Many Chicago couples use different forms of asset management during their marriage to increase their income and start building nest eggs. However, when it comes time for a divorce, asset management can backfire.
What are the rules about how assets are split?
Largely, how assets are split comes down to the category they fall under. In divorce, assets will usually fall under one of two categories:
- Joint assets, which is money and investments that were earned and/or used by both people in the marriage for their life together
- Separate assets, which is money that was acquired before the marriage or gifted/used by just one of the parties.
When will separate assets be kept out of the divorce?
Separate assets are usually things like retirement accounts, investments and other financial assets that were gifted or earned by one sole person. However, money and assets earned or given to one person can still be used to support both people in the marriage.
Many people might try to make the argument that if the separate assets were used to support the family’s lifestyle or financial needs, they should be split in the divorce. This can be true if the family really was using separate assets to support themselves and their family.
If you use separate assets to pay for joint belongings and shared households, or you give your spouse access to these accounts, it can become “matrimonial-ized.” In other words, the asset goes from “yours” to “ours.”
How to keep your assets separate
If you want to keep your assets separate from the marriage, it’s important to not mingle them with joint finances or give your spouse access. There are plenty of financial tools to help keep assets separate and safe in a divorce.