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High-net worth divorce: Separate account may not protect assets

On Behalf of | Jul 10, 2019 | Firm News, High-net Worth Divorce |

It is a natural consequence of the passage of time that current generations might do things differently than their ancestors. For instance, long ago, it was assumed that only men would leave their homes to go to work while women stayed home full time to raise their families. Nowadays, most households include dual income earners. Another way that times have changed is that many young spouses today keep their money in separate bank accounts; however, in a California high-net worth divorce, this might not protect their assets as they’d hoped.

While it might seem logical to assume that money deposited in a separate account belongs to the person whose name is on the account, in cases of divorce, especially in a community property state, this is not necessarily so. California happens to be one of nine community property states throughout the country. This means the court typically divides all marital property 50/50 in divorce.

It also means that all monies deposited into a bank account, or any account, during marriage are considered jointly owned assets in divorce. In short, even if only one spouse’s name is on a bank account, any money funding the account during marriage is considered marital property in divorce. This is why it is critical that couples planning to marry carefully research divorce laws beforehand to avoid potential problems if they decide to go their separate ways at some point.

A California high-net worth divorce can be complicated. It is helpful to sign a prenuptial agreement to establish separate ownership of a particular asset. A family law attorney can explain the process and provide guidance and support regarding any property-related legal obstacles that arise.