In California, the law treats all assets and debts acquired during the marriage as community property, which means they are owned equally by both spouses. This includes money held in joint bank accounts. Upon divorce, these assets are typically divided equally unless there’s a prenuptial agreement stating otherwise.
However, that can be easier said than done. The following eight tips can help you manage your joint accounts more effectively during your split.
1. Prioritize Communication and Agreement
Open and honest communication is vital. If possible, discuss the joint bank account with your spouse to reach an agreement on how to handle them during the divorce process. This discussion might involve deciding whether to close the account, divide the funds, or maintain the account for specific expenses like mortgage payments or childcare.
2. Maintain Documentation and Records
It’s essential to keep detailed records of all transactions, especially around the time of separation. This will help in proving the account’s status and transactions if disputes arise during divorce proceedings.
3. Follow Automatic Temporary Restraining Orders
When a divorce is filed in California, Automatic Temporary Restraining Orders (ATROs) come into effect. These orders prevent either spouse from unilaterally making significant financial moves, including withdrawing all the money from a joint bank account.
4. Consider a Mediator or Legal Advice
In cases where mutual agreement is challenging, consider hiring a mediator. They can facilitate discussions and help in reaching a fair decision. Consulting a family law attorney is also advisable to understand your rights and obligations.
5. Closing or Modifying Joint Accounts
If you decide to close the account, it should ideally be done jointly. If one party is absent, proper legal procedures must be followed to avoid legal repercussions. Sometimes, transforming the joint account into individual accounts is an option.
6. Handling Division of Funds
The division of funds in a joint account should reflect the principles of community property law. Each spouse is typically entitled to half of the total funds unless there are extenuating circumstances.
7. Dealing with Debts and Overdrafts
If the joint account has an overdraft or debt associated with it, this liability is also considered community property and should be addressed in the divorce settlement.
8. Updating Beneficiary Information
Post-divorce, remember to update beneficiary information on all financial accounts, including bank accounts, to reflect your new status and intentions.
Get Professional Help With Your Divorce Questions
Handling joint bank accounts during a divorce in California requires careful consideration and, often, legal guidance. The key is to approach the situation with clarity, documentation, and a willingness to communicate and negotiate. Remember, the decisions made will have long-term financial implications for both parties involved.
Navigating through a divorce and managing joint bank accounts can be complex, but with the right approach and assistance, it can be a step toward a new beginning. At the Viola Law Firm P.C., our skilled divorce attorneys are available to help you with your divorce questions. Learn more about how we can assist you with asset division and more by scheduling your consultation today.