In a marriage, a couple’s finances are closely intertwined. Many spouses maintain joint accounts to cover their daily living costs. However, these comingled funds can raise complicated issues during a divorce and often become a source of contention.
A joint bank account is subject to division between divorcing spouses. If the account contains marital funds, even if these are combined with separate funds, it may be distributed between spouses. If a spouse empties a marital property account after the divorce is filed, they could be breaching an order or committing fraud.
Unfortunately, when a divorce is filed, one spouse or the other will withdraw all or most of the funds on deposit in the couple’s joint checking account. The funds are then used to hire an attorney for the divorce or to pay the deposits necessary to move into a new house or apartment. To help prevent the draining of the joint account, a savvy family lawyer will seek a Temporary Restraining Order (TRO) contemporaneously when filing the divorce.
The divorce Fort Worth divorce lawyers at Youngblood Law, PLLC. are skilled high-asset divorce attorneys with experience identifying and proving financial misconduct in divorces. Divorce is hard on anybody, but managing a spouse hiding or wasting marital assets can be exceptionally challenging.
When represented by Youngblood Law, PLLC., you can be confident that your family law attorney has the knowledge, skill, experience, and tenacity to ensure that you receive fair treatment, equitable distribution of assets, and that you do not fall foul of your spouse’s underhand tactics.
If you suspect misconduct, time is of the essence to act quickly and protect your property.
Contact Youngblood Law, PLLC., today by calling 817-369-3970 to book a consultation and discuss your high-asset divorce.
Marital Property In Texas Divorce
Under Texas Law, property division during a divorce is governed by community property laws. Texas is a community property state. As such, any property acquired by either spouse within the duration of their marriage is likely to be considered community property. Community property should be divided fairly and equitably between spouses during divorce. A divorcing couple can propose an arrangement to the court if they agree, or a Judge may decide upon property division if an agreement can’t be reached.
Typically, any property and assets owned by either spouse before the start of the marriage are considered separate property. However, rarely is a situation this straightforward within high-asset divorce proceedings. If payment for the marital home has been supported by profits from separate property, such as a business, or if separate and marital funds have been combined, the difference between the two becomes complicated.
A couple’s joint bank account, separate accounts, real estate, cars, pensions, stocks, businesses, and investments could all be considered marital property and subject to an equitable division in the divorce settlement.
Will The Joint Account Be Split?
The funds in your joint bank accounts may be divided between spouses in a divorce if they are considered marital property. Simply having both spouses’ names on the account does not guarantee that the funds are subject to community property laws. The nature of the funds, how the account and funds were maintained, and how and when they were acquired will determine this.
If the funds in the account were acquired or earned during the marriage, likely, this will be community property. If both spouses’ separate and community funds have comingled in the account, it will be challenging to separate the finances, and likely the funds would be deemed community property. With the help of a skilled forensic accountant, it may be possible to discern separate and community finances in a joint account and exclude separate property from possible division.
Texas law places the burden of tracing separate property assets and funds squarely on the party claiming the separate property. If there are separate property funds in a joint checking account, detailed accounting is necessary to prove the ownership of those funds.
Can My Spouse Drain Our Joint Bank Account During Divorce?
If the funds in your joint bank account are considered separate property and owned exclusively by your spouse, they may legally be able to drain the account. Similarly, even if the account is community property, a spouse may be able to withdraw money for reasonable living expenses, legal fees, and children’s expenses.
However, if one spouse empties the marital property joint bank account without sound justification, they could face repercussions. A Judge may view intentionally and knowingly hiding or destroying marital assets as fraud and impose penalties upon the spouse. This is especially true if a TRO is in place that prohibits or limits withdrawals by the parties.
Similarly, in some counties in Texas, a Standing Order is automatically attached to every divorce petition. This order prevents either party from draining marital bank accounts or intentionally reducing the value of marital property.
Constructive Fraud In Texas Divorce
Before filing divorce, spouses in Texas have a fiduciary duty to each other. A spouse may have committed constructive fraud if they dispose of, sell, or waste community assets without the other spouse’s knowledge or by breaching their fiduciary duty to their spouse.
If your family law attorney can prove that your spouse committed divorce fraud, this is likely to impact the final settlement you receive. When one spouse fraudulently disposes of assets, the other spouse may receive more than 50% of the marital estate in the final settlement as compensation for the fraudulent activity.
Alternatively, if the court finds that fraud was committed and a spouse wasted assets, the court may order that spouse to reimburse the innocent spouse. The reimbursem*nt can only come from the fraud-committing spouse’s side of the divorce division. Consequently, the reimbursem*nt resembles a disproportionate division of the estate even though it is technically just an equalization.
Fraud In High-Asset Divorces
Typically, the likelihood of fraud and moving marital assets increases for couples with high net worth. Often, spouses have more places to store and hide marital funds, making locating lost marital property and proving fraud more challenging.
Divorces in which one spouse owns a business that the other spouse is not involved in often present opportunities to hide assets. Similarly, when a couple has a large net worth tied up in various assets, such as numerous bank accounts, investments, and real estate, it is often easier for one spouse to misappropriate marital assets without drawing attention. The financial situation in high-asset divorces is often far more complex. It requires a divorce attorney with an in-depth understanding and the support of financial professionals to decipher adequately.
