Can one spouse empty a joint bank account during divorce?

When a relationship breaks down, money issues often arise.

A common query is whether a spouse can take matters into their own hands and simply empty the joint bank account.

The quick answer is yes – either account holder can withdraw the entire balance during a divorce or separation. Both have an equal right to all of the funds.

There is an important distinction to be made between being able to withdraw money and being able to keep it. That’s what this article is here to address.

We’ll discuss the legal reality of the situation before looking at likely consequences and protection measures that both ex-partners can take.

Legal reality

Here are the practical legal considerations regarding such a situation:

Equal ownership

Many people assume each partner owns half of a joint account. In fact, both account holders own 100% of the funds, not just 50%, regardless of who deposited the money. That is why one person withdrawing everything is not technically unlawful.

Bank policy

Most joint accounts are set up so that either party can withdraw or transfer money without the other’s consent. Unless the account has been set up differently, the bank will carry out the instruction when a withdrawal is made, regardless of whether it leaves the account empty.

No liability for banks

Banks are not in a position to intervene in marital disputes. If your spouse empties a joint account, the bank is unlikely to reverse the transaction or compensate you.

From the bank’s perspective, it has followed a valid instruction from an account holder.

Consequences and court treatment

How can you expect the courts to treat a scenario in which one spouse empties a joint account?

Matrimonial asset

Taking the money does not remove it from the overall divorce financial pool. The money will still be considered when finances are divided. If your spouse still holds the money, it is simply counted as an asset that happens to be in their hands.

The court will look at the whole picture, including what the money was used for. Spending on reasonable living costs, such as rent or a deposit on a new home, is usually treated differently from irresponsible spending or waste.

Reckless spending

If money is deliberately wasted, for example on gambling, lavish spending, or gifts to a new partner, the court may treat this as ‘wanton dissipation’ and penalise it. The amount can be added back into the calculations, so that the spouse who spent it effectively receives less in the final settlement.

Financial disclosure

In financial proceedings, both parties must give full and frank disclosure.

This is usually done through a detailed document, supported by twelve months of bank statements. Large or unexplained transfers are likely to be spotted and questioned, making withdrawals difficult to hide.

Protection steps

There are steps that spouses can take to protect themselves from this eventuality:

Freeze the account

If account holders are concerned about this scenario, they should contact their bank as soon as possible. Many banks will freeze a joint account, or stop withdrawals by one person alone, once they know the account holders have separated.

This protects the balance while spouses reach an agreement.

Redirect income

If you are in this situation, you may arrange to have your salary and any other regular income paid into an account in your sole name immediately. This keeps money available for your day-to-day living costs.

It also prevents your earnings from disappearing into an account your spouse can empty.

Require dual signatures

Banks can change an account’s authorisation rules so that both signatures are needed for withdrawals. Not every bank offers this, but where it is available it stops either party acting alone. Household bills paid by direct debit may need to be rearranged in the meantime.

Talk to our team

Our divorce solicitors in North Wales can advise you on protecting your finances during a separation, right from the very start. Contact Bennett Smith today on 01248 671994 for friendly, practical advice.