What happens with shared bank accounts at Separation?
Joint (as well as individual) bank accounts will be part of the asset pool to be divided during the course of a property settlement. How the balance of funds is distributed is subject to the terms of the property settlement. Bank accounts can be frozen if there is concern that funds will be wasted by your ex-partner, although this may inflame tensions with them.
Whilst you are in a de facto relationship or marriage it may feel very natural to have shared assets and a joint bank account. However, once a relationship breakdown occurs, these assets can become highly sought after. This article will highlight some general rules as to how to deal with shared bank accounts during a separation.
These tips should help you save time and money, as well as preserve the relationship between you and your ex partner.
A jointly held bank account
Most people assume that having a shared account with another person means that they are entitled to half the amount that is held in that account. However, this is not the case. Both individuals are entitled to the full amount within the fund. In other words, they both own the full amount.
This means that legally, either individual would be able to empty the account of its full content. However, when you are in the process of separating from your partner, this would generally not be the smartest move. This is because a property settlement will normally occur after a separation, and this means that you should be very careful with anything that you do to your financial assets.
Your property settlement
A property settlement is the process by which you and your ex partner will have a fair and equitable division of assets. Your joint bank account will most likely be counted as an asset and will thus be relevant to your property settlement.
A property settlement can be done either with or without the court’s assistance. This will most likely depend on the status of your relationship with your ex partner. If you are on good terms, you should endeavour to have a negotiation with your ex partner as to how the financial assets should be divided. You may choose to seek legal advice during this process.
During your property settlement you should make sure that both you and your partner are taking into account all financial assets, debts and other non-financial contributions. These factors are relevant for deciding how the assets should be split, and are important for ensuring that the future livelihood of both individuals is sustained.
What does a property settlement mean for my joint account?
As your joint account will most likely be counted as a financial asset, it will be taken into account during your property settlement. Hence, as stated before, emptying your joint account would generally not be the best idea. This is because emptying your account without the consent of your ex partner could lead to questions from the court about your motives. Furthermore, any accusations will most likely be your ex partner’s word against yours and thus will be difficult to disprove. All this culminates into more time and resources wasted and will only heighten tensions between both parties.
Even if you are not accused of anything by your ex partner, if you choose to take out the funds from the joint account and spend them, they could be attributed to you during your property settlement. This means that it can be determined that you have already ‘received’ a portion of your property that would have been attributed to you. This will mean that you are given less assets during the property settlement process and may even leave you in a more disadvantaged position.
Is there anything I can do if I am worried about my money?
The best thing you can do if you are worried that your partner will try to take the funds is to freeze your joint account. You can do this by contacting your bank. This will ensure that neither individual will be able to withdraw any funds without the other person’s consent.
If you need any assistance regarding your finances after separation, please feel free to reach us via our contact page.
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