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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Depends on the state. General rule is keep it separate and don't use it for anything joint. [/quote]

Virginia. We will be able to use the money for either emergencies or large payments. Say my sister finally buys house (they can afford monthly payments but do not have downpayment). If she uses money for downpayment, and hosue in both names, at divorce they will have to split proceeds 50-50?[/quote]

Most likely, yes.  [/quote]

100% wrong. If the items our purchases are tangible AND kept separate (so they can be traced out), the items are separate. For example, a withdrawl used to pay credit card debt is t tangible and will be gone in a divorce. Money used for a downpayment would be separate unless she can't trace it back to the initial withdrawl from this account. For example, 2 years after buying the house she refinances and takes lots of equity out. The downpayment may be considered gone as a separate asset (since remaining equity could just as easily be from mortgage payments. Make sure all records of the transfer from your parents are kept, that NO dollars other than gifts from your parents are deposited into the account, all records of purchases and withdrawals from the account are maintained and, if possible, have her husband sign a document when buying something confirming  it is your sister's separate property.

Signed,

A VA divorce atty

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