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Closing or Withdrawing from Financial Accounts During a Divorce

Posted by Unknown | Jun 25, 2020 | 0 Comments

Money, or lack thereof, is one of the most pressing issues for anyone going through a divorce.  While most spouses nowadays have separate sources of income, most marriages involve numerous co-owned or combined assets such as savings accounts and investment portfolios.  Depending on the state of the marriage, it's not uncommon for one spouse to withdraw from or close out these accounts behind the other one's back, prior to the filing of the divorce complaint.  Some people do this out of spite, but there are some very pressing situations in which one spouse feels the need to gather as much of the marital assets as possible.  Individuals in abusive marriages, for example, may be justified in believing that they will be cut off from the marital finances if they choose to leave.  Another common situation is when one spouse is blowing through the marital savings due to an addiction or inability to live within his or her means.

This is a tricky situation, since there are no laws that explicitly prohibit you from withdrawing on such accounts unless there is already a court order prohibiting you from doing so.  Consideration should, however, be given to whether you should do so since the courts endeavor to maintain the status quo of the marital finances until the final judgment.  Of course, it's not possible to keep things exactly as they are if spouses are already living apart, which is why orders for child support and pendente lite alimony are established at the beginning of the divorce proceedings.  

Filing for these forms of support, instead of cleaning out or taking a big chunk out from all your accounts is generally the recommended course of action.  One of the dangers in closing out your accounts is how it appears to the court, which looks to preserve the marital assets in order to prevent waste, and to make the fairest possible decision in the final distribution.  Taking substantial amounts out of the joint accounts may appear as an attempt to dissipate the marital funds, thereby lowering one's income threshold for the purpose of alimony and/or child support.  Another consideration, at least for investment accounts, is that you may be in violation of corporate or fund regulations by withdrawing from the accounts while a divorce is pending.  These accounts may need to be divided through a qualified domestic relations order (QDRO), so it's best to check with your broker or investment firm before taking any action.

As a general rule, anything that sounds even remotely questionable should be discussed with your attorney.  Even if your attorney thinks it's a bad idea, he or she may have alternative solutions that can still be of help.  Most importantly, your attorney's suggestions help you stay in compliance with the law and/or avoid losing credibility with the court.  For more information on how to protect your finances during a divorce, please speak with the family law attorneys of Villani & DeLuca, P.C.  

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Vincent DeLuca, Esq.

As a founding partner at Villani & DeLuca, Vincent DeLuca is one of only a few Certified Matrimonial Law Attorney in Ocean County, New Jersey. Mr. DeLuca has helped many clients navigate the delicate details of their own divorce. Mr. DeLuca is also a trained divorce mediator and collaborative divorce attorney. Call today at (732) 751-4991 to speak to Mr. DeLuca or one of our experienced NJ Divorce Lawyers.