Millennials are more likely than previous generations to keep their finances separate after they get married, but many experts say this will not necessarily protect them financially in case of a divorce. This is true even though Ohio is not a community property state.
In an equitable distribution state, assets earned by each spouse are generally considered to be the property of that spouse. However, experts warn that couples should not assume that keeping separate accounts will necessarily protect them in case of a divorce. Division in an equitable distribution state is supposed to be fair. This does not mean that it will be equal, but in some cases, a judge might decide that one spouse should pay more to the other.
It can still be a good idea to keep separate accounts, but experts say couples who want to make sure their finances stay separate if they divorce should get a prenuptial agreement. According to attorneys, the use of prenups is on the rise. A prenup also provides an opportunity for couples to talk about money. If they do not want to use a prenup, printing out account information before the divorce may help establish what property belongs to each person before the marriage. Inheritances are usually considered separate property but should not be commingled with shared funds.
A judge may look at each person’s income among other factors when deciding how property will be divided, but couples do not always have to go to cour. It might be possible to reach an agreement through negotiation. During this process, people should be aware that there can be complexities involved in dividing a home or retirement account. For example, to divide a 401(k), a document called a qualified domestic relations order is necessary.