Many millennials here in Texas and across the country watched their parents go through divorce and struggle with dividing their assets. For this reason, many millennial couples are more mindful of identifying separate versus community property when they marry. In fact, around 28% choose to keep separate financial accounts, believing they will remain 100% theirs in the event they divorce. The problem is that may not be true.
It is never wise to assume that a certain asset is separate property, even bank accounts, houses and other assets in one party’s name alone. As a community property state, Texas assumes all assets acquired and income earned during the marriage belongs to both parties. Simply putting money into a separate account does not guarantee a court will not consider it part of the marital estate and subject to division.
Even so, that does not mean couples should give up on having separate accounts. Keeping some money out of reach of the other party, even if only until a court rules otherwise, allows a individual easy access to the funds when needed, such as in the case of a divorce. With only joint accounts, one party could wipe out the account or attempt to deny the other access to it.
If a couple does divorce, the debate regarding separate versus community property will most likely begin right away. Overcoming the presumption that all of it is marital property could be complex in light of the circumstances. For some assets, it might take a great deal of evidence to convince a court either way depending on whether an individual is attempting to gain access to the asset, or keep it for him or herself.