Divorce is often a difficult time, especially when it comes to finances. Everyone seeks to protect their interests, and depending on the situation between the two soon-to-be ex-spouses, this can take some time. That’s why bank accounts and divorce don’t always mix well. Spouses typically open a joint account, and one of the first steps will be to close it. And there are other steps involved that we don’t always think about! Whether the joint account is opened at an online bank or not, we will review what you need to know about bank accounts and divorce.
Bank Account and Divorce: The Joint Account
During a divorce, one of the first things to do is to take care of the joint account. Should you close it or dissociate? It depends on the existing situation between the ex-spouses. Generally, it is simpler to agree to close it so that everyone gets their share. Furthermore, how can we know who is entitled to withdraw from the account? Well, all mutual funds, which include salary, compensation received in addition to wages, equity, and financial investments, are shared when the joint account is closed. On the other hand, anything related to personal funds belongs to the person who brought them in, provided there is proof of traceability. Additionally, personal income (gifts, inheritance) is excluded from sharing.
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If both parties do not agree to close the account, either party can dissociate. In other words, any banking transaction related to the bank account requires the signature of both account holders. This usually leads to the closure of the account but takes longer because everyone must agree. Thus, once the joint account is closed, everyone is free to open a personal checking account at the same bank or another bank. It is therefore time to open an online account. Indeed, we generally prefer to switch banks and choose one that does not charge banking fees and offers free cards. Divorces are expensive…
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File: how to close a joint account
Bank Account and Divorce: The Individual Account
It is often overlooked, but the individual account is also important in a divorce. Indeed, if one spouse grants power of attorney to the other, the latter has free access to the bank account. Let’s remember that a bank power of attorney is a mandate by which the account holder authorizes a third party (the agent) to operate their account. Thus, the bank account and divorce are closely linked if you forget to notify your bank to revoke the power of attorney. The agent can still monitor the accounts of their future ex-husband or ex-wife. Furthermore, the principal remains responsible for the transactions of the account; if the agent makes a transaction that puts the account into overdraft, they will have to pay the costs… To request that their bank terminate the power of attorney, they must send a registered letter with acknowledgment of receipt.
Note: if the couple is married under the community property regime, the money placed in their personal checking account is considered communal. Only what belonged to the person before their marriage belongs to them by right.
Change Your Name at the Bank
Bank account and divorce also concern the name change. Once the divorce has been officially pronounced, it is necessary to change the title of the accounts if you remain with the same banking institution. To do this, a copy of the divorce decree must be sent to the bank along with a copy of the new identity card. If a divorced woman wishes to keep her married name, she must obtain the consent of the judge or her ex-husband.
Bank Account and Divorce: When is Financial Independence Achieved?
Financial independence takes longer than it seems. It primarily depends on the fundamental situation between the future spouses, as the timelines can vary depending on the procedure (amicable or not).
Moreover, in the case of joint credit, they must remain jointly liable until the full repayment of the amount, even after the divorce. Solidarity in debts is indeed a point that is difficult to escape. Unless, of course, the credit is assigned to a single person and does not meet the household’s needs.
It thus seems difficult, in such situations, to be quickly released from any financial relationship with one’s ex-husband/wife. However, when one of the ex-spouses obtains custody of the children, the other must pay them alimony. Or, for example, the person who keeps the housing must also pay compensation to the other. It is these types of expenses that make financial self-sufficiency difficult after a divorce. Therefore, it is impossible to give a precise timeline, as it depends on each individual’s situation.
Bank Account and Divorce: Protecting Interests
The bank account and divorce agree that once a judgment has been rendered, each person can freely enjoy their personal checking account. But the measures to be taken beforehand can be lengthy, and if we want to protect our assets, we must not forget it! Closing the joint account, changing names, assessing incurred debts, changing banks if desired… Once all these transactions are completed, the best interests of each person are protected. As we know, divorce is costly and weakens finances, so the best solution is to find an amicable agreement to limit costs.
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