HB1701
To Amend The Law Concerning Division Of Property To Provide That Property That Accumulates In An Interest-bearing Account Owned By One Party After The Initiation Of A Divorce Proceeding Is Considered Separate Property.
Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment
Sponsors
AI-Generated Summary
House Bill 1701 amends Arkansas Code § 9-12-315 to modify the definition of marital property in divorce proceedings. The bill establishes that any property accumulating in an interest-bearing account, such as pension funds, retirement accounts, or investment accounts, that is held in the name of only one spouse, is classified as separate property rather than marital property once a divorce complaint is filed. This effectively excludes post-filing growth or additions in individual accounts from being subject to division between spouses upon divorce. The legislation clarifies the scope of exclusions from marital property to provide a specific exemption for individual interest-bearing accounts during the pendency of a divorce case.
Potential Impact Analysis
Who Might Benefit?
The primary beneficiaries of this bill are individuals who possess significant personal financial assets, such as private retirement accounts, pension plans, or investment portfolios, and who subsequently go through divorce proceedings. By ensuring that growth or accumulations in these accounts remain separate property after a divorce filing, these individuals retain exclusive ownership of the appreciation of their personal accounts during the litigation period.
Who Might Suffer?
The individuals most negatively impacted by this bill are spouses who do not hold individual interest-bearing, retirement, or investment accounts in their own name and who rely on the equitable distribution of total marital assets to ensure financial security post-divorce. These spouses may receive a smaller share of the marital estate because the growth of their partner's separate accounts during the divorce process is no longer considered divisible marital property.
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