Rhode Island Supreme Court Rules Bank Account is Marital Property

Earlier this year, the Rhode Island Supreme Court issued a decision that gives further clarity as to what is considered marital property and what is not. In this case a couple was going through a divorce. At the trial court level, the judge divided the property that she found to belong to the couple together, and allowed the wife to keep some of the property as her own since it was determined to be her separate property that she was given as a gift. The Rhode Island Supreme Court agreed with most of the lower court’s findings, but found that the wife’s earnings during the marriage should have been considered joint marital property. Therefore, it should have been divided upon divorce, even though she kept it in a separate bank account in only her name.

As this case illuminates, the determination of what is considered marital property and is thus subject to division and what is separate property is very fact specific. That’s part of why it is so crucial to work with an experienced Rhode Island divorce attorney if you are going through a divorce.

Rhode Island Divorce Law

Before the specifics of this particular case can make sense, you first need to understand some of the underlying divorce law in Rhode Island regarding property division. The law in Rhode Island is that when a couple divorces, the marital property is split equitably no matter who earned the money initially. Equitably does not always mean equally, but it usually does. That means that, absent an agreement to the contrary like a prenuptial agreement, almost all of the property that either party acquires during the marriage is considered “marital property” and will be split by the couple upon divorce.

However, there are some circumstances where the property is separate property and the individual who has it gets to keep it without splitting it during the divorce. If one spouse receives a gift meant for only them from a third party or an inheritance then it is separate property, and they alone can keep it during the divorce. That said, property that was at one time separate property can become marital property if the owner of the property “transmutes” the separate property into marital property by treating it like such. For example, if one spouse gets an inheritance and puts it into a joint bank account that is used for household expenses, the inheritance is likely now marital property. Conversely, if the spouse takes the inheritance money and puts it in a separate bank account with their name alone on it and only uses it for their own expenses, it would likely stay separate property.

In this case, the lower court erred by treating the wife’s bank account like separate property even though it was marital property. Though the bank account was only in her name and she only used it for personal expenses, the money came from her employment during the marriage, which means that it was always marital property. Therefore, the husband was entitled to half of the money in the account because transmutation only turns separate property into marital property and not the other way around.

Contact an Experienced Rhode Island Divorce Attorney Today

If you are considering a divorce, you should contact a caring divorce attorney as soon as possible. As explained above, parties will sometimes unknowingly transmute separate property into marital property and therefore subject the property to division. Understanding the legally complicated rules of property division during a marriage and divorce can help to give you a leg up in the divorce proceedings and help you plan during the marriage. The knowledgeable attorneys at Bilodeau Capalbo, LLC, can help you get (and keep) what you are entitled to. Call (401) 300-4055 or use the form on this web site to contact us today for a free consultation.

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