Protecting Your Interests: What to Do with Joint Bank Accounts When Going Through a Divorce in Perth
Divorce can be a difficult and emotional process, and it can be even more complicated when it comes to dealing with joint bank accounts. Joint bank accounts can often be a source of contention during a separation or divorce, and it’s important to understand your rights and obligations when it comes to these accounts.
At Burra-Robinson Family Lawyers, we understand that navigating the legal and emotional complexities of divorce can be overwhelming. That’s why we’re here to help guide you through every step of the process, including how to handle joint bank accounts during a separation or divorce.
What are joint bank accounts?
A joint bank account is a type of bank account that is owned by two or more people. Each person listed on the account has equal access to the funds in the account, and they can make deposits, withdrawals, and other transactions as needed.
Joint bank accounts can be useful for married couples or partners who want to share their finances and expenses. For example, joint bank accounts can be used to pay bills, manage household expenses, and save for long-term goals.
However, when a couple separates or divorces, joint bank accounts can become a source of conflict. If both parties are not on the same page about how to handle the funds in the account, it can create additional stress and tension during an already difficult time.
What Happens to Joint Bank Accounts During a Separation or Divorce?
When it comes to joint bank accounts, the rules and regulations surrounding them can vary depending on the specific circumstances of the separation or divorce.
If the couple has a joint bank account, they will need to decide how to handle the account after they separate or divorce. There are a few different options that can be considered:
Keep the account open
In some cases, both parties may agree to keep the joint bank account open and continue using it as they did before. However, this can be a risky option, as it requires a lot of trust and communication between the parties. If one party decides to drain the account or make unauthorised withdrawals, it can cause significant financial harm to the other party.
Close the account and split the funds
Another option is to close the joint bank account and divide the funds between the parties. This can be done through negotiation or mediation, or it may be determined by a court order. However, it’s important to note that dividing the funds in a joint bank account can be complicated, especially if there are large sums of money or if the account has been used for both personal and joint expenses.
Freeze the account
If there is concern that one party may try to drain the joint bank account or make unauthorised withdrawals, it may be necessary to freeze the account until the matter is resolved. This can be done through a court order or by contacting the bank directly.
Convert the account to a sole account
Finally, one party may choose to convert the joint bank account to a sole account in their own name. This can be done with the agreement of the other party or through a court order. However, it’s important to note that this option may not be available if the account is overdrawn or if there are outstanding debts associated with the account.
It’s important to note that the specific laws and regulations surrounding joint bank accounts during a separation or divorce can vary depending on the jurisdiction. In Western Australia, the Family Law Act 1975 governs the division of property during a divorce, which may include joint bank accounts.
How can a divorce lawyer in Perth help?
If you are going through a separation or divorce and are concerned about joint bank accounts, it’s important to seek the advice and guidance of a qualified divorce lawyer in Perth. A divorce lawyer can help you understand your legal rights and obligations when it comes to joint bank accounts, and they can assist in negotiating with your ex-partner or their legal representation to reach an agreement on how to handle joint bank accounts.
A divorce lawyer can also represent you in court if necessary, advocating for your interests and ensuring that your rights are protected throughout the divorce process. They can help you understand the potential consequences of different options for handling joint bank accounts, such as the tax implications of dividing funds or closing an account.
Additionally, a divorce lawyer can assist you in gathering and organising financial documentation related to joint bank accounts and other shared assets, which can be a crucial aspect of property settlement negotiations.
At Burra-Robinson Family Lawyers, our team of experienced family lawyers in Perth has helped numerous clients navigate the complexities of divorce, including issues related to joint bank accounts. We understand that every family is unique, and we will work with you to develop a personalised strategy that meets your specific needs and goals.
What Steps Should You Take Regarding Joint Bank Accounts During a Separation or Divorce?
If you are going through a separation or divorce and have joint bank accounts with your partner, there are a few steps you can take to protect your interests and minimise potential conflict:
- Seek legal advice: As mentioned earlier, it’s important to consult with a qualified divorce lawyer in Perth to understand your legal rights and obligations when it comes to joint bank accounts. They can help you navigate the complex legal and financial issues that may arise and advocate for your interests throughout the divorce process.
- Communicate with your partner: While it may be difficult to communicate with your ex-partner during a separation or divorce, it’s important to try to reach an agreement on how to handle joint bank accounts. Having an open and honest dialogue can help avoid misunderstandings and potential conflicts down the line.
- Document everything: Keep detailed records of all financial transactions related to joint bank accounts, including deposits, withdrawals, and transfers. This can be important evidence in property settlement negotiations or in court, if necessary.
- Consider freezing the account: If you are concerned that your ex-partner may try to drain the joint bank account or make unauthorised withdrawals, consider freezing the account until the matter is resolved.
- Be prepared for unexpected expenses: If you and your ex-partner decide to close a joint bank account, be prepared for unexpected expenses that may arise as a result. For example, if you have bills or other expenses that were previously paid from the joint bank account, you may need to find alternate ways to pay for them until a new arrangement is established.
What Should You Do If Your Ex-Spouse Empties Your Joint Bank Account?
It’s a common fear among separating couples: What happens if one party cleans out the joint bank account? Unfortunately, this can and does happen, and it can leave the other party feeling helpless and vulnerable. So, what can you do if your ex-spouse has emptied your joint bank account?
If the money was used to buy an asset, such as a new car, the asset can be included in the pool of matrimonial assets for division between the parties. It doesn’t matter whether the purchase was made after separation; if it was purchased with money that was there before separation, it can be included in the pool of assets. However, if the money was spent on something like a holiday with a new partner, it’s gone, and it’s not available for division between the parties.
In the past, Family Court judges may have “added back” to the matrimonial pool of assets the money spent on a holiday with a new partner, treating it as an early distribution of assets and taking the money from the offending party who would have otherwise received. However, recent court rulings have introduced greater uncertainty and unpredictability. Instead of always applying add-backs, judges are now required to “take into account” where the money has been spent, and where an asset or property no longer exists in arriving at a just and equitable outcome for both parties.
This underscores the importance of seeking prompt advice from a competent family lawyer if you are considering separating, or if separation has occurred. A family lawyer can provide guidance on your legal rights and obligations and help you navigate the complexities of property settlement. While the consequences of one party’s bad or unreasonable conduct cannot always be recompensed in a settlement or court judgement, a family lawyer can work to protect your interests and ensure that you achieve the best possible outcome in your case.
Burra-Robinson Family Lawyers
Dealing with joint bank accounts during a separation or divorce can be a complex and emotional process. It’s important to understand your legal rights and obligations, communicate openly with your ex-partner, and seek the advice and guidance of a qualified divorce lawyer in Perth.
At Burra-Robinson Family Lawyers, our team of experienced family lawyers in Perth is here to help you navigate the complexities of divorce and achieve the best possible outcome for you and your family. Contact us today to schedule a consultation and learn more about how we can help you with your divorce case.