Joint bank accounts are convenient as long as both people can be trusted to act in a fair manner. Unfortunately, this often isn't the case, especially in divorce. One partner may want to "get even" and use the bank account as a weapon. What can be done about it depends on the circumstances and the type of account.
Advantages of a Joint Tenancy Account
Bank accounts held in two names are often referred to as "joint accounts." The first of two different types of joint accounts is called "joint tenancy," which is typically used by married couples. The advantages are that either person can pay bills, and in the event of a death, the surviving party automatically assumes full ownership.
Disadvantages of a Joint Tenancy Account
There are also some disadvantages of joint tenancy. Primarily, either person can legally make withdrawals for any purpose without the consent of the other. So in the case of a spendthrift spouse, there isn't any recourse for the injured spouse.
Advantages and Disadvantages of a Tenants-In-Common Account
A "tenants-in-common" account is primarily used by business partnerships. In a tenants-in-common account, both partners must agree to expenditures, signified by two signatures on each check. The advantage is that one partner can't run off with all the money without perpetrating fraud.
The disadvantages are that it is inconvenient to require both partners to sign every check, and in the event of death, there has to be another agreement to control division of assets.
The Type of Account and Circumstances Matters
If one spouse empties a "joint tenant" account, there isn't much that can be done, since by definition each has that right. However, if the account had been set up as a tenants-in-common account, the emptying by one partner without the permission of the other would be illegal.
Emptying a Joint Account in the Case of Divorce
However, if one spouse empties an account in contemplation of divorce or after divorce papers have been filed, there is some recourse. The purpose of divorce proceedings is the equitable distribution of assets and responsibilities, so the contents of a bank account, whether removed or not, are still assets and the court will attempt to distribute them fairly.
Unfortunately, if one spouse empties the account and moves the assets out of the country, the U.S. court has little enforcement power. The U.S. court may however, be able to attach other assets held in the U.S.
How to Protect Yourself
To protect yourself from an impending divorce, you can withdraw half the money from any joint accounts and place it in your own individual account, leaving the joint account as the property of the other spouse.
You can also request the bank freeze an account, and close any joint credit card accounts, equity lines of credit, safety deposit boxes, phone bills and utility bills.