Transferring money from the joint account after separation
When Separation occurs, it might be tempting to go to the joint bank accounts and transfer as much money as possible. Before doing that, here are some things to consider.
It’s best to hold off on heading into the branch or getting onto the online banking for a number of reasons.
Firstly, this has the potential to blow up any goodwill between you and your former partner. And secondly, it’s going to make it more difficult to resolve your property settlement.
Sometimes, in an emergency, a court will grant an injunction order to freeze the accounts, ensuring no-one can take money out of them.
If you have company or trust fund accounts, you need to speak to a family law specialist before making any withdrawals, as there could be legal and tax ramifications.
There are a couple of circumstances where it’s ok to take money from a joint account, but (again) we suggest you get urgent specialist Family Law advice before you do:
- If you have no other access to funds where your partner does, or your partner is withholding financial support from you
- If you have been the homemaker and do not have a job or sufficient income to meet the needs of yourself and your children
- If there are significant funds in the joint account, and you are worried your partner will deliberately deplete the property pool and therefore your entitlements to a property settlement
If your ex takes money from a joint account and spends it “recklessly” – for example, at the local casino – the court will add that amount back into the property pool for the property settlement. If the depletion of funds has occurred recklessly throughout the relationship the court may treat that a “negative contribution” by that spouse.
However, if the money is spent on housing, groceries, or clothing for yourself or your children, the courts will see that as legitimate expenditure.
Options and safety steps:
Firstly, ask the bank to place joint signatures on the account. This will prevent both you and your partner from withdrawing funds without you both consenting.
You can also withdraw half of the funds in the account and leave the rest for your ex-partner. The level of conflict, amount of funds in joint accounts and your financial circumstances will determine how you approach this issue.
During court proceedings and property settlement, you will both be required to disclose all your financial information and provide documents.
Think about obtaining bank and credit card statements, details of your mortgage or rental agreement, utility bills, car registration documents and tax returns.
Doing this sooner rather than later can help you both agree to a property/financial settlement and be able to move on with your lives much more quickly.
Open a new bank account in your name only and if you have been using a credit card with your partner as the primary cardholder, apply for a credit card in your own name.
Many couples choose to keep their finances as joint until certain debts are paid off, for example if you decide to sell your former marital home.
If you need advice on property settlements, joint bank accounts, or any other aspect of family law, contact Michael Lynch Family Lawyers to speak to one our specialist solicitors. Call: (07) 3221 4300 or email: [email protected]
