The more assets people acquire during their marriages, the harder it can be for them to settle property division matters during divorce proceedings. Marital resources require division, and spouses often disagree about what they need to share and how to share those assets appropriately. The property division process is an emotional minefield, as people have intense reactions to dividing their resources and losing certain assets.
In Kentucky, the courts can equitably divide marital property if spouses don’t reach their own settlements. Spouses have to provide disclosures to each other and the courts identifying their marital property and also separate property that they believe should be exempt from the property division process. For examples, spouses may have funded their own retirement savings accounts or separate bank accounts during the marriage. Are those financial resources the separate property of one spouse?
The name on an account is not the deciding detail
Contrary to what people often assume, an account held in the name of one spouse is not automatically the separate property of that individual. In some cases, the account may be marital property. Other times, it may be partially marital property and partially separate property. Separate assets could include resources owned prior to marriage, gifts and assets inherited by one spouse.
Many financial accounts are in the pool of property that spouses need to divide. While spouses may sometimes start separate bank accounts specifically because they intend to file for divorce and need resources they can access, they generally still need to disclose any marital resources used to fund those accounts and then factor those funds into the final property division decisions.
If they can’t agree about what resources are separate and what are marital, the matter could go to trial. The courts look at several different factors, including when someone added funds to the account. Contributions made during the marriage are likely part of the marital estate. If someone started an account prior to marriage, only the deposits made before they officially wed remain their separate property, and even then, they may have been comingled somewhere along the way. Even an employer’s matching contributions made to retirement accounts could potentially be part of the marital estate.
At the end of the day, understanding the rules that differentiate marital and separate property may benefit those preparing for complex divorce proceedings in Kentucky. Seeking legal guidance is a good way to learn more.
