In many relationships, one partner–often the higher earning husband, takes on the responsibility of handling the couple’s finances. The partner who does not participate in financial decision making may have a general idea of where the couple stands financially, but is usually unaware of the couple’s precise income and investments, or how to access the couple’s assets.
Spouses who are do not have a clear picture of finances within their marriage may face financial difficulties during their separation.
While this type of arrangement may feel harmless or even efficient when the couple’s relationship is prospering, it can place the spouse who doesn’t have a clear picture of the couple’s finances in a difficult position should the couple decide to separate. A partner who has not been involved in the couple’s finances may not be able to easily determine how they will pay for living expenses. In addition, they may be at greater risk of entering a divorce settlement that does not reflect their fair share of the couple’s assets.
Separating spouses should be aware of their rights and entitlements with regard to joint accounts.
Individuals who are considering separating from their spouse should be aware of their rights and entitlements with regard to joint assets. One of the first questions that individuals who are in the process of separating often inquire about is how to handle funds that are kept in joint accounts.
A recent Forbes article written by Jeff Landers, President and Founder of Bedrock Divorce Advisors, which is a divorce financial strategy firm, provides some useful suggestions regarding how joint accounts should be handled during a separation.
Separating spouses should determine their immediate financial needs and consult with an attorney to determine whether it is appropriate to secure that amount from joint accounts.
Landers advises individuals who are either planning to file for divorce in the near future, or believe their partner may be doing the same to set aside funds from the couple’s joint account for their immediate needs. He acknowledged that when and how much an individual should withdraw is a complex question with legal implications.
For example, in many states, including California, spouses can freely transfer and withdraw funds prior to formally filing for divorce. However, once the divorce process has begun and a legal filing is submitted to the court, the couple’s assets are subject to certain restraining orders that may impact either spouses’ ability to access joint accounts.
Since spouses are generally entitled to half of the couples jointly titled assets during a divorce, they may consider withdrawing that amount from joint accounts prior to a formal divorce filing. However, if a spouse is aware of other accounts that are in the sole name of their partner, the individual may think about withdrawing more than half of the funds in the joint account in order to offset those amounts. However, partners who withdraw funds from joint accounts should consider how their actions may impact the way their spouse handles the divorce proceeding. In some circumstances, withdrawing funds prior to a divorce filing may cause the opposing spouse to become vindictive and uncooperative during the divorce process.