Breaking Up? Here’s What to Do About Joint Bank Accounts

A joint bank account can make life easier for a couple. You cover payments and expenses with the same account, simplifying budgeting and money management. But sometimes relationships come to an end. When that happens, a joint bank account suddenly is a burden. We have some tips to help you navigate how to split a joint bank account.

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7 Essential Steps to Split a Joint Bank Account

Breakups are often messy — especially if you share a mortgage, bank accounts and bills. Add children to the mix, and things can get complicated, fast.

When a breakup is inevitable, make sure you protect your assets. Here are some expert tips to help you keep your funds safe throughout the process.

1. Discuss Next Steps Together

Some breakups are amicable. If you’re lucky enough to have a partner who will sit down with you and create a plan, take that opportunity. Whether you’re married or not, and whether there are children or not, you’ll need to deal with joint accounts.

Accredited family mediator Louisa Whitney of LKW Family Mediation recommends discussing how you feel about the joint account. Has its purpose changed now that you’ve decided to separate?

“If the account is used solely to pay the bills, then it may stay as it is, pending working out more long-term financial decisions,” Whitney said. “If it’s used for joint expenditure, do you feel something needs to change or that some ground rules would be helpful?”

2. Consider a Mediator

If you can’t have an amicable discussion about your situation, don’t assume you’ll only be communicating through attorneys moving forward. A mediator can help a couple work through the details of divorce and how to split a joint bank account.

“Talking about money can be really uncomfortable in a separation,” Whitney said. “Especially so if money was an issue that caused arguments during your relationship. If you’re struggling with having constructive discussions, then enlisting the help of a family mediator to help you have those discussions may be useful.”

Melissa Murphy Pavone, a certified financial planner (CFP) and certified divorce financial analyst (CDFA) with Oppenheimer & Co. Inc., found that a CDFA can provide some much-needed financial advice in the midst of a divorce.

“CDFAs will take a deep dive into property and tax issues, retirement plans and some little-known IRS rules that apply to people getting a divorce,” she said.

3. Contact Your Bank

Aside from your divorce attorney, the best resource to guide you through financially splitting up is your lender. They likely see plenty of separations involving joint bank accounts. If you’re concerned about your partner clearing out your account, attorney Lois Liberman, who is a partner with Blank Rome, said you can request limits on the account.

“If you have concerns about your spouse trying to take more than their appropriate share of a jointly held account, you can contact the bank and advise them that you do not authorize any transfers more than $X (i.e. $5,000) without written consent,” Liberman said. But she warns that this can sometimes backfire. “Unfortunately, sometimes with certain banks, this directive will cause them to shut down the normal transfers until they get joint instruction.”

But as divorce attorney Holly J. Moore at Moore Family Law Group points out, laws can vary from one municipality to the next. In California, for instance, you cannot remove a spouse from a joint account once someone initiates a divorce. In that case, she recommends opening a new account. Then you can move your personal funds and, to remain in good standing in the court’s eyes, give your spouse notice that you will remove the funds and not deposit additional money into the account.

“It is advisable to consult with a divorce attorney who can guide you through the legal aspects and ensure that your actions comply with divorce laws and that you don’t take any action that could come back to bite you later,” Moore adds.

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4. Set Up a New Account

Even before you close the old account, you’ll want to have a new account that’s only in your name. You can then set up deposits and bill payments through that account and transfer any funds you’re approved to take from the joint account.

Attorney Tracy Moore-Grant, founder of the Amicable Divorce Network, takes that tip one step further. She not only recommends setting up a new solo account, but she also advises setting it up at a completely different bank from the one you shared with your soon-to-be ex.

“Often banks link accounts together unwittingly, and you do not want your spouse to have access to this new account,” Moore-Grant said.

5. Move Funds

You may have regular paychecks coming into your new solo account. However, you’ll likely need some of the money you shared with your partner. Moore-Grant says that technically, you could go in and remove 100% of the funds without approval. However, she typically advises clients to only take half.

“Be sure to not spend it frivolously,” Moore-Grant cautions. “You may be asked at some point for an accounting of the funds you removed.”

As mentioned above, though, you’ll want to make sure you follow local laws when removing funds from a joint account. Your divorce attorney can give advice on this part of the process.

6. Divide Bills

If you share a joint bank account with someone, chances are you also share bills. This is another area where breakups can get complicated. Whether you’re divorcing or simply moving out of a domestic partnership, you’ll go through a tricky transition period where you need to pay bills but you no longer live under the same roof.

“I typically advise clients to gameplan how their bills would get paid and come up with a written agreement that both would adhere to during a separation,” said Derek Jacques, divorce attorney at The Mitten Law Firm. “This can be done with or without the help of an attorney, but I would advise having an attorney look over the document prior to signing it.”

7. Protect Your Credit

Breakups are sometimes tough on your credit score. The legal proceedings of a divorce won’t directly affect your credit, but you may experience an indirect impact. If your ex doesn’t pay bills in your name, it will hit your credit as if you neglected them yourself.

Moore-Grant advises a proactive approach to safeguarding your credit. That means monitoring all the bills that are in your name and making sure everything is paid.

“Make sure that you have access to any online accounts in your name,” she said. “Be prepared to log in to each one and make sure you have your username and password for all accounts you are responsible for.”

With all the emotions that come with a breakup, it’s easy to put finances on the back burner. But putting in the work to split a joint bank account fairly means both you and your ex can reduce any financial consequences. In some cases, a mediator can help resolve things amicably, rather than communicating through separate attorneys and waiting for the court to decide.

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Stephanie Faris is a professional finance writer with more than a decade of experience. Her work has been featured on a variety of top finance sites, including Money Under 30, GoBankingRates, Retirable, Sapling and Sifter.