How to Divorce With Separate Bank Accounts & Splitting Property

By Rob Jennings J.D.


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Marriage is an economic as well as an emotional union, so the divorce process has an economic component, as well. Fighting over property and debt division can be a long, drawn-out process, which can cost more in attorney fees than the net value of the marital estate. To minimize the financial and emotional costs of the divorce process, it makes sense to attempt an amicable settlement of your financial issues -- if at all possible. Litigation and formal mediation aren't always necessary, if you can reach an agreement outside of these processes.

Decide which property and debts are marital and which are separate. State laws on property and debt division vary, so you'll want to familiarize yourself with your state's family law code before making any major decisions. In general, separate property and debt is that which you brought into the marriage, along with those property and debt items that are traceable to something you brought into the marriage -- unless you intermingled your separate and marital property to the point where they're indistinguishable from each other. Whatever you earned or incurred after your wedding day and before your marriage ends is often marital. State law variations are extremely important here, as some states consider your date of separation to be the cut-off date, while others use date of divorce, date divorce complaint is filed or some other measure.

Agree on whether or not you're looking for an equal division. Although courts in community property states are generally required to evenly divide the marital estate, judges in equitable distribution states, which is the majority of jurisdictions, are empowered to award unequal distributions in the presence of certain statutory factors. Even if you live in a strict 50/50 state jurisdiction or there is no basis for an unequal division, you may agree to a lopsided balance just to get out of paying alimony or to reduce your child support obligation.

Allocate assets and debts between you and your spouse until you reach a mutually acceptable division. Keep in mind that all dollars are not created equal; a dollar in a retirement account will be taxed before it reaches your hands, so it's actually worth less than a dollar in the bank.

Reduce your agreement to writing. Depending upon the procedural stance of your case and the nature of some of your financial assets, you may need to have your agreement approved by a judge on the record in open court. When you appear in court for the judge to approve your agreement, she will generally conduct a brief inquiry of both sides to ensure that you both understand what you're signing and that you have done so voluntarily, although some judges will skip the inquiry, if you're both represented by lawyers.


Some states have expedited divorce proceedings for couples who have agreed on a division of assets and have no children.


Mistakes made in dividing retirement accounts can cost you tens of thousands of dollars in taxes. If you have substantial assets or will be dividing retirement accounts, make sure you consult with an attorney.