Going through a divorce is never easy, and there are a number of issues that must be resolve, not the least of which is the division of property. Moreover, during the divorce proceeding, it is crucial to secure your finances, starting with joint checking and savings accounts. This article is a brief discussion on how to handle joint bank accounts during a divorce. As always, you should always seek the advice and guidance of an experienced divorce attorney.
Should I freeze a joint bank account?
If you believe that your spouse may try to clean out the account, you can freeze all account activity either by filing a restraining order or mutual property injunction. However, this will block both of you from withdrawing or depositing money to the account without the prior approval of both parties.
Can I withdraw funds from a joint bank account?
Although both spouses are well served by avoiding hostiles when diving bank accounts, the fact of the matter is that most divorces are not amicable. At times, one of the spouses may withdraw all the money or ask the bank to freeze an account. For this reason, it may be necessary to withdraw half the funds before the other spouse takes such an action.
Many will ask, “is it legal?” The simple answer is that you can withdraw up to half of the proceeds in a joint account, provided that you do so before the divorce is filed. Moreover, removing more than that could cause legal complications during the divorce proceeding. Finally, it is worth noting that you have a duty to preserve these funds until the divorce is finalized. By failing to do so, you may receive less in the final property settlement.
Advice on Withdrawing Funds
Before you withdraw funds from a joint bank account, it is necessary to open a new account in your name only. When the account is active, funds from the joint account can easily be transferred at the bank, over the phone, or online, by using the account routing number.
Regardless of how the funds are transferred, you should keep records of how the money was spent because questions will inevitably be raised but the other spouse’s attorney during the proceeding. However, these records – and other financial information, should be kept in a place where your spouse cannot access them.
Once the transfer has been completed, your spouse should be informed. In any event, there must be enough money left in the joint account to cover monthly bills and household expenses. Finally, after the divorce is final, all joint bank and credit card accounts should be closed.
If you are considering a divorce, there are a number of steps that you must take to protect your financial future. To learn more about your options, contact Blair H. Chan, III, PLLC today