When going through the divorce process, one of the main questions we get asked from clients in how to remove a spouse from a joint bank account. A few main points to consider before we jump into the steps of how to remove a spouse from an account:
Community/Marital Property - As a majority rule, a joint or separate account can be considered a marital or community asset - regardless of whether it was only in one spouse's name. This means that even if one spouse is trying to remove the other spouse's access to the money, it may be legally shared between them under their state's laws. Thus, removing a spouse from an account doesn't remove their ownership to it's contents, in most cases.
Divorce Process - People should be careful of cutting their spouse off from money, including assets like a bank account, if they are going through a divorce process. It can be frowned upon to remove your spouse's access. It is always advisable to speak with an attorney in your state before cutting off a spouse from any asset or making unilateral decisions with your finances.
1. Why might one even want to remove their spouse from their joint checking account?
There could be many reasons for removing a spouse from a joint account, including wanting to protect the funds (spouses are divorcing, one spouse suffers from a gambling or substance abuse/addiction, spouse overspends). Otherwise, it may be as simple as changing account ownership for budgeting purposes, one spouse changing banks, etc. Most of the time, it will be an attempt to protect funds though.
2. What are the steps involved to remove a spouse from the bank account and why?
In almost every instance, both people must be present to remove one spouse from the account. For a brick-and-mortar bank, such as Chase or Wells Fargo, this usually means both people must go to the bank together to make the request. For online banks, you usually both have to call the bank or sign a formal document. This is because you both have ownership in the bank account. Let's compare this to a home. You couldn't remove someone from the title without them knowing, as this can remove their ownership interest in the home.
3. How do you go about these steps to remove a spouse?
Often, in divorce mediation, we coordinate the date upon which the spouses plan to separate their finances. They go to the bank together to either remove one spouse's name from the account, or close the account and open their own individual accounts. It is important to note that if the account was originally in Spouse 1's name, then they added Spouse 2, and now want to remove a spouse, it could be that only the original owner (Spouse 1) can retain the account. The same rules would apply even if not in a divorce - typically both spouses need to contact the bank or go to the bank to remove the name.
4. What do you tell your spouse when wanting to remove them from an account?
This can be tricky - as often the spouse being removed from the account can become defensive. In mediation, we discuss the necessity of this step in the divorce process and the mediator (third party neutral) helps them have this discussion. For those trying to protect their assets from a spouse with an addiction, sometimes the addicted spouse will recognize the benefit of being cut off from funds to protect the family financially as a whole. If anyone is in a situation where they feel they need to remove their spouse due to safety concerns (addiction, domestic violence, etc.) and they are unable to talk with their spouse due to fear of violence, it is important to speak with an attorney about your options.
5. When and why should spouses consider this move?
I like to promote that spouses speak with one another before making big changes to their finances, as going behind the other person's back causes conflict and mistrust. That is not healthy for a relationship, whether the couple is remaining together or divorcing. That being said, if it is a concern of safety or lack of control of funds due to addiction, it is understandable to want to have some financial security. It is always advisable to reach out to an attorney in your state to understand your options for protecting yourself.