In conversation with Marie Claire, Annelis Bos, Partner at Coote Family Lawyers, shares the pros and cons of separating finances - and how to effectively protect your assets from your partner.
Millennials and Gen Zs were the first two generations to be raised in an era where divorce was normalised.
Many of us who saw our parents split, remarry, and struggle with the complexity of asset management have been left unimpressed by the old-school method of sharing finances.
The Legal Risks of Shared Finances
But does keeping our finances separate really increase our independence or protect us from legal risk?
Annelis Bos, a partner at Coote Family Lawyers, says that separating finances can "create a feeling of fairness and independence in a relationship".
However, isolating your finances carries significant risks if the balance in the relationship is uneven or changes.
"If one person is a stay-at-home parent and the other earns an income - separating finances can become problematic. The person who doesn't earn money can become reliant on the person with access to funds and ultimately lose financial control. This can sometimes stray into financial abuse territory."
Can You Protect Your Money From Your Partner Without A Prenup?
Annelis points out that while many couples who keep their finances separate might feel like they're protecting their wealth, there is effectively no way to protect yourself financially without a prenuptial agreement or financial agreement. She says people might try to safeguard their money by splitting it off into crypto, hiding it in PayPal accounts, or giving it to family members to safeguard. "In today's digital age, everything is traceable; it's very difficult to ring-fence accounts."
"In Australia, keeping finances separate does not legally protect assets during a separation. It doesn't matter if the account was in one person's name or joint names, the assets are considering in the one pool." Essentially? While sharing sharing or not sharing finances comes down to personal choice and carries pros and cons, without a formal legal agreement "there's no effective way to quarantine your assets."
You can read the full article that was published in Marie Claire here: "After 10 Years Of Marriage, My Husband And I Still Don't Share Finances"
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