separating finances

[Wild Lupine]

Long, complicated situation, short post:

Is there any way for spouses to legally separate finances without actually divorcing? If so can one spouse initiate this, or does it need to be mutual?

Please no judgments on this question, it is arising from a highly complicated situation. I'm just looking for info or sources of info. Thanks!

[Maluhia]

You can each have your own individual accounts at the same bank and have one (empty) joint account you use to pass money back and forth.  In addition you can file taxes Married Filing Seperate and give instructions to your bank NOT to allow your spouse access to your individual account.  You would still, if you divorced in the future, have to declare this financial activity, but you can certainly create your own account and file your own taxes (ideally file first) if you so choose. 

[chicasmama]

Your other option is a post nuptial agreement. This would require both of you to be in agreement of said arrangement, and have it drafted by a lawyer. It would keep things separate even if you do choose to divorce. 

[JesKace]

Are you trying to do this without his knowledge to keep money from him touching, or just don't want to have to go through the work of the divorce? 

I ask because a friend of DH's wife just told him that she wants to file for separation so that way she can collect child support from him, and collect from the state since she won't have his income anymore (he works and makes all the money, she's a SAHM, but they've been living apart for 6 months or so and he's been paying for all of it).  I think she thinks she's going to get away with getting more money from him than she does now, which isn't possible since she currently gets it all.... Anyways, I'm assuming if you file for separation then the finances would separate also, but you don't have to go through the mess of an actual "divorce"  If you're trying to do this without his knowledge and just separate the finances so that way he can't touch money you're putting aside, then that obviously won't work.

I've never been through any of it before (separation or divorce) so I don't know the actual rules or anything, but as far as I know, people can be separated for years and have totally separate lives financially without actually ever divorcing.

If you're looking to just hide some money away, I'd think you could open a bank acct in your name only and not allow him access to it.  But if you did divorce I think that money is fair game to him so you may lose half of it depending on how things are settled.

[crazyms]

Well I am married and have found that even being married doesn't allow each other access to the other's financial aspects without marriage. To explain when dh and I had credit cards I couldn't call and find out about his balance etc. without his permission until I had him call and give me access to the information. I also couldn't get money out of his checking account, make changes to it or get information on it (other than using his debit card or making a deposit for him) without my name being on the account as well. If you want to separate finances then I would suggest starting with separate checking accounts. The spouse can't access this unless you allow it. You can also file taxes separately and do a post nuptial agreement if you feel it's needed as suggested above. If you are just trying to keep your money separate (where the other can't access it) then you can open a personal checking account, credit card, etc. without the other spouse having any involvement. A post nuptial would require mutual agreement and I have no experience with that. The separate accounts would keep the other spouse from assessing the money now but it would all have to be claimed in divorce proceedings if it came to that. It may be a good idea to find out what a non contested divorce requires in your state to prepare for it if you think that may be a future possibility. In my state you can file uncontested (both parties agree to it, no fault) yourself. It includes the divorce agreement with property settlement/child support & visitation agreement and financial documents if you have children or are going for marital support. The financial documents can be picked up for free at the local courthouse. If it is similar in your state then getting a copy of those financial documents may help you see what is involved and what has to be claimed for the divorce. That may be helpful. I hope this helps as I'm not sure if I'm answering the question right.

[bobandjess99]

My state allows for a legal separation.  You go through the process sort of like divorce, but at the end, you are declared legally separated, as opposed to divorced.  It's valid for up to one year.  It's supposed to give you time to decide if you want to divorce or stay together, but it gives you autonomy and some legal freedom during that time.   It is not a long-term status. 

[frugalmum]

Of course you can separate finances, at least to a degree.  If you have a joint account, withdraw half and put it in your own account.  He will not be legally able to touch your account.

But if you are both on a mortgage, the house would have to be refinanced for only one of your names to be on the loan.  I'm not sure about joint credit cards, how you could remove yourself from that or at least close the account so that he could not rack up more charges.  But of course you can have your own credit card that he cannot legally use.

