September 25, 2013

Withdrawing Funds from Shared Accounts in a Divorce

How to finance divorce with shared accounts

It is no secret that filing for divorce costs money, and hiring legal counsel requires the payment of a retainer fee. Individuals considering divorce often grapple with how to approach gathering the money to proceed. The timing, the amount, and whether or not to discuss the withdrawal depends entirely upon your situation. Consider the following before making any drastic moves and seek the advice of a seasoned divorce attorney before withdrawing funds from shared accounts.

The nature of your relationship determines the how to approach withdrawing funds from shared accounts. Ideally, it is best to discuss with the other spouse to eliminate any retaliation withdrawals. “Getting what’s mine” can turn a peaceful divorce into a battle (especially if the spouse was unsuspecting of the divorce). If a spouse does not anticipate or know of the impending divorce action, this behavior can cause unnecessary emotional and financial damage. Historically, couples who kick off divorce proceedings with one party taking cash from shared accounts will begin a cycle of vengeful spending or liquidation of assets from shared accounts.

In anticipation of unwanted retaliation through liquidation, withdrawing funds from shared accounts can be restricted prior to even filing for divorce. An Automatic Temporary Restraining Order can be petitioned from the Court. This is a court order which freezes assets and goes into effect automatically upon events, including the filing of a divorce. This way, neither party will be able to get into the accounts and deplete them before equitable distribution. Of course, paying for an attorney to file this action will require individual financing.

Higher income cases lend themselves to more scrambling and underhanded tactics. For example, a spouse may want to compare the value of a joint account versus the value of all assets combined; this includes properties, savings, IRA’s and 401K plans. Taking half of a checking account may only be a quarter of all assets. By the time the funds are taken, negotiating may be compromised. Instead of making this division independently, it is smarter to seek counsel and obtain professional advice on how to approach liquidation.

If conditions are amicable, most individuals should consider withdrawing only the funds necessary to hire counsel as this would be considered a reasonable expense in light of the circumstances. Even in this situation, it is best to speak with an experienced divorce attorney who can present various options and possible outcomes. Call the Law Offices of Michael Kuldiner, P.C. to speak with an experienced divorce attorney, (215) 942-2100.