Steps to Separate Your Shared Bank Account
Parting Ways with a Joint Account: Making the Transition Smooth
Ending a partnership—whether it’s personal or financial—can feel overwhelming, but dissolving a joint bank account can be surprisingly straightforward. Couples might choose to separate their finances for a variety of reasons including divorce, moving away, or simply wanting to keep money matters distinct. If you find yourself in this situation, here are some savvy strategies to make the switch as seamless as possible.
Settle into a New Routine
Before you make the decision to close that joint account, it’s wise to open a new one solely under your name. This way, you can handle your daily expenses without mixing finances with your former partner. Kimberly Foss, a financial planner and founder of Empyrion Wealth Management, advises minimizing the use of the shared account as much as possible during this transition phase.
The Importance of Collaboration
Although some banks allow one account holder to close a joint account without the other present, it's wise to coordinate with your account partner if possible. If your relationship is amicable, heading to the bank together can help prevent misunderstandings about fund distribution. Foss suggests that tackling this together can provide clarity on where the remaining funds will go.
An Account Closure Checklist
Be prepared to present identification and fill out a request to close the account, either in person or through mail/fax. With online banks, both parties may need to log in to their individual accounts to finalize the closure. It's crucial to handle any automatic payments before closing the account to avoid unexpected fees that could crop up after the account is no longer active.
Division of Assets
When it comes to the funds in the joint account, it’s generally a good idea to split everything 50-50. Ensure that you transfer your share to your new banking account or another safe location. Plus, be wary of any deposits made to the closed account, as this could trigger a reactivation of the account and lead to service charges.
Moving Forward from Shared Finances
For those navigating divorce, closing a joint account may signify the closing of an important chapter in life. Yet, financial separation is not solely reserved for couples parting ways; friends or former roommates may find it beneficial to manage their finances independently as well. Regardless of the reason, take proactive steps to establish your new financial habits and commit to managing your money according to your own terms moving forward.