If you could be a little more specific on what you want to separate you might get better advice.

[Wild Lupine]

Originally Posted by frugalmum 

If you could be a little more specific on what you want to separate you might get better advice.

Thank you all. It's a relief to know that not everything that is 'mine' is necessarily 'ours.'

In a nutshell, when we first got married our bank accounts were separate. Several years into our marriage we merged finances. I'm not thrilled with how he manages money and it's been really hard - impossible - to do any saving. He didn't have any when we got married and I've watched mine dwindle. I need to be able to save money, which I am not going to be able to do if we keep our finances merged. It'll just end up as an iPad or whatever the latest techno thing is. (At least its not booze, but techno-lust is its sort of own addiction.)

I also want to make sure my IRA stays intact. Sometimes DH talks about it like its a savings account, a fall back in case we run out of money. It's mine, from my job, and I plan to use it when I retire.

So it sounds like as long as my IRA is in my name only, and any savings account I set up in my name only could only be accessed by me, correct?

I've heard vague rumblings about community property states. Does that have anything to do with this?

[A&A]

It depends on how much you've mixed your finances already.  If you have joint loans (mortgages, car loans), then it's much harder for just one person to assume those loans.  If you have joint credit cards, you can cancel those and reapply in your name only. 

[GirlBoyGirl]

So it sounds like as long as my IRA is in my name only, and any savings account I set up in my name only could only be accessed by me, correct?

I was under the impression that any money or anything acquired/earned while married is joint property... I could be wrong. What about the post nuptial agreement that someone mentioned?

[Smithie]

If you are not actually planning on a divorce, then opening up a separate savings account is probably going to solve your problem. You need to be forthright about why you're doing it, and accept that you will lost half of it in the event of a divorce. 

WRT your IRA, I was told by the lawyer doing our wills to assume that all our retirement accounts would be split 50/50 if we divorced. But we were young and had not started these accounts prior to our marriage, so maybe you would be able to keep 100% of the portion you put in before marriage? This probably varies state to state. If it's bothering you, ask a lawyer. But what will REALLY solve the problem is to say, "No, DH, we are never taking money out of my IRA for any reason. Never ever ever. Don't mention it again, it makes me angry." 

[spedteacher30]

retirement accounts are joint property in a divorce, but only the person whose name is on it can access it for a withdrawal--especially now. He can't take money from your retirement account tomorrow to purchase a new flat screen TV. But, if you divorce, he will be given half of what has accrued in your retirement account while married.

[EmsMom]

I am in the process of divorcing in NJ, not a community property state.  My marital share of my husband's retirement accounts/pension is calculated only on what was put in during our years of marriage and that money's growth.  All assets acquired during marriage are split 50/50 (debts as well, of course, but we didn't have any.)  If assets were comingled in any way (bank accounts merged, etc.) then anything merged is 50/50.  I believe that goes for debt as well.  If his name is not on your retirement account, he should not be able to access it.  If you have children and want to make them beneficiaries instead of your husband, you could appoint someone else to hold the money in trust for them.  You can separate your finances to a degree, but in the event of a divorce, anything acquired during the marriage is split.  However, if it is an inheritance just to you, then if you keep it completely separate (don't put the money into your account even for a day), I believe in this state, that is not considered marital property.  Laws very state to state.  You should probably speak to an attorney or an accountant to get appropriate advice.

[hillymum]

If you are thinking of splitting finances now with the thought that divorce is in your future at any point then cash in a deposit box is your best bet. A friends sbxh had a safety deposit box full of cash which my friend can not prove at all so she's totally out of luck getting any of it.

[Wild Lupine]

Originally Posted by Smithie But what will REALLY solve the problem is to say, "No, DH, we are never taking money out of my IRA for any reason. Never ever ever. Don't mention it again, it makes me angry." 

