Throughout your marriage, you and your partner had complete access to and control over the money in your joint accounts. Although it is permissible to empty them, the conventional rule is to withdraw no more than 50% of the money from your joint accounts prior to divorce.
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When you’re getting divorce often the question becomes, should you empty out your bank account in anticipation of the divorce?
What’s the theory?
The theory is if you empty out the bank account you won’t have to split it with your spouse.
That thinking is extremely misguided.
The Truth About Separate And Marital Properties Of People
Societies have evolving views about marriage and the concept of community in managing marital resources. Today’s generation is no different.
A recent Morning Consult research revealed millennial couples are more likely to have separate bank accounts. The poll’s findings showed that 40% of millennials, or people aged 23 to 38, said they have a separate bank account from their partner or spouse.
No other generation has such a high percentage of individuals who maintain a separate account from their partner. In actuality, only 31% of Gen Zers between the ages of 18 and 22 and 35% of Gen Xers between the ages of 39 and 54 have separate accounts. Of all age groups, boomers, or those between the ages of 55 and 73, were the least likely to say they keep separate accounts.
Couples in the millennial generation are more inclined to keep separate accounts for a variety of reasons.
The Great Recession, which many millennials experienced as children, may have made them more careful with money matters. Many of them are also the offspring of divorced boomers, and they could be leery of becoming too dependent on a partner’s financial security.
Since millennials marry less frequently than older generations do, they might not be as prepared to merge their finances or be as dedicated to doing so. Additionally, a lot of people have significant student loan debt when they first start dating, which may make them hesitant to combine their finances with their partners.
This trend may continue for several generations more.
The Pitfall Of Love Withdrawing Everything From The Bank
If you empty out your bank account and then two years later there’s a divorce nobody will complain.
If you empty out your bank account and the next day or the next week or in the next month you file for divorce. There will be consequences. There will be a request for an accounting as to where the money went.
It will be very obvious the account was cleared out. In all likelihood, expect to be required to either put that money back or at least put half of it back. Half of it belongs to your spouse. So it’s probably not a great idea to clean out your bank account.
It might make sense to empty out at least your portion of it and put it in a safe place. If you take 100 percent of the proceeds and you hide it, you’re going to have some difficult answers the court is going to ask of you.
There will probably be serious repercussions if one spouse completely drains a joint bank account, particularly if this is done with the intentional aim of depriving the other spouse of it and/or in disobedience of a judge’s orders. The court is likely to punish the behavior with fines or a mandate to pay the opposing side’s legal bills in addition to offsetting this sum in the remaining asset and debt split.
For instance, if a wife withdraws $35,000 from a joint savings account a week before filing for divorce, the court may require her to pay her ex’s legal costs as well as give her ex-spouse the $35,000 in property that would have been his if she hadn’t done so.
You might have asked for and obtained an ex parte order to maintain the status quo of your joint accounts after you or your spouse filed for divorce. This order prohibits you and your spouse from taking any withdrawals from them, other than those required for living expenses. Keep in mind state courts normally will not send this order to the financial institutions where your accounts are held.
If you (or your spouse) continued to abuse them after the order was made, you risked being charged with contempt of court. In addition to replacing the lost money, you can also be required to pay your spouse’s legal expenses and a penalty.
It is doubtful Michigan courts will excuse your actions if you depleted your bank accounts. Your punishments will be proportionate to how serious your actions were. You can be required to return your spouse’s portion of the funds or exchange it for something of equivalent value from you.
Your divorce settlement could also suffer from the following:
- Demand you pay monthly alimony payments in order to make up the missing funds (or reduce the alimony award you might have otherwise received)
- Give your spouse a larger share of your assets than you had anticipated.
- Want you to contribute to some of your spouse’s expenses (lawyers, forensic accountants, investigators, expert witnesses, etc.)
- Apply costly sanctions
For this reason, if you have concerns about when you can take money from a joint account after a divorce, it’s crucial to speak with a divorce lawyer. It’s better to do the talk before, not after you withdraw the funds.
When Love Becomes Surprisingly Practical
Yes, you may need the money to protect yourself in the event of a divorce. You just can’t ignore and make a unilateral decision about your joint accounts. Your fear or apprehension about your funds is not unique to you. It is a worry to all types of couples regardless of generation.
Nowadays, millennials we mentioned, tend to share the concept of keeping their finances separate.
The benefits of keeping it separate.
There are undoubtedly benefits to keeping separate bank accounts, such as more freedom to make purchases without consulting a spouse first.
Couples who keep their finances separate may dispute less over money since each person can make the purchases they want. In the event of a split, having these distinct accounts may also make it simpler to share assets. Additionally, since they each have their own accounts, young people are less likely to worry about getting stuck in a partnership due to financial reliance.
The downside of keeping it separate.
Unfortunately, there are drawbacks millennials and other people who keep separate accounts must take into account. For instance, it could be more challenging to achieve shared financial objectives. Separate accounts can increase the likelihood of financial infidelity since it’s simpler for one person to conceal purchases their partners wouldn’t approve of and behave less responsibly. They can also produce more arguments about how spending should be divided.
Anyone in a committed relationship should keep in mind that their partner’s financial decisions will have an impact on them as well, especially when it comes time to start a family or make significant joint purchases like a home.
Expect the best of marriage but prepare for the worst.
In the most likely event of a divorce or if you do anticipate a divorce becoming part of your future, it is best to take the steps now to prepare for that future. Here are some advice to make practical preparations for the future
Establish financial independence from your spouse once you start the divorce process by opening separate bank accounts. It’s time to open your own bank account now you realize there are costs associated with divorce and that you might be looking for a new place to reside. This will give you financial autonomy and guarantee. You have the means to support yourself after the divorce.
Prior to finalizing your divorce, it is advisable to have a few months’ worth of salary saved up in a personal account. To avoid charges you are hiding marital assets, be sure to tell your other half about the personal account and the money you are putting in.
Despite the fact most divorces are quite amicable, some can get tense, and a spouse may try to damage their former partner’s assets or credit. You should take the required steps to safeguard your finances if you suspect your partner may start using joint accounts to make purchases or wasting marital money.
Remove yourself or your partner from shared credit card accounts, or make sure that both of you sign for purchases. If you and your spouse continue to receive mail at the same address, you might want to think about setting up a post office box to make sure your spouse cannot access your personal financial records.
Be prepared to battle for spousal support if necessary. For example, if you were a stay-at-home parent during your marriage, did not work full-time, or earn less than your spouse, you may be entitled to spousal support. The court will have to take into account a variety of factors when deciding whether to award support and how much support will be given if you and your husband are unable to agree on spousal support payments.
Prepare to talk about your needs, your quality of living during the marriage, and the reasons for the divorce. Sadly, a lot of people have difficulty getting their full spousal support payments, even after a court ruling. To find out your possibilities for enforcing a spousal support order, you might need to talk to your lawyer.
If you’re think of clearing the house instead of the bank, you may want to read up about “What Can I Do If My Ex Left & Took Everything In Our Home” to get a perspective about consequences.
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