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The Association of Divorce Financial Planners (ADFP) is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site: www.nasbatools.com.



Joint Accounts...What Should We Do?

As a given marriage travels down the road towards dissolution, many loose ends will need to be tied up. Some of the most significant of these will be of a financial nature, specifically, the joint accounts once shared during the marriage. Savings and checking accounts, credit cards, equity credit lines, safety deposit boxes, investment and similar type holdings, and property ownership are some of the issues, to name a few, that will have to be resolved before the actual final divorce can be granted.

Obviously, all joint bank savings and checking accounts will have to at some point be liquidated and in some proportion divided. It is perhaps the best idea at time of separation not only to open a new checking or savings account in your own name only somewhere, but to try and deposit some monies into such. In this way, you will not only be guaranteed to have fiscal reserves in time of need, but that no one but yourself can access such accounts.

Unfortunately, the closing of accounts are not always necessarily clear cut issues. The operating procedures to do so may vary from state to state. Perhaps the best way to determine what is the best course for you and your spouse would be to consult an attorney, or, at least, local law library.

Joint Bank Accounts
In dealing with the joint accounts, there are a few logical options available to you and your spouse. The first would be to ask your banking institution to "freeze" the accounts in question and not allow monies in or out of these accounts without authorization by both parties. The second would be to empty all joint accounts into one, frozen account to be dealt with in the same manner as the first option. You may opt for an "Escrow" account, in which an officer of the bank is assigned to monitor and must given written authorization with respect to any such account before any transaction may be conducted. Lastly, one spouse can take out half the money in a given account and deposit it into their own, new individual account, for all intents and purposes leaving the joint account as the other's individual account. By not addressing this issue, you will give your spouse the opportunity and means to liquidate a specific account without your knowledge, leaving a startling discovery to be made in the future. While in the event of this the court will probably provide for reimbursement, the actual receipt of such could be months or years in coming, leaving you to deal with the consequences in the immediate future.

Joint Credit Cards
To close joint credit cards and the like, formally write the creditors and notify them of the impending divorce. Request that the account be closed and that the cards be canceled. Ask them to provide a current statement of account and make them aware of the fact that you do not intend to be held liable for any and all debt accumulated after the date of the written letter. It is not unwise to send these letters by certified mail to retain proof of receipt by the creditors. In some instances, the creditor will ask that the outstanding balance on an account be paid in full. If it is possible to comply with this, then do so. If not, at the very least, have them place the account on inactive status so that no new additional charges may be added and stipulate that once the balance is paid in full, the account is to be closed completely and forever. Most of the time, these simple requests will be granted immediately; if they are not, contact a supervisor or continue on up the ladder of importance explaining you are going through a divorce unfit proper satisfaction is achieved.

Equity Credit Lines
One particular aspect of joint credit that some people tend to overlook would be an equity credit line. This is an open-ended loan granted by an institution, usually a bank, with your martial property used as the security. The lender places a lien against your home which is recorded on it's title and can force the sale of your home to recoup its money should you default on your payments. If you are unclear as to whether or not there is such an account open or cannot remember from which institution one was opened, you can contact a Title Insurance company and ask that a "search" be done on your property. While this does in fact cost money (usually a little over a hundred dollars) the title company will deliver a complete list of liens against your property. If there is found to be such an open account, again, as with other credit lines, contact the institution asking them to freeze the account. With an equity line of credit left open, you are exposing yourself to the possibility of losing your home.

Security Margin Accounts
Similar to an equity line of credit would be something known as a margin account, which is available through stock brokerage houses. This works very similarly to the equity line, with your stockholdings acting as the security. Follow the same procedure used for credit cards and equity lines of credit so that your spouse cannot withdraw money, trade stocks, or draw profits without your knowledge.

Safe Deposit Box
There is perhaps no asset quite like the safe deposit box in terms of its ability to be emptied with little effort. Quite literally, whoever gets there first has the opportunity to grab the contents and run. Banks and other such institutions do not check with the courts to see who is separated and who is not. If a box is cleaned out, there is very little chance that the contents will ever be recovered. The optimum would be to obtain possession of both keys, or, if distrust prevails, to surrender both keys to an officer of the bank. At the very least, try to make and inventory of the box and take photographs of such. Then have an officer of the bank sign your inventory and in that way, if anything is later removed, you'll have proof of what was taken. In the event of extreme fear concerning a safe deposit box, obtain a restraining order from the court. The order would prevent either spouse from access to the box until such time as final settlement is reached or the order is rescinded.

Joint Investments or Other Holdings
To thoroughly protect any joint investment or other holdings, make a complete list of all such assets. Promptly contact your broker or other financial officer and inform him of the impending divorce. Request that no stocks or other type holdings should be moved, transferred without knowledge and written approval of both parties. Immediately send a statement to this effect in writing. Be sure to ask the broker or officer to make a note to the "on line" file on his or her company's computer system as an added safeguard. Given the sophisticated nature of today's markets, many of these types of transactions are conducted over the phone with the push of a button and can be concluded in a matter of minutes, so time is of the essence.

Real Estate Property
Most married couples hold property, specifically real estate property, in a manner known as joint tenancy. Joint tenancy means that when one joint owner passes away, the other owner(s) automatically inherit the deceased's portion of the property without having to travel the long and costly probate process. If you are afraid you might die during the divorce process and do not want your share to automatically revert to your spouse, you can change your title status to reflect tenancy in common. Tenancy in common, like joint tenancy, provides for equal shares, however, if you die, your share will be passed to whomever you've designated in your will or estate planning document. However, in accordance with the laws of most states, if you die and there is no will or estate planning document, your share will pass automatically to your spouse. To formally change the ownership status, you must execute a Deed clearly stating this change. Your spouse does not have to be a party to this Deed for the change to effected, however, the document must be signed in the presence of a notary and recorded in the Office of the Recorder of Deeds where the Deed to your house was originally recorded.

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