When you are considering a separation or divorce from your spouse, or in the event a dissolution of marriage proceeding has begun, it is important to consider whether or not actions can (or need to) be taken to prevent dissipation of assets by your spouse, and to consider other actions to protect your interests, prior to a final resolution of your case. You should discuss these issues with an experienced family law attorney to determine whether or not you should take special actions to safeguard property and if so, the timing and notice (if any) to be given to your spouse of actions taken. Over the next 7 of posts, I will discuss several topics you should discuss with your attorney and weigh the risk that your spouse may take action if you do not, against the possibility that action by you may anger your spouse. Of course, time can be of the essence so don’t wait. While you are thinking, your spouse may be taking action.
In the first part of this series, I will discuss issues to consider regarding Financial Institutions such as banks, savings and loans, credit unions, stock brokerage accounts, and other similar accounts.
Either party to a joint account can in most cases go to the financial institution and clean out the balance. You should talk with your attorney about whether you should withdraw some or all of the amounts in your accounts, close the joint account and give your spouse a check for his/her share of the account, with a separate check for you. While withdrawing large sums of monies from a joint account or closing the account is not advisable in all cases since it may exacerbate the tensions between you and your spouse, may violate certain local court rules or existing court orders, and may also trigger substantial income tax consequences, it should be seriously considered if you believe your spouse will make unreasonable withdrawals from the account. It is usually best not to “freeze” the joint accounts, because, while your spouse will be denied access without your approval, you would also be denied access.
You should consult with your attorney about:
- Setting up separate accounts in your own sole name, preferably at different financial institutions than those that had your joint accounts;
- Directing your paycheck to your new individual account(s) in your name only, and no longer depositing to your joint accounts; and
- Taking anything out of any safe deposit boxes. It is a good idea to make copies of everything that is in it and make a copy of the “signature card” that keeps track of access to the box.
All of these actions can cause negative responses from your spouse, but may, in the end, have been better than doing nothing at all.