Will having separate bank accounts protect you in divorce?

Unlike most married couples, you and your spouse have separate bank accounts. Now that you and your husband or wife have decided to divorce, you wonder if your unconventional approach to marital finances may speed up your split, allowing you to start the next phase of your life sooner.

CNBC Make It notes that such an approach does not always make the asset division process of divorce easier.

Equitable distribution

Florida operates under equitable distribution laws. That means that anything you earned during the marriage is yours. That said, there is no guarantee that your spouse cannot convince a judge that all of your assets are marital property. Additionally, a judge may decide to use your separate assets to fund your divorce settlement.

Access to money 

This is not to say that having and maintaining separate bank accounts during divorce is without its advantages. One good thing is that your having a separate account gives you quick and easy access to your own funds should you need them during your divorce. Your spouse may decide to limit access to a joint fund, which could make it difficult for you to buy whatever you need to move on with your life.

Additional protective measures 

To better protect yourself and your finances during divorce, consider printing out financial statements for the month before you married your spouse. This makes it clear what you brought into the marriage and how to properly divide assets.

Maintaining a separate bank account during your marriage may not offer you the protection you think it may during divorce, but it is not entirely futile.

What are the benefits of shared child custody?

A divorced family has unique dynamics. When child custody is part of the divorce, the child’s best interests must be a consideration. There is no one-size-fits-all child custody solution. 

From a legal perspective, there are two basic categories of joint custody. Mutually agreeable variations that fit individual lifestyles are valid options for success. 

Sole physical and joint legal custody 

This arrangement places a child in one primary residence. This is a custody option that works when both parents remain active in a child’s upbringing. Major life decisions, such as changing schools, remain a mutual decision. In some instances, one parent may have more authority. The open-door approach to parenting is always best in this arrangement. 

Joint physical and joint legal custody 

As the title implies, this arrangement provides a child with two residences. For this arrangement to be successful, parents must live within a close distance. Fluid, non-emotional communication is a key component in joint physical custody. This includes working with established schedules and remaining flexible when required. Mutual joint custody presents challenges to a child’s routine. Unity in basic rules, such as bedtime and study habits, provide a solid foundation for a child. 

Key points to consider 

Adjusting to life after divorce is usually the most difficult for a child. Children rarely see divorce as a solution and are often unaware that it is a consideration. Successful co-parenting relies on common sense and unity, including: 

  • Predetermine schedules with mutual commitment to adherence.  
  • Remain flexible to fill in gaps for the other parent when needed. 
  • Keep open communication without emotional drama. 
  • Accept the other parent’s influence on a child. 
  • Defer major decisions for open discussion. 
  • Avoid arguing in front of a child. 

Children are most vulnerable after a divorce. Working together to make key decisions offers a child positive reassurance. A custody decision that keeps both parents involved in a child’s life after divorce is best. There are lifelong benefits to gain from a stable living arrangement that exists well after the ink is dry on the divorce decree. 

Is collaborative divorce less time-consuming?

When you think about the benefits of collaborative divorce, you likely realize the emotional advantages of taking this route. When couples work together to bring their marriage to an end in an amicable manner, it is very possible that they will reduce the emotional toll of the divorce process, which is especially important if you have kids. For example, couples will probably have less stress and some of the hardships associated with litigation (such as threats, grudges, resentment and so on) are likely considerably lower (or nonexistent). However, if you wonder whether the collaborative process is advantageous in terms of time, it is important to examine the benefits of this route in this regard as well. 

According to the New York State Unified Court System, many couples find that the collaborative process is more efficient when compared to a typical divorce. First of all, it is imperative to note that every divorce is unique and some are time-consuming regardless of the approach that is taken. However, when couples work together during a collaborative divorce the process is often more straightforward. Moreover, couples often avoid a string of court appointments, which could save you a considerable amount of time. 

If you are thinking about a collaborative divorce, you need to assess your own circumstances and determine if this strategy is a smart move. Sometimes, the collaborative process is not an option and many people are unable to have positive or useful communication with their ex.

What is the best way to divide a 401K?

Dividing your assets during your divorce in Florida is often one of the most difficult processes. You need to come up with valuation for all marital property and reach an agreement that the court will find to be fair and equal. This can take a lot of work, especially if you have difficult assets to divide. Often retirement accounts may pose an issue, but if you have a 401k, you will discover that it actually makes division rather easy. 

Forbes explains that a 401k has a daily cash value. This means that you can easily determine the valuation, which is often a tricky part of dividing retirement accounts. You also have the option to divide a 401k in any way that you want without a lot of restrictions. 

One of the best things about a 401k is that as a spouse, you can roll over any 401k funds from your spouse to another 401k without any penalties. This can save you a lot on taxes. Another way to avoid taxes but that allows you to take the money out of the account is with a Qualified Domestic Relations Order. A QDRO lets you avoid taxes if you withdraw the money before the age of 59 1/2. 

Do note, though, that even withdrawing through the QDRO, you will still have to pay income taxes on the money. You only avoid the tax penalty for an early withdrawal. So, the best option to maximize the money is probably to roll it over into your own account. 

What are the benefits of divorce mediation?

While going through a divorce can be difficult and emotional, approaching the situation with a team mindset can help simplify the process. Mediation is the perfect route for those interested in working together to create a divorce settlement that is beneficial for everyone involved. Couples should come to the table prepared to disclose all information necessary to design a concise settlement.

Mediation offers many benefits when compared to other types of divorce resolution, such as traditional court litigation. According to the American Bar Association, these benefits include the following:

  • Less expensive, as couples can avoid court costs
  • Quicker, as couples are often able to schedule mediation sessions around their other engagements rather than wait for lengthy court dates
  • Non-confrontational, as meetings take place out of court in a laid back atmosphere
  • Private, as court cases are public record and mediation is confidential

Couples often choose mediation because it puts them in charge of their own divorce settlement. Rather than leave the details of the decree up to the discretion of a judge, you get to write a settlement that works best for your unique situation. Settlements created through mediation have a higher rate of compliance, as people are more likely to follow terms they created.

People often leave the divorce with a more positive relationship than they would have if they had gone through litigation. This is especially true for parents or business partners who must interact with one another even after the divorce. This relationship can have a positive influence on children going through the divorce.

This information is intended to educate and should not be taken as legal advice.