One very commonly asked question about Indiana divorce we hear at Halcomb Singler, LLP, is what is going to happen to my bank account when I file divorce? While some spouses have kept separate bank accounts over the course of their marriage, many married couples only have joint bank accounts. A common fear is that once our client files his or her divorce petition that the non-filing spouse might go to the bank and clean out all of the accounts. Many divorce clients wonder if they should pre-emptively get money out of the accounts over a period of time or right when the petition is filed, prior to their spouse receiving a copy. In this blog we will address this question pursuant to Indiana law.
First, it is important to note that a joint bank account doesn’t mean that only half of the funds on deposit can be accessed by one spouse or the other. In Indiana, a joint bank account holder can withdraw all of the money in the account.
Second, some people have the mistaken belief that when an Indiana divorce petition is filed, that bank accounts are frozen. This is untrue. While bank accounts may be frozen as a result of a Court order, this is not an automatic step in Indiana divorce. Frozen bank accounts in Indiana are more often the result of a creditor obtaining a judgment against you or your spouse or as a result of unpaid income tax liability. If neither you nor your spouse have past-due debts you can assume that your joint account will not be frozen. Your account will not be frozen as a matter of law as a result of the filing of your divorce petition.
Third, just because you didn’t earn any of the money in a joint account doesn’t mean that you aren’t legally entitled to take a withdraw. At the same time, if you earned all of the money in the joint bank account it does not mean that none of the funds in the bank account are your spouses’ funds. Indiana divorce law attempts to divide marital property in half as of the date of the filing of the divorce petition.
So, what’s the best practice when it comes to your bank account just before divorce? The best thing to do is to meet with an attorney to discuss your specific situation. Chances are that it would not be helpful to your divorce case to take 100% of the funds out of a joint bank account just prior to filing for divorce. Our divorce attorneys at Halcomb Singler can advise you how to proceed with your bank accounts and can advise you how to recover property in the event your soon to be ex-spouse cleans out a bank account once he or she receives service of the divorce petition.
Prior to your divorce filing it is also a good idea to open up a personal account that you will be able to use for your income after the filing of a divorce. Since Indiana divorce assets are measured as of the date of the filing of the divorce petition, you are free to have your post-filing earnings deposited into your individual account and spend those funds as you see fit.
Unfortunately, there is no general answer as to how to best prepare your joint bank account for divorce. It is best to meet with an attorney to review your case and discuss your options. For a consultation with an Indiana divorce attorney at our Carmel, Indiana office call (317) 575-8222. Since the time and knowledge of our divorce attorneys is valuable, there is a $200.00 fee for a meeting with a family law attorney.