As New York couples go through the divorce process, they will be negotiating the division of assets and liabilities. One of the marital assets they might hold is a joint bank account. With this type of account, couples have several options available to them, depending on their situation.
Closing the account
If couples are planning an amicable divorce, they can go together to the bank to withdraw all funds, divide the funds equally, and then close the account. This is the simplest way to deal with a joint bank account during this process. Since a joint account is held in both parties’ names, they will both have to sign the paperwork to close it, so if one person is unwilling to close it, the other person might need to take a different approach.
If one party is unwilling to close the account and the other party is afraid that person will withdraw all the money, they can ask the bank to freeze the account and then have their lawyer inform their ex. While the account is frozen, neither person will be able to withdraw funds. Another option is withdrawing their half of the money, if it is legally allowed in their state. This might be allowed but only if the official divorce proceedings have not begun.
What happens when one person withdraws all the money?
Because joint bank accounts are marital property, the money in them belongs equally to both. If one person withdraws all the money, consequences might include:
- A court order requiring them to repay the 50% that belongs to the other person
- Additional financial penalties
- A charge of criminal contempt for withdrawing the money
Divorce can result in many complications. To avoid some of them, it might be beneficial to speak with a family law lawyer to assist during the process.