How to close a joint bank account

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As Americans have sheltered in place throughout the coronavirus pandemic, some of them have been forced to come to grips with a tough reality: They don’t like the companion who shares that shelter. 

Online document provider Legal Templates says it has seen a 34 percent spike in sales for the company’s divorce agreement compared with the same timeframe in 2019, for example. If your relationship is on the outs, you’ll need to figure out how to close your joint bank account. Here’s everything you need to know.

Open a new account before closing the old one

Remember the adage that “whenever one door closes, another one opens”? To get through the breakup as a couple or as close friends or relatives, make a small adjustment to that saying for your money: Before one bank account closes, another one should already be open. 

If you don’t have a separate checking or savings account in your name, compare high-yield savings accounts and checking accounts where you will be able to transfer your portion of the money. 

Divide the assets

You’re going to need to figure out what money is rightfully yours if you share the account with your spouse and you’re filing for divorce. While you may hope the separation will be smooth, ending a relationship often requires legal assistance to help determine who gets what. John Kay, an Illinois-based family law attorney at Hurst, Robin and Kay, says that “funds held in any form of joint account are presumptively ‘marital property’ subject to equitable distribution.”

“As a couple approaches or considers proceeding with a divorce, it is advisable to not alter the status quo, such as by closing joint accounts that have historically been utilized as the source for the payment of fixed living expenses,” Kay says. “My advice to prospective clients is that they should not close or divide any accounts until such time as both spouses are able to determine the value of the marital estate, [which includes] all marital assets as well as liabilities. Once a couple decides that they are going to proceed with a divorce, all assets should be divided by agreement and through counsel, rather than unilaterally.”

When a couple can’t agree on how to divide their assets, the first step a court usually takes is to classify the assets as either separate or marital.

Income that is earned during the marriage is typically considered marital property and is subject to division in the divorce. If the money was earned before the marriage or was acquired as a gift or inheritance to one spouse, it’s generally considered separate property and remains with the spouse that received it.

Whatever you do, don’t do the division on your own. 

“If one spouse liquidates funds from an account absent an agreement with the other spouse, that spouse will likely owe a credit to the marital estate for at least 50 percent of the balance that they removed,” Kay says.

Cancel automated transactions

Closing a joint bank account isn’t simply about the money that’s already in it. You’ll also need to think about the money that is regularly withdrawn. Do you have any recurring direct deposits that are set up for the account? Have you and your spouse arranged for auto bill pay for your utilities or other expenses? 

Be sure to review the account’s monthly activity. A separation or a divorce is already stressful enough. Don’t let the potential for unpaid bills add to your worries. 

Close the account in person or online

Getting your account balance to zero does not mean it’s closed. Instead, your bank or credit union can still charge you monthly service fees while it sits unused. You will have to specifically submit a request to close it.

First, call the customer service number to ask if you can close the account over the phone. If you still need to pay a visit to the branch, you may not need to do it together. For example, TD Bank requires both account holders to be present when opening a joint account. When closing, though, the bank only requires one party to be there. Just be sure to bring some form of identification, such as a photo ID.

If you and your partner have a joint account at an online bank, there is no need for any in-person efforts, but you may need to coordinate logging in separately to officially close it.

Bottom line

Your bank accounts are only part of the settlement process when you’re dealing with a divorce or separation. You’ll also need to think about who is responsible for your shared debt, too. Tying up all your loose ends will not be fun, but use the challenging time as an opportunity to reflect on your spending and renew your commitment to making smart financial decisions.

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