Most married couples have numerous types of joint accounts such as, checking, savings, credit card, retirement, investment, etc. and while each type of account should be addressed when divorce is imminent, we are going to take a look at the standard joint checking and savings account and offer up some advice in preparing for your divorce.
First things first, find all of the accounts. You might have joint savings or checking accounts other than the account you regularly use and not even know it. It’s a good idea, especially if you are not involved in managing the household budget, to become your own private investigator and search out all of your accounts. Look through cabinets, drawers and files. Now that you have found everything, closely examine statements and cancelled checks. It’s possible there are old accounts you thought were cancelled that may still be open.
Make copies of all of your statements. The statements will show your normal pattern of deposits and withdraws from these joint bank accounts while providing proof if need of future large withdraws or spending sprees.
Open your own bank account. If you are working and have direct deposit of your paycheck, be sure to have that changed so it is deposited into your new individual account. You are going to need some money of your own when the divorce starts. Many divorce attorneys will not start working for you without a retainer. Continue to contribute to the household bills as before.
Close or freeze joint accounts. As soon as your individual accounts are up and running, withdraw half of the money in your joint bank accounts and deposit it in your new accounts. Then have the bank “freeze” the account allowing access to the accounts only with authorization from both of you. Another option if you have more than one account is to open another joint account and put all of funds it. Of course set this account up where both parties are required to add or withdraw funds.
CDs, the money kind not music. If you have a joint Certificate of Deposit account it is suggested that you have your bank freeze the account. If you make a withdraw you will likely have to pay an early withdraw penalty. According to a Fox business report, early withdraw penalties can be three months of interest for CDs with maturities less than one year and up to six months early withdraw for CDs with maturities over one year.
Realize that doing all of this work to separate your money doesn’t mean that is how it’s going to stay. These steps are to make sure you are not left high and dry by your spouse. During the divorce proceedings more than likely all of your assets, whether in a joint account or not, will be considered marital property and subject to equitable distribution. With some work and perseverance you can make easy work of dealing with joint accounts and divorce.