Remember joint bank accounts during divorce

On Behalf of | May 7, 2021 | Property Division

Divorce requires attention to major property such as your home along with numerous other assets obtained and commingled during your marriage. Joint checking and savings accounts are among the assets that require particular attention, even in a high-asset divorce.

Freezing accounts

Divorce can bring out the greed in spouses and act like a starting gun for a race to the bank to drain your joint accounts. It is important to assure that your spouse cannot deplete your joint checking and savings accounts.

If this occurs, a judge will usually make your ex-spouse reimburse you. But this requires time and money, and reimbursement may not come quickly.

Instead, take steps to protect vulnerable accounts. Contact your bank, explain that you are in the process of divorce and ask for a freeze on accounts unless both spouses authorize a withdrawal.

Placing a freeze on accounts protects your assets and provides some time for you and your soon-to-be ex address bank accounts when you are ready. Tell your spouse about the freeze so they are not surprised when they try to pay bills or attempt to withdraw cash.

Other steps

After accounts are frozen, you can begin dividing your assets. The simplest method is for both spouses to open individual accounts in their own names and fairly divide the money in the shared accounts.

Spouses may disagree on the definition of fair, however. They should try to reach an agreement that is reasonable. The shared accounts may be closed once its funds are withdrawn into separate accounts.

After a spouse withdraws money from the shared account, the other spouse may want to keep the shared account. If this occurs, it is important to change the account so that spouse is its sole owner and to prevent their former spouse from accessing it.

Property division can be complicated and have long-term consequences in a community property state such as Texas. An attorney can help you prepare for and address this issue and assure that your rights are protected and you are not violating courts order that may be in triggered at the time the divorce is filed that could prevent you from taking action to freeze or withdrawn funds from bank accounts.