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What Will Happen to My Bank Accounts in My Divorce?

by | Feb 11, 2020 | marital property, News and Events

In the event of a divorce on Long Island, all of a couple’s assets, property, and debts are divided between them in a process known as Equitable Distribution. Under New York law, this is done equitably, meaning fair but not necessarily equal. Here’s what you need to know about what may happen to your bank accounts after your divorce and how to get legal help to protect your financial assets as you dissolve your marriage.

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Marital Property vs. Separate Property

Liquid assets in bank accounts are treated like all other property in the marriage under equitable distribution laws. However, only marital property can be distributed in this manner; separate property remains with the individual to whom it belongs.

Marital Property

Marital property is property that the couple acquired during the marriage, regardless of whose name the assets are in. If the spouse that manages the money opens a savings account in their name and begins to add to it with earnings from either spouse during the marriage, those funds then become marital property.

In some cases, if the money was strictly gifted to the spouse who opened the account and no evidence of comingling exists, a judge may decide to treat the account like separate property. However, there’s a chance that if marital funds (including money earned only by the account owner) were deposited into the account or money in the account was used to purchase marital property, a judge will consider the account marital property.

Separate Property

Separate property is any property that one spouse owned prior to the union, or property they brought into the marriage. For example, if one spouse came into the marriage with a certificate of deposit worth $500,000 gifted from their parents, it would be awarded only to that spouse upon the divorce instead of distributed equitably between the two spouses. Funds in an account intended specifically for one spouse, such as money from an inheritance or personal injury settlement, are also typically treated as separate property.

What Is Comingling?

Unfortunately, not all assets are clearly identifiable as marital or separate property. This is called comingling, when separate and marital assets are blended together. For example, if one spouse brings an account worth $8,000 to the marriage and adds their spouse’s name to the account, and then both spouses use the account to make purchases and deposits, this would be considered “comingled.”

Originally separate property may be considered marital property if it has been sufficiently comingled. Or, if the account currently stands at $10,000, a judge may award $8,000 to the spouse who brought the account into the marriage and the remaining $2,000 may be split between the two spouses.

How to Keep Your Bank Accounts Separate

Whether you’re entering into a marriage, gearing up for a divorce, or simply want to protect yourself financially as much as possible, it’s important to take steps to keep your bank accounts separate from the accounts of your spouse.

Make sure your account:

  • Is in your name only
  • Is not used to fund marital purchases
  • Does not receive deposits from marital funds, including wages earned only by the account owner (wages earned during the marriage by either spouse are considered marital property)
  • A gift in the name of both spouses cannot be deposited into the separate account

Keep detailed financial records from bank accounts you had prior to your marriage, during, and after. Make sure they are current and stored in a safe place only you can access.

Protect Your Assets with the Help of a Long Island Divorce Lawyer

If you’re involved in the process of getting a divorce, how a judge looks at your property can determine what you ultimately walk away with after the divorce has been finalized. An experienced divorce attorney can help you present a strong case for the awarding of separate property that rightfully belongs to you.

If you’re considering getting a divorce and want to know how to best position your assets prior to filing, your divorce lawyer can also help. Moving money around just before filing is tricky and often considered hiding assets, which isn’t allowed. Get the guidance of an experienced Long Island divorce attorney at Hornberger Verbitsky, P.C. to ensure your assets are protected before, during, and after your divorce. Contact us today for a consultation at 631-923-1910.

For more information about Property Division in your divorce, visit our Complete Guide to Dividing Property in Divorce.


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