When couples divorce, all of their marital assets, including their bank accounts, are subject to equitable division (the legal term is “equitable distribution”). While the division of bank accounts may seem to be relatively straightforward this is not always the case. Bergen County divorce attorney Brian D. Iton is familiar with the complexities that may arise when property division is an issue. He can advise you on how a marital agreement can handle bank accounts, and he can also vigilantly protect your interests if you need a property division attorney to represent you.Distinguishing Separate and Marital Bank Accounts During Property Division
The first step in asset division is distinguishing between separate and marital property. Generally speaking, separate property comprises assets owned by one spouse prior to the marriage and assets received by that spouse during the marriage by gift or inheritance. For physical items—jewelry, heirlooms, and so on—separate property is usually easy to distinguish. But this is not necessarily the case with money deposited in bank accounts.
Keeping funds strictly separate during a marriage is difficult to accomplish on a long-term basis, and it can easily fuel distrust and resentment. As a consequence, couples often “co-mingle” their accounts after they are married, including their checking and savings accounts or even investment accounts. Similarly, when one spouse receives money by gift or inheritance, that spouse will frequently deposit the money into a joint account. Even when funds are kept separate, the parties may use separate monies to fund joint activities, such as family vacations, family cars, investments, and home improvements.
Consequently, when one spouse claims in a divorce proceeding that certain bank account funds constitute separate property, it may be difficult to determine whether the funds are separate or whether they have changed character and become marital property, which would make them subject to equitable division upon divorce.The Issue of Hidden Monies
Another common issue is tracking and returning funds that rightly belong in a joint marital account. In anticipation of a divorce or separation one spouse may attempt to move monies from known bank accounts so that those funds will not be included in the division of property. A spouse may withdraw funds from a joint account and create a new, unknown account at a different bank, perhaps under a child’s name or with the collusion of someone who will open the account in his or her name. This may be relatively easy to do if only one of the spouses manages the family’s finances.
In some cases, the funds will be transferred over a long period of time in anticipation of filing for divorce. This is usually done in a surreptitious manner so that the other spouse does not suspect that anything is amiss. The remedy for this type of activity is to subpoena all known bank accounts and trace the movement of funds into and out of these accounts. Most banks have records going back at least 7 years. Following the paper trail will lead to the newly formed accounts. If there are numerous transfers a forensic accountant can be hired to track the movement of the funds between different accounts.
If a spouse runs a business, there are even more opportunities to hide cash. The business owner may try to misrepresent sales and profits from the business so that the income never shows up in the joint account at all. In this situation a full forensic audit of the business may be necessary to determine if there is hidden cash in the business.
Although the penalties for failing to disclose bank accounts and hiding assets are severe, a spouse who does not want a full distribution of marital monies may still persue this course of action. If you suspect that your spouse has moved marital money, or that he or she has hidden bank accounts an experienced divorce lawyer can help you trace and identify these accounts.Offsets
Another matter that may affect bank account division is when bank account funds are distributed in a way that offsets the division of other assets. For example, sometimes one spouse wants to keep the family home post-divorce. When this happens, the other spouse may be awarded all or a greater share of bank account funds to offset the value of their ceded ownership of the home.Protect Your Interests by Enlisting a Divorce Attorney in Bergen County
If you need help with a property division matter, including understanding how bank account funds may be distributed in a New Jersey divorce, call Bergen County divorce lawyer Brian D. Iton toll-free at (844) 431-3380, or use our online contact form to set up a free consultation. Brian D. Iton proudly represents people in Hackensack, Paterson, Newark, Jersey City, and other communities throughout Bergen, Essex, Hudson, and Passaic Counties.