Part of getting a divorce is determining how you’re going to pay for your debts and necessities while going through the process. People who don’t think ahead to save or to have available credit for a period of time may find it difficult to stay afloat, as their joint accounts may be locked down until the divorce settlement is finalized.
In the majority of marriages, it’s still the husband who is the breadwinner. That places women in a difficult position of not always knowing the exact household income or the investments that are made. Sometimes, their partners go as far as to clean out joint accounts before filing for divorce, leaving them with nothing.
What happens if you have a joint account during divorce?
If you have a joint account, then, at the time of filing, an Automatic Temporary Restraining Order may go into effect limiting the types of withdrawals from the account and the purposes for which the money may be spent. Generally, during a divorce, withdrawals and spending are restricted to reasonable living expenses and reasonable attorneys fees. If additional funds are needed, such as costs of setting up a separate residence, the parties generally have to agree to those significant withdrawals and expenditures, and if they cannot agree, there may need to be court intervention.
What should you do if you have access to funds? Is it safe to withdraw them before filing for divorce?
I generally recommend that my client move at least two months worth of expenses from a joint account into a separate account just in case the other spouse reacts poorly to the filing of a divorce and cleans out the account, leaving them penniless. This way, the client is protected for a couple of months until we can either reach an agreement with the other spouse about how expenses will get paid while a divorce is pending, or until we can get in front of a judge.
Be cautious about how much you take and what you do with it. If your spending is considered above “reasonable” (based on your own past history of spending for living expenses), your spouse may be able to obtain an offset in a final division of your assets. In other words, you may have to pay them back a portion of what you took out and spent.
If you don’t have an acrimonious situation, then talk to your spouse about the options before you file for divorce (as long as you have at least enough for a couple of months stashed away somewhere in case the amicable situation goes south). You both may agree on a fair amount to withdraw, so that you don’t have to argue over this being a planned stab at the other person’s dignity. Only you, your spouse and your attorney can come up with the best solution in your situation.