Question: My husband and I have separated and are talking about getting the divorce process started. Both of us were older when we were married and already had 401k's and other retirement savings. I also received 10K from my grandmother's estate recently, which I have in a separate bank account. Lastly, we have purchased quite a bit of stocks and bonds over the years--we used my ex's inheritance to purchase many of them, though they are in both our names.
Answer: It's important that you start your new life on a firm financial footing. The Commonwealth of Massachusetts uses the legal doctrine of "equitable division." In addition, Massachusetts recognizes that all property of the parties, whether individually or jointly owned, is subject to division in a divorce. Let's look at how those apply to you.
First, in states that use equitable division, marital property is divided fairly but not necessarily equally. The goal of equitable division is to leave each individual with enough assets to be fiscally solvent, and to enable them to maintain the standard of living that was enjoyed during the marriage.
If, for example, a parent stayed home to care for the children and gave up many years in the work force, a bigger settlement may be awarded to that individual to account for their inability to acquire as much retirement or assets in the future. Similarly, if one parent has a health issue that prevents him from working, either temporarily or permanently, that person might have greater living expenses and, consequently, would be apportioned a higher amount of the martial estate.
As mentioned, Massachusetts recognizes that all property owned by the parties--whether it was pre-marital, received during the marriage, in one party's name or in both names jointly--is subject to division. However, in many instances (and especially in shorter-term marriages), property and assets that were owned prior to the marriage will remain with that person. Therefore, the retirement accounts you both owned before marriage will most likely belong to each of you respectively.
It is important to remember, however, that any marital money that was added to those accounts would be available for division. For example, if you began your marriage with 20K in an IRA and you never added money to that account after you were married, the entire balance would likely still belong to you. If, however, you added money from your salary, that portion would likely be divisible in a divorce.
You mention an inheritance you have received. Inheritances and gifts are subject to division, but they are usually left out of the asset division. So, as long as that 10K is in a separate account with no other funds added to it, you should be fine in asserting that money is yours, and yours alone. The stocks, however, are a bit more complicated. In situations where inherited assets were "interwoven into the fabric of the marriage" they become martial property and are usually divided.
Since the stocks and bonds were purchased with money that came from your husband's inheritance, he could argue that the principle used to purchase the stocks is non-marital and that the accrual over the years is marital. On the other hand, since the stocks were put in both names, you have a strong argument that the funds were comingled with marital assets, and that they are now half yours. This asset division would depend on many factors that would need review by a qualified attorney.
As you can see, there are no easy answers regarding who gets what in a divorce. Your best bet for protecting yourself and your future, is to seek experienced family law legal counsel.