How to Divorce Your Joint Checking Account

Breaking up may be hard to do, but closing a joint account doesn’t have to be. Joint account holders may decide to go their separate ways for many reasons, including divorce, relocation or simply a decision to no longer mix their finances. Here are some money-smart tips for ending a banking relationship with another person.

Open a new account first

Before moving to close your joint account, open a new account in your name only and use it for your everyday expenses, says Kimberly Foss, a certified financial planner and founder of Empyrion Wealth Management in Roseville, California. “Try to use the old joint account as minimally as possible,” she says.

Close joint accounts together, if possible

Some banks and credit unions don’t require all account holders to be present to close an account. If you’re concerned your partner will take all of the money from the joint account without your permission, consult a legal advisor. A court could force your partner to return any money you’re owed.

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But if you have at least an amicable relationship with the other account holder, you may be better off visiting the bank with that person, Foss says.

“It’s often the best strategy to close an account together, because it helps eliminate any misunderstanding about where the money in the account will be going,” she says.

If you close an account in person, expect to show photo ID and fill out a form requesting account closure. Many banks and credit unions will let you mail or fax a request. If your account is with an online bank, both you and the joint account holder may be asked to enter individual login information to complete the request.

Foss recommends splitting bank funds 50-50. You’d generally transfer your share of the money to your other bank account or ask for a cashier’s check.

Watch out for debits and deposits

When closing a joint bank account, make sure you’ve canceled any automatic payments. Otherwise you could be on the hook for extra bank fees if payments are posted after the account has been closed.

Be careful about deposits, too. If a financial institution receives a deposit for a closed account, the institution may reopen the account and start charging the monthly service fees that go with it.

Focus on your next financial chapter

For divorcing couples, closing a joint account can be a necessary step in closing one chapter of life and moving on. But divorce isn’t the only reason to close a joint account. Some couples may decide they’d be better together if their finances were separate. Other account holders may be friends or former roommates who no longer need to share an account.

Whatever the reason, start by learning how to choose a good bank for your new account. And commit to managing your money, on your own terms, for the future.