Under California law, all of your income and any monies, investments or assets you’ve accumulated or accessed while married are almost always community property. There are exceptions for specifically identified “separate” property such as properly structured inheritances, assets and funds protected by prenuptial agreements, etc. The first thing to thoroughly understand is this: Joint Accounts are community property and community property must be divided equally between the parties.
That being said, what happens to joint accounts during a divorce and how community property is divided (who gets what asset, account or portion) is one of the most substantial aspects of a divorce.
Begin by organizing a list of every financial account you have signatory access to and any joint account you share with your former spouse. Carefully document all account numbers, existing balances, scheduled or automatic transactions/withdrawals, and the date it was opened. If either party removes money from a joint account the judge can order them to put it back, repay it or offset unjust withdrawals during community property division.
If an account was in your name and opened prior to your marriage it is important to document the amount which existed in that account on the day you were married.
If you own a business be aware that your business accounts are very likely to be audited. Do not move or transfer any amounts out of your business in hopes to hide them or protect them from the divorce. The judge will take harsh action on any attempt to hide or alter monies or assets. This can cost you severely in terms of financial impact and even the ownership of the business itself.
After the “Date of Separation” (DOS) you may open your own “separate” financial accounts. This allows you to deposit your income and any money you make from that point forward (the DOS) is your “separate” property to keep. You are still required to list all information concerning these accounts on financial disclosures as part of the divorce process.
What happens to joint accounts during a divorce is a complex legal question and you need to have sound counsel and legal advice. Contact the Family Law Certified Specialists at Burke & Domercq or call 760-434-3330 to learn more and schedule an appointment.