Divorce Preparation: Step 7 - Assess the Financial Accounts
We continue with our series on steps to take when divorce is imminent. We are on to Step 7 which is Assess the Financial Accounts.
If you’ve completed the prior steps in this series, then you already know what accounts exist and what the balances are. You need to make a decision about what to do with them.
It is an unfortunate reality that one of the first things that some spouses do when they learn/decide a divorce is imminent is to raid the accounts. This is typically done after receiving particularly bad advice from an adversarial lawyer or a well meaning, but poorly informed friend.
In a perfect world neither party would touch the financial accounts except to pay normal household bills until after the divorce is over. However, if this was a perfect world, you would not be reading this blog, and I would be in another line of work because divorce lawyers would be unnecessary.
That being said I do not recommend that you clean out the accounts. Doing so immediately escalates the conflict and stress of divorce. It also will not be well received by the divorce judge.
So, you don’t want to clean out the accounts, but you want to be protected from your spouse cleaning them out. If you have a reasonable fear that your spouse will raid the accounts, the only reasonable solution that I know is to remove one half of the funds from the accounts and put them in a new account in your own name. Do not hide, dispose, or waste the money. Document carefully where every penny is spent because you will likely need to make an accounting of it later in negotiations or at trial. Additionally, you should not do this for the regular checking account out of which the household expenses are paid unless there is a substantial balance in the account over and above the amount needed for paying the current month’s bills. You do not want to take action that would cause checks to bounce.
I don’t make this as a blanket suggestion. If the money can be kept there and neither party remove it, that is preferred. Another option for certain types of accounts is to put a freeze on the account. Obviously that is only practical for accounts that are not regularly needed to pay bills and regular expenses.
Before you decide how to handle your financial accounts, consult with your lawyer. If they are suggesting you go take all of the money out without a good reason, I would seriously reevaluate the whether that lawyer shares your desire for a civilized divorce.