A joint checking account is a bank account that an individual shares with another individual, typically their spouse. This type of account is often used to pay for different things, such as household bills or family vacations.
The funds that are held in a joint checking account belong to both of the account owners. This means that either of the parties can contribute or withdraw funds from the account.
In the State of California, joint checking accounts are considered to be a type of community property. Under California marriage laws, community property is defined as property that is owned by both of the spouses. This means that unless a bank account is specifically labeled as separate property, a joint bank account and its contents will generally be viewed as marital or community property. For example, suppose that two spouses open a joint bank account after they get married.
Spouse X has deposited most of the money that is in the account. Spouse Y sometimes contributes funds, but not as much as Spouse X.
The spouses continue to withdraw, spend, and share the money that is held in that account throughout the duration of their marriage. If the couple files for divorce in California and their joint checking account still exists, the court will divide the funds that are held in their account equally between the spouses.
This is because joint bank account laws in California classify these types of accounts as community property. This means that even though Spouse X has deposited more money into the account than Spouse Y, Spouse Y will still receive half of the balance in the account.
Can I Pay My Personal Bills from a Joint Checking Account?
Questions regarding whether an individual is permitted to continue spending money from a joint checking account and how much the individual should receive in their divorce may lead to legal disputes and consequences because the answers to these questions are changing constantly.
Joint checking accounts may make getting a divorce in California rather difficult. Other joint bank account laws in the State of California, as well as considerations that may affect how an account is distributed during a divorce, include, but are not limited to:
- The standard definition of community property in general under California Family Code Section 760;
- The date of the couple’s separation versus the date of their finalized divorce;
- Under California state law, money that is withdrawn or deposited before finalizing the divorce may be considered community property;
- The established presumption that property held in joint form, such as a joint checking account, will initially be considered community property by a court pursuant to California Family Code Section 2581;
- The amount that one or both spouses have withdrawn or deposited since the date of their separation;
- Whether certain funds held in the account were specifically intended to be an inheritance or gift for only one of the spouses;
- Determining whether there is evidence that supports an argument that a portion of the joint funds should actually be categorized as separate property under California Family Code Section 2640.
Can I Empty My Bank Account Before Divorce?
Money that is held in a joint bank account is usually not divided until a divorce is finalized. This means that, even though a spouse may have a property right to the funds, they are not free to spend all of the money in a joint checking account because half of it will most likely belong to their spouse.
Under California divorce laws, intentionally spending or wasting money during a divorce may lead to serious legal consequences, including:
- Having to repay a spouse;
- Having to pay for their spouse’s attorney’s fees;
- Having to pay a penalty or fine.
This means that a spouse should proceed with caution before spending money in a joint checking account, even if it is just to pay routine bills. To be on the safe side, they should consider consulting a local attorney in California for further advice.
What if the California Court Issues a Restraining Order or Injunction on Bank Withdrawals?
In some situations, a court may issue, or one spouse may request an injunction to prevent the other spouse from withdrawing money during their divorce. This injunction may be referred to as a Temporary Order Not to Sell Assets.
This injunction may be used to stop withdrawals of funds from a joint checking account as well as to prevent a spouse from selling off any assets, such as:
- Vehicles;
- The marital home;
- Various other shared assets.
If the court does grant an injunction or a temporary order on bank withdrawals, both of the spouses must follow the terms of the order until the court issues a second order that removes or modifies it or the first order expires. If a spouse violates this type of order, their actions may be used against them in future divorce proceedings, and they may be accused of committing fraud or theft.
In California, specifically, the laws governing the ability to withdraw money during a divorce require a two-prong assessment. On one hand, a spouse may be held liable by the other spouse for how they handled the funds contained in the joint checking account, for example, spending too much or gambling. On the other hand, a joint checking account is considered community property, and therefore, a party to that account has a right to use the money in it as though it were their own account.
As noted above, spouses who are divorcing and who have been issued an injunction or temporary order on bank withdrawals by a court are required to comply with the terms of that court order, or else they can be held legally responsible for violating it. On the other hand, if a couple is divorcing and they have not received an injunction or temporary order on bank withdrawals, using the funds will not necessarily be illegal.
However, the spouses should proceed with caution and do their best to spend only minimal amounts. They should also keep track of their transactions for proof in the event of a legal dispute.
What Happens if I Deposit Money into Our Joint Account After We Are Separated?
The answer to this question may vary depending on the facts of a case; funds that are earned after a separation are typically classified as separate property. If, however, the spouse who earns money deposits their separate funds into a joint checking account and does not specify the amount, the date, and any other necessary relevant information that may help to identify the transaction, then this may affect how the money is classified, and it may potentially become community property.
Should I Contact a California Family Lawyer Before Spending Money from Our Joint Checking Account?
You may be getting a divorce, and you are not sure whether or not you can spend the money that is held in a joint checking account or not. If so, you should consult with a California divorce lawyer prior to spending any more of the money in the account. Your lawyer can advise you of your obligations, rights, and protections when it comes to marriage dissolution and linked community property.
Additionally, if you are involved in a dispute that is held in your joint checking account, your lawyer may be able to help you settle the issue outside of court or, if that is not successful, will represent you during court hearings. This applies regardless of whether or not you wish to sue your spouse or if your spouse is suing you for an issue that pertains to joint checking account funds.
