Joint checking accounts are bank accounts that you share with another person (usually your spouse) to pay for items, such as household bills or family vacations. The money held in joint checking accounts belongs to both account owners. This means that either party may contribute and/or withdraw funds from that account.

In California, a joint checking account is considered a form of community property. Under state marriage laws, community property is defined as property that is owned by both spouses. Thus, unless a bank account is specifically labeled as separate property, joint bank accounts and their contents are generally viewed as marital or community property.

As an example, suppose that a couple decides to open a joint checking account after they get married. Over the course of their twenty-year marriage, Spouse A has deposited the bulk of money sitting in that account. Spouse B occasionally contributes funds, but nowhere near as much as Spouse A. The couple continues to withdraw, spend, and share the money held in that account throughout the duration of their marriage.

Now, if the couple files for divorce in California and their joint checking account still exists, the court will divide the funds held in their account equally between the parties. This is because joint bank account laws in California classify these accounts as community property. So, even though Spouse A has deposited more money in the account than Spouse B, Spouse B will still receive half of the account balance.

Also, questions regarding whether a person is allowed to continue spending money from a joint checking account and how much a person should receive in a divorce can easily lead to legal disputes and consequences because the answers to these questions are constantly changing. Hence, why joint checking accounts can make getting a divorce in California rather difficult.

Some other joint bank account laws in California and considerations that may affect how an account is distributed during a divorce include:

  • The standard definition of community property in general (i.e., California Family Code Section 760);
  • The date of separation versus the date of the finalized divorce (under state law, money withdrawn and/or deposited before officializing the divorce may be considered community property);
  • The established presumption that property held in joint form (e.g., like a joint checking account) will initially be considered community property by a court (i.e., California Family Code Section 2581);
  • The amount that one or both spouses have withdrawn and/or deposited since the date of separation;
  • Whether certain funds held in the account were specifically intended to be an inheritance or gift of only one of the spouses; and
  • On top of tracing the source of certain funds, if there is evidence that supports an argument claiming a portion of the joint funds should actually be categorized as separate property (i.e., California Family Code Section 2640).

What If the California Court Issues a Restraining Order or Injunction on Bank Withdrawals?

In some cases, the court may issue or a spouse may request an injunction to prevent the other spouse from withdrawing money during divorce. This injunction is sometimes referred to as a “Temporary Order Not to Sell Assets”. The order can be used to not only stop withdrawals of money from a joint checking account, but also to preclude a spouse from selling off any assets, such as vehicles, the marital home, and various other shared assets.

It is important to note that if the court does grant an injunction or temporary order on bank withdrawals, then both spouses must abide by its terms until a court issues another order that removes or modifies it, or the order expires. A spouse who violates such orders can have their actions used against them in future divorce proceedings and could potentially be accused of committing fraud or theft.

Specifically, in California, laws regarding the ability to withdraw money during divorce require a two-prong assessment. On one hand, a spouse can be held liable by the other spouse for how they handled funds contained in a joint checking account (e.g., spent too much, gambled it away, etc.). On the other hand, joint checking accounts are considered community property and thus a party to that account has a right to use the money within as if it were their own account.

Accordingly, couples who are divorcing and have been issued an injunction or temporary order on bank withdrawals by a court, must comply with the terms of the court order or else they can be held legally responsible for violating it.

In contrast, couples who are divorcing and have not received an injunction or temporary order on bank withdrawals, will not necessarily be doing anything illegal. However, they should proceed with caution, do their best to spend only minimal amounts, and keep track of their transactions for proof in the event of a legal dispute.

What Happens if I Spend More Than Half the Money in a Joint Checking Account in California?

Money held in a joint account is typically not divided until a couple’s divorce is finalized. As such, even though an individual may have a property right in the money, they are not free to spend all the funds in the joint checking account since half of it most likely belongs to their spouse.

Under California divorce law, intentionally wasting or spending money during divorce can lead to serious legal consequences, such as having to repay a spouse, having to pay for a spouse’s attorney fees, and having to pay a penalty or fine.

Thus, a spouse should think twice before spending money in a joint checking account, even if it is just to pay for some routine bills. To be safe, they should consider consulting a California divorce lawyer for further advice.

What Happens If I Deposit Money Into Our Joint Account After We Are Separated?

Although the answer to this question may change depending on the facts of a dispute, money earned after separation is generally classified as separate property.

However, if the individual who earns the money deposits their separate funds into a joint checking account and does not specify the amount, the date, and other relevant information that could help to identify the transaction, then this may affect how it is classified and the money can potentially become community property.

Should I Contact a California Family Lawyer Before Spending Money from Our Joint Checking Account?

If you are in the midst of getting a divorce and are not sure whether you can spend the money held in a joint checking account or not, you should speak to a California divorce lawyer before making any more payments. A local family lawyer who has experience with California divorce law will be able to inform you about your rights, obligations, and protections when it comes to marriage dissolution and linked community property.

In addition, if you are involved in a dispute over money held in a joint checking account, your lawyer can help you settle the matter out of court or can represent you during a court hearing. This is true regardless of whether you wish to sue your spouse or if your spouse is suing you for an issue pertaining to joint checking account funds.