Handling finances during divorce proceedings
Posted on behalf of Michael D'Amico of D'Amico, Griffin & Pettinicchi, LLC on Sep 26, 2013 in High Asset Divorce
Connecticut residents often focus on how money will be handled after they dissolve their marriage, but not everyone thinks about how they will pay for things during the divorce itself. It is important for people to give considerable thought to how they will handle their finances during the divorce proceedings because it is not uncommon for joint bank accounts to be frozen by a judge during this time. They would do well to set aside money in a separate account before they or their spouse files for divorce.
Still, the question of how much money people should or can remove from a joint account remains. According to most state laws, individuals are entitled to 50 percent of whatever they and their spouses have in joint accounts. For this reason, experts state that people can remove up to half of a joint account's assets and put it into a personal account. It is not generally recommended that individuals withdraw more than half of the assets from an account even if there are other accounts held solely by their spouse that may have more money in them.
There are two main reasons for this: First, if someone sees their spouse removing large amounts of money from a joint account, he or she may begin to hide assets and remove money from other accounts. Judges also may look poorly on someone who removed large amounts of money from a joint account.
Divorce involves a number of complex financial issues, including evaluating how retirement accounts will be split up, deciding who ends up with the marital home and determining which assets are considered marital property. A lawyer could explain how state laws may impact someone's case as well as represent his or her interests in court if needed.
Source: Forbes, "Divorcing Women: When Can You Withdraw Funds From Joint Accounts?", Jeff Landers, September 17, 2013