How To Protect Your Joint Assets In A Divorce
Initially, taking an inventory of your assets and financial accounts is essential. This can be a substantial task for high-net-worth individuals, but this is crucial for monitoring your finances and the early identification of inappropriate withdrawal funds. Consider enlisting the help of your accountant or bookkeeper to identify and locate your accounts and financial assets.
Ideally, during your divorce, you would reach an agreement with your spouse whereby you both receive your equitable share of the joint account funds, and the account is closed as soon as possible. Maintaining a joint account can be problematic even when you have both taken your respective funds. Any account with both spouses’ names on presents an opportunity for your spouse to generate debt and bad credit in your name.
Agreeing on the split of joint accounts can be challenging. Your Fort Worth divorce attorney can help you safeguard the account until an agreement is reached. A standard tool for small or one-off issues in a civil case is a formal agreement between the lawyers and parties in a divorce called a Rule 11 agreement. Under Texas Rule of Civil Procedure 11, the parties can enter into formal agreements without the requirement to go to court. A proper Rule 11 agreement can prevent either spouse from unfairly emptying the account.
If you suspect your spouse is already taking money from the account or they have already withdrawn all the funds from your joint accounts, seek legal advice as soon as possible. The sooner you hire a divorce lawyer, the sooner they can collect evidence to prove your spouse’s misconduct and freeze your accounts to prevent further withdrawals.
How Can a Fort Worth Divorce Lawyer Help?
A skilled divorce attorney is crucial in high-asset divorces. Your lawyer can negotiate agreements and utilize tools such as trustees, account freezes, and financial restraining orders to protect your assets. They can also work closely with forensic accountants and financial professionals to correctly divide your separate and marital funds and prove any misconduct on your spouse’s part.
An attorney’s ability to negotiate with your ex is arguably their most valuable strength. If you can reach an agreement with your spouse outside of court, this can save you valuable time and money. Similarly, a court judgment is not always ideal for high-net-worth individuals. Often this will involve liquidating and selling assets to be divided between spouses. Outside of court, your Fort Worth divorce lawyer can negotiate a more agreeable and less costly solution to property distribution.
However, if your spouse’s misconduct has negatively impacted marital property, court action may be the best option to ensure your final settlement counteracts your spouse’s wrongdoing. If your spouse has already fraudulently drained a marital account, your attorney can gather evidence to prove this to the court and ensure it is reflected in the judge’s final settlement decision.
Financial Restraining Orders
Your attorney can petition the court to issue a TRO to protect marital assets and allow for equitable distribution in the divorce. The court will convert this TRO into a temporary injunction that can last for the duration of the divorce proceedings. Once served with this order, both parties are prevented from making significant financial changes without approval from the court and the other spouse.
These restrictions apply to many financial decisions, including making large or out-of-the-ordinary purchases without providing notice or transferring or disposing of property in a manner that is outside the practices of business as usual. Both spouses are also prevented from canceling or amending insurance policies, particularly changing beneficiaries or removing a soon-to-be ex or children from the policy.
The initial restraining order will likely be in effect for 14 days. After this, a hearing will be scheduled, at which time the judge will determine whether to extend the order until the divorce is final as an injunction. It is essential to be represented by a skilled divorce lawyer at this hearing to prove the potential risks of unfreezing the accounts and increasing the likelihood of a continued order. Once an order is successfully continued, you can relax, knowing that your spouse cannot destroy marital assets with impunity.
Pro Tip:
In counties that do not have Standing Orders, a Temporary Restraining Order must be requested by a party. The TRO is typically requested in or contemporaneously with the divorce petition. The judge signs the TRO, which will be served upon the Respondent in the divorce. Once the Respondent has legal notice of the TRO, they are accountable for following the order. Note: The Petitioner is NOT bound by the TRO. Only the Respondent is. So the Petitioner still has access to the accounts until the TRO hearing.
Fort Worth Divorce Attorney: Helping High-Net-Worth Individuals In Texas Protect Their Assets
At Youngblood Law, PLLC., we have represented clients in high-asset divorces in Texas for many years. Our attorneys are familiar with most of the methods a spouse will employ to ensure their ex doesn’t receive the marital property they are entitled to. Our extensive experience means that we are well-versed in deciphering these complex financial situations, and we employ expert financial advice to ensure we have the best possible evidence to support our clients.
Although a spouse making withdrawals from the joint account or suspicions that they are hiding assets may seem like cause to take your case straight to a divorce trial, this can also be valuable leverage in negotiations. Once we gather sufficient evidence, our skilled Fort Worth divorce attorneys can use this to negotiate a settlement that compensates for this wrongdoing. This negotiation can avoid a trial and the risk of a court-decided property division that may not be the best option for your assets.
If Youngblood Law, PLLC., represents you, we will use our extensive experience with similar divorce scenarios to ensure that your assets are safe, any underhand tactics are exposed, and you receive the fair settlement you deserve.
If you have concerns over the safety of your property, you must act quickly. The sooner you seek legal advice, the sooner we can seek court injunctions to protect your bank accounts and financial resources. Unfortunately, bad blood and animosity are commonplace between spouses in a high-asset divorce. Both parties have much to lose, so you must protect yourself with experienced legal counsel.
Contact Youngblood Law, PLLC, if you are worried about your joint account or any other marital property.
Call our team at 817-369-3970 to book your initial consultation today.