Thanks, the information is helpful. But I'm laughing at this last bit... if a clearly stated sentence or two could solve my problems I would have a lot fewer posts here on MDC. Or maybe they'd be about very different topics!

Originally Posted by spedteacher30 

retirement accounts are joint property in a divorce, but only the person whose name is on it can access it for a withdrawal--especially now. He can't take money from your retirement account tomorrow to purchase a new flat screen TV. But, if you divorce, he will be given half of what has accrued in your retirement account while married.

This is what I was thinking. Good news/bad news.

Originally Posted by hillymum 

If you are thinking of splitting finances now with the thought that divorce is in your future at any point then cash in a deposit box is your best bet. A friends sbxh had a safety deposit box full of cash which my friend can not prove at all so she's totally out of luck getting any of it.

I'm assuming a safety deposit box in a bank would be provable, so this would be an actual locked fireproof box hidden away somewhere, not in a bank?

[JesKace]

Originally Posted by hillymum 

If you are thinking of splitting finances now with the thought that divorce is in your future at any point then cash in a deposit box is your best bet. A friends sbxh had a safety deposit box full of cash which my friend can not prove at all so she's totally out of luck getting any of it.

I'm assuming a safety deposit box in a bank would be provable, so this would be an actual locked fireproof box hidden away somewhere, not in a bank?

I think what she meant is that the safety deposit box is provable and it would have to be listed in the divorce, but the contents of it aren't provable.  In the event of the divorce if you were to claim the contents of the box you could take all your cash out leave a $50 bill inside and say that is all that was in there.  Keeping the rest of the cash for yourself.  The bank doesn't keep account of what is put in/taken out of the box.  The only drawback is the cash that is put in there isn't going to gain you any interest.  But if you were really worried about losing half the money, losing a little bit of interest probably isn't such a big deal :)

[Smithie]

If I were actually thinking of divorce and the 50/50 split struck me as hugely unjust for any reason, I'd give cash to a friend or relative to hold onto. Because at that point I'd be so ticked off that I'd rather have that person steal it from me than my STBX steal it "legally." And completely aside from the 50/50 issue, I'd worry about our household accounts being drained or frozen, and would want survival funds in place to get through any flagrant UAV behavior at the beginning of the divorce process. 

[SleeplessMommy]

In the event of divorce, non-financial assets are also split up. So you could offer your husband "custody" of the large-screen tv, the better car, the ipad, whatever in exchange for keeping a larger share of your IRA. It could be significant when you add up every game, dvd, toy, etc he has purchased and make that part of the divorce settlement. If you own a home together, you can also "win" by generously giving him the house and its equity. (homes being very hard to sell these days)

Giving $$ to a friend or relative for storage sounds like a risky move. I would not consider it.

Even if you are staying together, for the long term, you should see a lawyer for specific advice about your state. (Some people have been known to relocate to a better state, then divorce.This especially happens in the EU where alimony laws vary greatly by country.) Don't give him a penny from your IRA. And keep putting money in for YOUR retirement.

[Wild Lupine]

Good point, I hadn't thought of that.
 

Originally Posted by SleeplessMommy 

In the event of divorce, non-financial assets are also split up. So you could offer your husband "custody" of the large-screen tv, the better car, the ipad, whatever in exchange for keeping a larger share of your IRA. It could be significant when you add up every game, dvd, toy, etc he has purchased and make that part of the divorce settlement.

[Usually Curious]

Originally Posted by Smithie 

If I were actually thinking of divorce and the 50/50 split struck me as hugely unjust for any reason, I'd give cash to a friend or relative to hold onto. Because at that point I'd be so ticked off that I'd rather have that person steal it from me than my STBX steal it "legally." And completely aside from the 50/50 issue, I'd worry about our household accounts being drained or frozen, and would want survival funds in place to get through any flagrant UAV behavior at the beginning of the divorce process. 

i think this is illegal ...