One of the key goals in a divorce is to separate your finances from your spouse’s. It’s part of gaining the independence from each other you desire. So how do joint bank accounts and joint credit cards fit into this?
You will need to close all your joint bank accounts and credit cards, yet this is not something to rush into as doing so could create problems.
Closing accounts together is the safest
If you close accounts and cards together, it can prevent accusations of the closing party trying to hide assets from the other or starve them of cash. Both of these have been known to occur in divorces. Some banks will insist you both sign to close accounts, others may allow just one of you to do so. In all cases, it is better to do it together.
Timing could matter
Let’s say you and your spouse agree that you will keep all the contents of one particular account. You move ahead, close that account and transfer the money into a personal account. Depending on the timing, that might push you over a certain tax threshold, and end up costing you more than if you had waited until later in the divorce process.
You also need to consider any outgoing payments from an account you wish to close. For instance, if you close it just before your mortgage or loan payment is due, and do not set up the new direct debit in time, it could cause you to default and incur penalties.
As you can see, managing your accounts can be complex when divorcing, so it’s best to consult someone who can guide you to make the right choices.