommended

Whenever possible, you should attempt to reach an agreement with your former partner outside of the courtroom. You and your spouse have a right to negotiate a settlement without the court’s involvement, and this could be an opportunity to protect your hard-earned money.

Settlements agreed upon outside of the courtroom aren’t subject to the same rules as those decided by a judge. This means that you and your spouse can come up with a solution that works for both of you.

For example, you could agree to keep your independent accounts separate, with each party keeping the money in their respective accounts. If this isn’t an option, you could also negotiate an arrangement where one spouse keeps certain assets in exchange for other assets — such as a car for an equal amount of cash, for instance.

Learn more from our skilled Lake Charles divorce attorneys

There are no guarantees when it comes to handling separate bank accounts during a divorce. Every case is different, and the outcome depends on the specifics of your situation, including the willingness of both parties to come to an agreement without court intervention.

Facing a divorce and wanting to know more about separate bank accounts? Our divorce attorney in Lake Charles can provide you with personalized guidance and representation. Give The Johnson Firm a call at (337) 433-1414 to schedule a consultation.