Family Law

Opening and Closing Accounts When Divorcing

By Kristina Otterstrom, Attorney
Managing your finances during a divorce.

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Take an Account Inventory

Before filing for divorce you should create a list of all your personal and joint accounts. This list should include all bank, credit union, credit card, savings, brokerage, and loan accounts. Additionally, you’ll want to identify the following for each account:

  • account numbers and whether the account is in one or both spouses’ names
  • current account balances
  • bank and creditor addresses and phone numbers
  • scheduled automatic withdrawals from accounts
  • date account was opened, and
  • account or loan balance prior to marriage (if applicable).

You should also request a credit report to ensure that you haven’t missed any accounts in compiling your list. Having this information will allow you to keep track of your spouse’s expenditures and make a claim to any funds your spouse squanders or hides during the divorce process.

When Should I Remove Funds From a Joint Account?

One of the biggest questions for a divorcing couple is how to divide and protect assets after separating. An unemployed spouse may be tempted to drain a joint bank account before filing for divorce. Some attorneys will advise a needy spouse to remove enough money to cover basic living expenses before filing for divorce. Other attorneys may tell you not to touch a joint bank account except to cover your basic living expenses and to track those expenses carefully. Just be aware that removing a large sum of money from a joint account may anger your spouse and fuel a bitter divorce.

In most states, marital property is equitably divided between spouses. This includes bank, savings and brokerage accounts. A few other states, called community property states, will split marital assets in half – or equally. The laws of your state and the particular facts of your case will affect how much money or assets you receive as part of the divorce. In any case, it’s never a good idea to remove more than 50% of the funds in a joint account. Also, a judge can require you to return any funds you’ve withdrawn. Consult a local family law attorney if you have more specific questions about accessing marital funds.

Can I Open a New Account During My Divorce?

It’s a good idea to open up a separate account during your divorce if your spouse is squandering marital assets. Just be sure to inform the court and your spouse about the new account through a financial declaration. You can deposit your paychecks directly into a separate account and manage your funds from that account. However, keep in mind that any income you earn is still considered marital property. You will need to account for all money going into and coming out of your separate account.

Should I Close Accounts During My Divorce?

You should be careful about closing any accounts during your divorce, although there are exceptions. For example, if you have credit card accounts with zero balances it’s a good idea to close some of those accounts. This prevents your spouse from running up debt before the divorce is final. You could be responsible for credit card debts incurred by your spouse even if you have a postnuptial agreement or a court order saying your spouse is responsible for the debts. Closing some credit card accounts can limit any potential damage and your potential liability.

Most importantly, stay on top of account balances and your spouse’s spending. If you see any strange charges or large withdrawals, notify your bank, credit card company, or your attorney immediately. Planning ahead can ease some of your financial stress during and after your divorce.

Questions for Your Attorney

  • I didn’t work during my marriage and don’t have any savings. Should I open my own bank account during the divorce?
  • My spouse has several credit cards with large balances that I knew nothing about. Will I be responsible for these debts?
  • I recently lost my job, and my spouse threatened to “cut me off” if I file for divorce. I want a divorce, but I’m afraid I won’t be able to survive financially. What can I do?
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