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It depends on the laws of the state in which the couple resides at the time of divorce.
If it's a community property state, the $1M savings and $1M debt would be separate property (belong to the spouse that owned them at the time of the marriage). The $1M that the savings account grew during the marriage would be community property and in theory each would get $500K. Of course the distribution could change depending on the facts of the case.
Did the person who brought the savings account add to/use it during the marriage?
people seem to think everything is split in a divorce, it isn't. The things that were used during the marriage belong to both partners. The things that came in separate and kept separate are separate at divorce
I suppose the person could have split the $1 million into several accounts before marriage. Then spend each one down as needed? the rest being untouched by marriage would still be his.
having had a similar divorce situation ... although with not as large a sum as the OP's example ... in a community property state (Colorado) ...
you will find this to be a fairly "sticky" situation.
Through the course of the acrimonious divorce, my lawyers repeatedly told me that the only way to protect one's pre-marital assets was through a pre-nup agreement. At that, it's still not a totally ironclad resolution of what may happen in the future.
the laws of the state where the divorce is taking place are important as to how the assets will be split.
Also, the attitude of the court will be significant as to what they will accept for a settlement between the parties. At the time of my divorce, Colorado judges overwhelmingly favored that the assets go to the ex-wife in the assumption that she'd need the money more than the husband. For me, the settlement amounted to 90% of my pre-marital assets going to my financially inept ex ... she never saw a dollar that she couldn't leverage to spend a whole bunch more. No, it wasn't a "fair" settlement, but at least I was rid of her after she abandoned me and the kids.
YMMV. Seek out the best counsel you can find, they may be worth it.
... My understanding is that, if there is a divorce, in many states assets are split "equitably."
But if:
one party comes into the marriage with savings of $1M.
and the other comes in with debt of $1M.
and during the course of the marriage their accounts grow to a total of $2M.
Is the $2M then split evenly? Or is there an accounting that says the $2M grew from the savings and not from the debt?
In theory, the assets are to be distributed "fairly", yet there are no set formulas - so does this mean assets are distributed on a whim?
Anyone with assets of $1 million+ coming into a marriage and/or a future spouse with a large negative net worth should have a pre-nuptial agreement prepared by a lawyer specializing in such things. This also applies to community property states. As part of the pre-nup, both parties state their assets and liabilities so that there can be no confusion in a divorce settlement.
having had a similar divorce situation ... although with not as large a sum as the OP's example ... in a community property state (Colorado) ...
you will find this to be a fairly "sticky" situation.
Through the course of the acrimonious divorce, my lawyers repeatedly told me that the only way to protect one's pre-marital assets was through a pre-nup agreement. At that, it's still not a totally ironclad resolution of what may happen in the future.
the laws of the state where the divorce is taking place are important as to how the assets will be split.
Also, the attitude of the court will be significant as to what they will accept for a settlement between the parties. At the time of my divorce, Colorado judges overwhelmingly favored that the assets go to the ex-wife in the assumption that she'd need the money more than the husband. For me, the settlement amounted to 90% of my pre-marital assets going to my financially inept ex ... she never saw a dollar that she couldn't leverage to spend a whole bunch more. No, it wasn't a "fair" settlement, but at least I was rid of her after she abandoned me and the kids.
YMMV. Seek out the best counsel you can find, they may be worth it.
I know a guy that did something similar. He figured it was worth it to write her a check, and be done with it, rather than continue to pay lawyers and spend time and anguish fighting it.
He has seen, and I have seen, where couples fight each other from solvency into bankruptcy in short order.
I know a guy that did something similar. He figured it was worth it to write her a check, and be done with it, rather than continue to pay lawyers and spend time and anguish fighting it.
He has seen, and I have seen, where couples fight each other from solvency into bankruptcy in short order.
At that point you're spending her money, I say go nuts IMO.
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