Common Myths About Marital and Separate Property
Many people misunderstand how assets and debts are treated in divorce, especially when it comes to joint accounts, business interests, and debt division. These misconceptions can lead to confusion or costly mistakes.
Joint Accounts
It’s a common myth that all money in a joint account is automatically considered marital property. In reality, funds earned or inherited before the marriage can remain separate if they’re properly tracked, documented, and not mixed with marital funds. However, joint accounts can blur the lines. When separate funds are deposited into a joint account, it may be harder to prove what belongs to whom, but clear records like bank statements can help. Just having your name on a joint account doesn’t mean everything inside it is shared.
Debt Division
People often assume that all debt incurred during the marriage will be shared equally in divorce. That’s not always true. Many states distinguish between debts taken on for family needs—which are usually shared—and debts tied to one spouse’s personal use or separate property, which may remain individual responsibility. Courts will often consider who incurred the debt, what it was used for, and who benefited from it.
Misunderstandings About Business Ownerships & Interests
Many believe that if a business was started before the marriage or is titled in one spouse’s name, it’s automatically separate property. But if the business increases in value during the marriage, especially through active involvement or support from the other spouse, that growth may be treated as marital property. Courts in many states consider not just when the business was founded, but also how it was funded, operated, and supported during the marriage.
Tips for Completing Your Onward Tasks for Separate & Marital Property
Collect & Store Ownership Documents
- Provide proof that you owned an asset before the marriage by uploading deeds, purchase agreements, gift letters, or statements directly under each section. Make sure these documents have dates clearly labeled on them.
- Make a note under each section for what should be considered separate assets for disclosure.
Label Ownership & Possession
When listing each asset, you’ll see a dropdown labeled “Ownership”. Use this to tag whether the asset is just yours (separate), your spouse, or joint. This helps you stay organized and ensures your disclosures are as accurate as possible.
and add a note to your account.
Use Plaid to Pull Historical Data
- Add your institutions with Plaid to get an accurate history of your expenses.
- For Separate property, consider linking this via plaid or documents to show historical transactions and records that no joint contributions were made (i.e. to a business or property)
- Upload any purchase records demonstrating the exact funds used to purchase separate property.
Track How an Asset Changed Over Time
If your separate asset increased in value, you may need to prove which portion is separate vs. marital. Consider uploading documents that include:
- Valuation at the time of marriage
- Recent appraisals or statements
- Any improvements or investments (and who paid for them)
Understanding marital vs. separate property is the first step. With Onward guiding your financial disclosures, you’ll transform what once felt overwhelming into a confident, informed path forward.
See our articles:
Understanding Marital vs Separate Property