How Do I Stop Co-mingling Assets And Funds If I Plan To File For A Divorce?
A spouse can stop comingling assets with their spouse, but they should understand that this will not necessarily mean that those assets will stop being marital. For example, a spouse can start depositing their funds into their own account rather than a joint account, but this will not mean that their spouse is not necessarily entitled to a portion of those funds in the event of a future divorce. Until a divorce is filed or a separation agreement signed, each spouse is entitled to a share of the assets acquired, regardless of whose name those assets are in. There are exceptions to that rule, such as gifts that do not come from the other spouse. For example, if one spouse’s family member gave them $10,000, and that spouse put it in an account that was in their sole name and that contained no other funds, then it would remain their separate property. The same is true for inheritances and personal injury awards. However, earnings from employment will be considered marital, even if those earnings are put in a separate account or a safe deposit box.
What Property Will Be Considered Separate Versus Marital, And What Can I Do To Be Sure That My Separate Property Is Considered Separate?
Separate property includes those items that one spouse owned prior to the marriage. The increase in value of a separate property during the marriage can sometimes be protected, depending on the facts and circumstances. Inheritances, gifts from those other than the spouse that were made before or during the marriage, and personal injury awards are examples of separate property.
Separate property can be converted to marital property quite easily by co-mingling it with marital property. This is why any gift of money or inheritance should be put in an account by itself; it should not be comingled with the party’s own earnings, even if placed in an account that is solely in their name. For example, if one spouse deposits a $10,000 gift into an account where they also put their weekly earnings and pay bills, then it is going to be impossible to later determine what part of the account represents the $10,000 gift, and what part of the account represents the earnings. Under such circumstances, it is unlikely the $10,000 gift would remain separate property.
If one spouse used a personal injury award of $10,000 to invest in a marital asset such as a down payment on a house that is in both names, they may very well get credit for the separate property investment later, but it is better to keep an asset in one’s sole name. For example, if the house was only in the spouse’s name who invested the down payment from a personal injury award, then they may very well get credit for 100 percent of that down payment, but not comingling is always the best thing to do, especially in terms of bank accounts.
Are There Any Ways To Prevent A Pre-Divorce Spending Spree By My Spouse?
To try to protect against a pre-divorce spending spree by the other spouse, it can be helpful to separate the funds as much as possible, such as by not depositing funds into joint accounts. It would be wise to speak with an attorney about whether to withdraw money from joint accounts and deposit the funds into a separate account. However, until the divorce has been filed for or the spouses have signed a separation agreement, everything that is done is presumed to be marital.
If a person’s spouse is running up debt or spending money, they need to talk to an attorney about whether to commence the divorce action so they are no longer responsible for that debt. It can be difficult to fully protect oneself against a spending spree by the other spouse because the other spouse cannot be stopped from using their own credit cards. This may necessitate the filing of a divorce; once a divorce has been filed for, the charges the other spouse makes are their own responsibility.
Can I Protect Myself From The Debts That My Spouse Accrued On Their During the Marriage?
Generally speaking, the presumption is that all the debts that accrued during the marriage were for marital purposes until a spouse proves otherwise. This means that even if a spouse didn’t know about credit card debt, it is subject to being distributed in the divorce, meaning it will be the responsibility of both spouses. However, this may not be the case if one spouse can prove that the debt was not for marital purposes. With that said, very few things qualify as being not for marital purposes. A court may determine debts associated with crimes, addictions, or affairs are not for marital purposes. For example, if it can be proven a debt was the result of one spouse’s gambling addiction or a credit card charge was for a hotel room related to an affair, then the innocent spouse may be able to avoid liability for that debt.
Unfortunately, spending on clothes and other similar items, even if they seem unnecessary, will be the responsibility of both spouses. This is true even if the debt was accrued solely in one spouse’s name. If one spouse doesn’t earn a lot of money and there aren’t other assets that can cover the debt, it can be very difficult to enforce an order for a spouse to pay half of the debt. New York State is an equitable state, which means debts can be distributed at whatever percentages are deemed appropriate by the court. However, debts (and assets) are generally distributed fifty-fifty.
For more information on Co-mingling Assets And Funds In A NY Divorce, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (585) 449-4987 today.