Many married people think that what they earn is their separate property. This is especially true if their income goes directly into a separate bank account under their name only. However, marriage doesn’t work that way. It’s an economic partnership and each spouse has a right to 100 percent of the other spouse’s earnings during marriage.
Right to Income During Marriage
When you’re married, you have a right to your spouse’s earnings and vice versa. Both of you also have an obligation to support each other. A spouse who doesn’t work is entitled to support because the spouse is still providing indirect financial benefits to the other spouse such as taking care of the home, children or other responsibilities. While couples are free to decide to maintain separate bank accounts, it doesn’t change the law.
The law does change once a divorce action is filed.
Right to Income After Filing for Divorce
Upon filing a divorce action, there is no longer a right to the other spouse’s income. Earnings become “separate property.” Separate property is property acquired before the parties’ wedding date, after filing for divorce, or through inheritance or a gift made directly to a party during the marriage provided it remains titled solely in that party’s name.
As separate property, this income is not subject to equitable distribution unless it is converted into marital property. Examples of this would be if the earnings were deposited into a joint bank account or used to pay marital expenses.
Notably, while each spouse is responsible for his or her own expenses during the divorce, both spouses are responsible for paying expenses related to maintaining marital property (ex. mortgage and maintenance on the marital home). Further, there is still an obligation to support each other. The lesser-earning spouse is entitled to spousal support while the divorce action is pending.
Keeping Earnings Separate During Marriage
During marriage, couples should discuss how they will save and spend money even if they keep separate accounts. The reason is that if one side is a saver and the other is a spender, the saver will have to pay over half of the savings if divorce occurs. Planning as a couple is crucial, even if each spouse agrees that they can spend their earnings any way they want.
If spouses want to have their individual incomes treated as separate property, they must sign a prenuptial or postnuptial agreement which must clearly indicate that earnings are separate property.
Marriage is an economic relationship as well as a romantic one. Thus, couples should ensure they agree on how they will handle their finances. This will help minimize conflicts during marriage and if they get divorced.
If you are considering a divorce, contact us for a consultation. We can help you address financial issues and get a positive result in your divorce.
