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 circ*mstances:
- 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.
FAQs
With a joint account, both parties have equal rights to the funds. Thus, you could empty the account without the other one's permission.
Can a wife take all the money from a joint account? ›
Equitable distribution
Typically, the court will award each spouse half of the money held in a joint account. Even if one of you decided to take the money out to spite the other (or to cover immediate expenses), that person would have to cough up 50% to make the other person whole.
Are bank accounts considered community property in California? ›
After separation, many spouses continue to deposit their separate earnings into a bank account. Those funds are usually considered the separate property of the spouse who deposited the earnings. The balance at the date of separation generally identifies how much community property funds are in the bank account.
Is all money even in secret bank accounts in California split 50/50 in divorce? ›
Why Your Spouse's Hidden Assets Affect You. California is a community property state, meaning the courts must divide couples' community property equally during a divorce.
How do I protect my bank account in a divorce? ›
Open Your Own Bank Account
Most couples choose to establish a joint bank account when they get married. During a divorce, though, you should set up a bank account solely in your name as soon as possible. This step is especially important for spouses without jobs or who have been stay-at-home parents before the divorce.
Can a spouse hide bank accounts in a divorce? ›
Under California law, a marital relationship is a confidential relationship requiring the highest good faith and fair dealing. Accordingly, California law provides that all spouses have a duty to make a full disclosure of all their assets and provide equal access to all information related to their finances at divorce.
Can I spend money from a joint account during divorce? ›
If the funds in your joint bank account are considered separate property and owned exclusively by your spouse, they may legally be able to drain the account. Similarly, even if the account is community property, a spouse may be able to withdraw money for reasonable living expenses, legal fees, and children's expenses.
Can I sue someone for taking money from a joint account? ›
If your ex-partner takes money from your joint account or runs up debt on your joint credit card without your permission, you may be able to sue them in court. However, it can be difficult to win these cases. You should consult with an attorney to discuss your legal options.
What is financial infidelity in a marriage? ›
Financial infidelity occurs when one partner hides or misrepresents financial information from the other, such as keeping secret bank accounts or hiding purchases. It does not necessarily involve marital infidelity, though it can lead to divorce.
What is the 5 year rule for divorce in California? ›
If you've been married less than five years and have no children, you may qualify for a simpler way to get divorced (summary dissolution).
Under California law, “[s]ums remaining on deposit at the death of a party to a joint account belong to the surviving party . . . as against the estate of the decedent unless there is clear and convincing evidence of a different intent.” The trial court held that because there was no clear and conclusive evidence of a ...
What assets are protected in divorce in California? ›
California is a community property state. In a community property state, any property or debt acquired during the marriage belongs to both spouses equally. There are exceptions to this law, namely inheritances and personal gifts received during the marriage.
Can I remove myself from a joint bank account without the other person? ›
While most banks won't let you remove the other joint account holder without their permission, many will allow you to remove yourself. Your bank can walk you through removing yourself from a joint bank account. You may need to submit a written request or go in person for a scheduled appointment.
Can I remove my ex from a joint bank account? ›
A bank should not authorise the removal of your name without your consent. If this has, or could, occur you must contact your bank immediately. Where this happens during divorce proceedings, the courts are also able to consider this an improper use of marital wealth.
What happens if you have a joint bank account and split up? ›
If you and your ex are still on speaking terms, ask them to close the account together and split the funds. If they agree, take the money and immediately open a new account in your name only. If you are not on speaking terms, speak with a divorce attorney. Ask if it is legal to withdraw half the money in the account.
Can one person withdraw from a joint account? ›
Each account owner can get a debit card, write checks and make purchases. Both account holders can also add funds or withdraw them from the account. The money in joint accounts belongs to both owners. Either person can withdraw or spend the money at will — even if they weren't the one to deposit the funds.
