Joint Bank Accounts and Divorce
When you are on the brink of a divorce, the amount of emotional weariness goes to such an extent that you forget thinking about the future. Your views are limited to the past and the present and very often your future is neglected. When you finally reach the ultimatum and start realizing the real facets of life, you find a nightmare awaiting you at your doorstep.
However, once you are aware of the fact that divorce is down the line then I would suggest you to put a hold on your emotions. I know this is difficult, for during such a phase, all that you can think about, is of the anxiety, fear, despair, and frustration and anger, that are building up inside you. But you need to get a grip over it and focus your attention on your financial assets. Do not let it slip away with your emotions.
Ending a marriage is a business deal which is based on property settlement and division of all the assets that you jointly possessed. So, if you are thinking of a divorce or a separation, then the most important thing that you have to do is, to focus on all your joint accounts. Rarely does a divorce is pursued in an intelligible manner, where the couples are understanding and prefer to resolve the issue, in the easiest possible way. What usually happens is that one of the spouses, either withdraws all the money and hides it, or goes on a spending spree, whose credit falls on the shoulder of the other person. And when you wake up from the deep slumber, another disaster awaits you.
So, here are a few things that should be kept in mind and must be paid more attention to:
1) Freeze all your joint accounts: Request your bank to freeze all your joint accounts. Notify them in written of the impending divorce. Or you can even opt for an ‘Escrow account’, where an officer of the bank is authorized to look after your accounts and take care of all financial transactions to be carried out with the consent of both spouses. Or another option is to take half the money and deposit it into an individual account. Also freeze all your phone, utility and equity credit line accounts.
2) Review the current statement of your credit account: ask your credit card company to provide you with the current credit statement. Many a times, one of the spouse shops and spends lavishly on the credit account of both the partners, which later on, has to be cleared by the other person. So, the best thing to do is inactivate and cancel your joint credit cards. If you have to clear off the debts and you are in no position, then consult the supervisor and inform them in written specifying, that you are not going to be responsible for the credits beyond this.
3) Keep your personal assets separate: do not deposit your personal properties or belongings in the joint account, for they are likely to be considered as joint property. Always remember that what you brought along, at the time of marriage, will also go with you, when you walk out of it. So, maintain a separate list for all that belongs to you only.
4) Safety deposit box: this is one of the most difficult assets to keep in check. If one of the partners is working, then most likely, he or she might keep money in it, which could be easily taken out without the other person’s knowledge. So, if divorce is down the lines, then try to get the box frozen at the earliest.
5) The best option is to sell the house: yes, I know we are deeply attached to the house and would not really like the idea of selling it, but this might add to our disadvantage. Usually, those who keep the house, tend to lose the share of capital gains, so, consider selling it and put the money in some other use instead. Always remember, assets and properties which are not in liquid form, may not be of much help to us when we badly need them.
And yes, open a new individual account before you actually separate, and try to deposit every little penny you can save, for it will prove helpful to you later. Sometimes, your spouse may liquidate the joint account without your knowledge after transferring all the money into a different account, so be cautious.
Though, in such a situation, the court provides you with reimbursement but it might take you a couple of months or years even to collect the money that has already been transferred and might prove quite expensive.