My head is spinning right now after researching this question. It’s quite a doozy. And I don’t use the word ‘doozy’ very often.

Writing the opposite article about whether you’re liable for your spouse’s debt was a much easier undertaking. The answers were wayyy simpler. I had no idea what I was getting into with this one. But I feel like it’s very important for those of us in our thirties, since many people I know are getting married or about to get married around this time.

So here goes: I’m going to use my very best simplification skills in order to make this as understandable as possible.

First, I want to preface strongly that I’m not a Financial Advisor, so this is a vast simplification. If you are truly worried about your assets being shared with your spouse, please contact a Certified Financial Planner. Here’s a website that will help you find one.

Second, Okay, so let’s repeat the question in its simplest state:

If I have an inheritance, a savings account, monetary gifts from my dear Aunt Myrna (all of these things are known as ASSETS) does my spouse automatically get half (or any of it) when I get married?

When I started researching this, almost every article I came across was actually about divorce. I couldn’t figure it out at first, and then it hit me: none of this asset stuff is really relevant legally unless you get divorced.

This actually means: Other than if you get divorced (and hopefully you will not), you won’t ever legally be forced to share your savings, retirement accounts and inheritance with your spouse. Not really. You will probably want to share some (or most) of it, but that’s between the two of you. 

Think about it: If you don’t want to share your savings or inheritance with your husband or wife, there’s no lawyer/judge/policeman/masked villain who’s going to suddenly barge into your house and FORCE you to share your savings with your spouse…I mean, unless your spouse sues you or something (and honestly, that’s the road to divorce right there), sharing money within a marriage is kind of a private matter…a verbal agreement between two spouses. I mean, you guys can fight it out amongst yourselves (a civil conversation is also an option), but no one from the legal system will get involved. Of course, you two are building a life together so you may want to commingle (share) money (The word ‘commingling’ is actually an important one. I will come back to the whole commingling money issue in just a bit, as it will soon take centerstage in answering our question).

Once you get divorced (again, fingers crossed against this), all the legal issues/headaches/major problems come into play. 

I mentioned in my last article about debt in a marriage that there are two types of states: Common Law states and Community Property States. I’ll review the Community Property states, since there are fewer of them. They are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, Wisconsin, the territory of Puerto Rico….and Alaska allows married couples to opt in to community-property status.

Basically, if you’re in a Community Property State (see above),AND YOU GET DIVORCED, almost all of your assets that you accumulated DURING THE MARRIAGE are divided completely in half. Even your own 401k, private savings account, or pension from YOUR job becomes half your spouse’s! Of course, there are exceptions, such as if you have a prenup where you’ve written down that you will NOT divide your assets equally, or you two agree to amicably divide the assets unequally (in which case, you’ll have to talk to your divorce attorneys and there will be a lot of writing to do.)

Two major exceptions to this rule are INHERITANCES and GIFTS. If you received a personal inheritance or personal gift, your spouse doesn’t necessarily get any of it in a divorce, unless you COMMINGLED THE FUNDS. Commingling means you used some of the funds to pay for a marital expense- this can get super tricky and involves lots of record-keeping and paperwork, so I’m not going to go into it here. My advice is: if you have an inheritance or personal gifts, try NOT to commingle those funds…yep, that might be hard. Once inheritance or gift funds that were specifically yours get commingled with marriage funds, you’ve made them fair game to be seized by your spouse during divorce proceedings. Eek.

If you’re in a COMMON LAW STATE (all the ones NOT listed above) and you get divorced, your assets won’t be divided strictly 50/50, but they will be divided in a “fair” way (read: complex). This will involve a lot of “if I take this, then you can have that” type of discussions. If discussions don’t happen, the courts will step in. It can get quite messy, especially if the whole ‘commingling of funds’ mentioned above has taken place.

Unfortunately, the main fact I came across in my research is: don’t trust your ex to tell you what you’re entitled to. They will possibly lie to your face…or they’ll honestly have no idea and make things up. If you’re getting divorced, DO YOUR RESEARCH. I know, it sounds harsh. I love to believe that people are good at heart too. But…the divorce experts who wrote the articles I read recently seem to believe more in greed than goodness. Sad face.

So that’s a lot. And not the happiest stuff I’ve ever written. If you’re still game for more, I’m attaching links to my research below for further reading. If your head is spinning, let’s review the absolute basics:

• When you get married, you won’t be FORCED BY LAW to share your assets. You will probably want to share some or all of them.

• When you get divorced, THEN you will likely be forced to share your assets.

• After a divorce, Community Property states will divide most of your assets 50/50, with the possible exception of inheritance and gifts, unless the inheritance and gifts were commingled with marital money.

• After a divorce, Common Law states wont divide everything 50/50, but they will divide things in what is deemed a ‘fair’ manner…and this can be very complex.

• It is this very complex division of assets issue that solidifies the possible extreme importance of prenups. 

Oh man. That was a lot for a blog about the thirties. I swear, my next post will be about ice cream or something. Or maybe I’m just thinking about pints of Haagen Daaz because this was depressing.

Please let me know any questions or comments this brings up…or if you have more insight into this. Thanks for reading to the end!

References:

Managing Marital Property DO’s and Don’ts

401K division after divorce (this is complicated so I didn’t go into it here- these guys do it better.)

More retirement plan division after divorce

People hiding assets during divorce proceedings– eek!

Some good info on commingling

Sheltering inheritance

More sheltering inheritance