When a couple joins their lives in marriage, most also join their bank accounts. Even the majority of spouses who maintain separate checking accounts also have a joint account for household expenses and may also share a savings account. While both parties share equal access to all joint bank accounts for contributing and withdrawing funds, that status ends the moment one party in the marriage files a petition for divorce. Like all other marital assets in California, joint bank accounts are subject to fair and equitable division under the state’s community property laws.
If you’re facing the prospect of a divorce in the near future or you or your spouse has already filed a petition for divorce, you may be wondering: what’s the best thing to do about your joint bank accounts?
Understanding Bank Accounts and California’s Community Property Laws
Often a divorcing spouse tries to argue that they were the main contributor to a joint account so the funds in the account should belong to them. However, it’s important to understand that even if one spouse is the ONLY contributor to a bank account, joint accounts are community property in a marriage, automatically entitling a spouse to half of the funds, regardless of whether or not they contributed to the account. In most cases, even an account with only one spouse’s name on it is subject to division except under the following circumstances:
- The account is linked to property, inheritance, or a gift belonging solely to one party before the marriage
- The account was opened after the spouses separated, even if it was opened before the divorce petition was filed
- If one spouse contributed to a joint account after separation then only the balance on the date before the separation is subject to division
What is an Injunction on a Bank Account?
In some divorces, a spouse may receive a notice of injunction on a bank account and/or a temporary order to not sell assets. This serves to prevent one spouse from removing or hiding funds before the equal division of marital assets begins. These orders remain binding until the court removes them, issues a new order, or the court order expires. The law considers any attempt to remove, transfer, or borrow against funds under an injunction as fraud and in some cases, the removal of funds may be prosecuted as criminal contempt or even theft. Even attempting to withdraw money to pay for a divorce attorney or living expenses is in violation of a court order.
Can I Remove Funds Before Filing for Divorce?
If a spouse knows that divorce is imminent, they may preemptively remove funds from joint accounts, however, it’s prudent to carefully adhere to the laws of equitable division by withdrawing or transferring only half of the amount in the account to show good faith. In the best-case scenario, both spouses should agree to a fair division of the accounts before closing them. However, either way, it’s also important to keep all records of these transfers or withdrawals and the balance remaining in each account as evidence that you only withdrew the half you could safely assume you’ll be entitled to after the divorce finalization.
If you have questions about the division of accounts and assets during a divorce, a California divorce attorney can help you understand your rights and how to avoid common pitfalls.