What if we’ve kept accounts separate during our VA marriage?

Posted on Oct 22, 2021 by Katie Carter

A few weeks ago, I saw a Dave Ramsey post on social media that said, “A marriage without shared money and goals is just a joint venture.”

That may make you feel a couple different kind of ways. Now, let me preface this with a statement: I’m assuming that, if you’ve found your way to me, you’re not exactly happily married. Nothing that I write here, on this page, applies to happily married people. Although, I will say that, if you ARE happy, then who the heck cares whether Dave Ramsey likes your financial arrangement?

If you’re NOT happy, though, regardless of whether you’ve kept your money and/or your goals separate or shared, there’s still plenty of good news here. You see, the thing is, divorce – the actual process of divorce – is designed to protect the parties involved. I would venture to say that, regardless of how you’ve set up your finances, whether separate or joint, you’re not on a ‘joint venture’ because of the protections the law allows.

Divorce means that one of you can’t get rid of the other without giving that other spouse his or her share. I am tempted to say ‘fair’ but I’m also hesitant to call it a fair share, because fairness is not objective. It’s completely subjective, and I don’t want you to get your brain all wrapped up in an abstract idea of what fairness would mean or might look like to you. To quote the law, a better word would probably be equitable, rather than fair.

Divorce is especially a protection for a lesser earning spouse. Having separate accounts and money might have made things less equitable DURING the marriage – as in, if he had access to more money he had the power to spend more money, leaving you to exist with less. It might also make things more difficult from an accounting perspective during your divorce, but, then again, that’s what discovery is for.

From a divorce perspective, though, there are some things wrong with Dave Ramsey’s statement, at least in Virginia.

In Virginia, marital assets are marital regardless of how they’re titled. So it doesn’t matter whether the house, the car, or the bank accounts is in his or your separate or sole name. What matters is (1) when the asset was earned, purchased or acquired (like, was it during the marriage?), and (2) how it was paid for (was it with marital money?).

The way we look at property in Virginia, we divide it into three categories: (1) marital, (2) separate, and (3) hybrid.

Marital property is anything that was earned, purchased, or otherwise acquired during the marriage, regardless of title. Separate property, on the other hand, is anything that was earned, purchased, or acquired BEFORE the marriage, AFTER separation, or anything gifted to or inherited solely by one spouse or the other, whether before, during, or after the marriage. Hybrid property is combination property – like a house that was purchased BEFORE the marriage, but then mortgage payments were made from joint funds after the marriage.

Marital money, just so we’re clear, is whatever you earned at your jobs during the marriage, regardless of whether it was placed in a separate or joint account.

Like I said, it can get a little tricky from an accounting perspective – if its in a separate account that you’ve never had access to, you might not know what’s there to divide. If he’s not willing to be forthcoming about it, you may have no choice other than to file for a contested divorce and propound discovery. But, that’s an obstacle that can be overcome (albeit a somewhat expensive one).

So, retirement earned during the course of the marriage, money earned from a paycheck during the marriage, mortgage premiums paid during the marriage, etc., all work towards the same thing: marital property that is subject to division in the divorce.

Not only that, but your separate incomes – especially if there is a disparity there – will also inform a conversation about spousal support. So, even if your money was separate and has always been separate (I use the word ‘separate’ in a colloquial sense, not in a legal sense – just to be clear), the fact that he makes significantly more than you is a factor that we’d consider when it comes to spousal support. He may find that, even IF the bank accounts were always his and hers and never commingled, that he has to pay you support for a period of time after your divorce is finalized.

How’s that for separate?

Are there ways he could avoid giving you your marital share?

Yes, of course, if he’s savvy, and let’s just assume that he is. There’s a lot more to say about savvy people than not savvy people.

Technically, you could have given up your right to receive any interest in the marital assets if you signed a prenuptial agreement. There’s this general misconception that I’ve come across time and time again that prenuptial agreements are used to protect what a person comes into the marriage with. In Virginia, we already classify that kind of property as separate, and that stays the sole and separate property of the spouse who brought it into the marriage.
The real purpose of a prenuptial agreement is to alter the way the law divides things that the other spouse would have been entitled to under the law – like spousal support, division of retirement assets, etc.

A prenup doesn’t have to be a nefarious thing, but I often find that it is. I find that, once the prenup is introduced, the lesser earning spouse is in a terrible position – accept the terms, or walk away. In my experience, it’s not a tool used between people with equal bargaining power. A prenuptial agreement may be smart or savvy if you’re Beyonce or Jay Z, or Blake Lively and Ryan Reynolds, or George and Amal Clooney. But that’s not what I see, in my regular, day to day practice. It’s a richer person and a less rich person, and the less rich person is usually shocked and overwhelmed, and in absolutely no position to negotiate.
It’s either this – or nothing. And ‘this’ often means waiving a right to spousal support, to division of retirement assets, and everything else that she would otherwise have been entitled to receive by virtue of her marriage.

There’s another way, too, that you could waive your entitlement to what the law has provided for you. If you sign an agreement (like a prenuptial agreement, but AFTER your marriage) waiving your right to receive certain things, that’s going to hold up, too.

You need to be careful signing anything, and always work with an attorney if you have questions.

I don’t agree with Dave Ramsey on this one. It’s not a ‘joint venture’ if you don’t share your accounts, because the law provides otherwise. I think what he means is less about what happens in terms of the divorce and what it means for an overall marriage, but, for my purposes, an overall marriage is almost always an already broken one.

I say this to tell you that, if you’re afraid for your entitlement to what was earned, especially if he was the higher earner – don’t be. We’ll work this out. For more information or to schedule an appointment with one of our licensed and experienced Virginia divorce attorneys, give our office a call at 757-425-5200.