As a New Jersey divorce attorney, I am regularly asked this question:
"Can I remove money from a joint bank account at the beginning of our divorce?"
My answer is usually: Maybe. But don't make that decision without talking to your divorce lawyer first.
Just because your name is on an account and you have the ability to withdraw money doesn't necessarily mean that emptying the account is a good idea during a divorce.
Can You Withdraw Money From a Joint Bank Account?
If you and your spouse have a joint checking or savings account, either spouse may have the practical ability to withdraw money from it, depending on how the account is titled and whether there are any court orders or agreements restricting what you can do.
But having access to the money and being entitled to keep it in your divorce are two different things.
If there is already a court order or agreement prohibiting either spouse from transferring, spending, or removing certain assets, follow it. Don't touch the money without first speaking with your lawyer.
And be especially careful with retirement accounts, investment accounts, and other significant marital assets. Those can involve additional legal and tax issues and generally shouldn't be moved around simply because a divorce has started.
Don't Empty the Account
Let's say you and your spouse have $20,000 in a joint checking account.
One way to really offend your spouse, and probably make your divorce more contentious, is to wake up one morning and clean out the entire account.
Think about the message you're sending:
"I took everything, and there's nothing you can do about it."
That's probably not going to go over very well.
There may also be practical consequences. Checks can bounce. Automatic payments may fail. Household expenses might not get paid. And your spouse may immediately run to his or her lawyer and ask the Court to get involved.
A New Jersey Family Court judge can consider what happened to marital money during the divorce and, depending on the circumstances, may require funds to be accounted for or effectively credited back when the marital assets are ultimately divided.
What If You Need Money?
This is where things become more complicated.
Maybe your spouse has historically supported the household and suddenly stopped. Maybe you need money for ordinary living expenses, your children, or legal fees. Maybe you're concerned that your spouse is going to empty the account before you have an opportunity to protect yourself.
Those are legitimate concerns.
But don't assume that the answer is simply to grab as much money as you can before your spouse does.
In some circumstances, accessing a reasonable portion of available joint funds may be appropriate. In others, your lawyer may recommend seeking an agreement with your spouse or asking the Court for financial relief.
What you should do depends upon the particular facts of your case.
Protecting Yourself Is Different From Hiding Money
There is nothing wrong with wanting to protect yourself financially when you're facing a divorce.
There is something wrong with trying to hide, transfer, waste, or give away marital assets simply to prevent your spouse from receiving a fair share.
New Jersey courts can consider the dissipation of marital property when determining equitable distribution. In other words, moving money around doesn't necessarily make that money disappear for purposes of your divorce.
And trying to outsmart your spouse can sometimes create a much larger and more expensive problem.
Talk to Your Divorce Lawyer Before Moving Money
My general advice is simple: before making a significant withdrawal from a joint account during a New Jersey divorce, talk to your lawyer.
Find out whether there are any court orders or agreements already in place. Determine what the money is needed for. Understand whether the account is marital property and what consequences could result from taking funds out of it.
Sometimes doing nothing is the smartest decision.
Sometimes you genuinely need access to money and should take steps to protect yourself.
But you want to make that decision strategically and legally, not emotionally.
If you're considering divorce and want to better understand how to protect your money, property, and other assets, my free Divorce Smarter Course explains important financial issues you should understand before and during a New Jersey divorce.
Until next time,
Steve