Navigating Joint Bank Accounts During Separation: Rights and Responsibilities
When a joint bank account is established under a "together and separate" arrangement, either partner can unilaterally authorize transactions. This is the common setup for married couples. However, either partner also holds the power to instruct the bank to revoke the other's sole authority, requiring both signatures for any future transactions. This unilateral instruction should ideally be in writing to clearly establish the effective date for all parties and the bank.
The immediate consequence of such an instruction can be the freezing of all account activity, including standing orders, incoming salaries, and mortgage payments. A temporary arrangement, where both partners agree to honor existing commitments and limit unilateral withdrawals above a certain sum, can maintain household operations while legal discussions proceed. For those concerned about assets being moved, a court order for the preservation of the status quo can be sought, even during proceedings to delay legal actions.
Responsibility for debts remains joint even after a relationship ends. Account holders are liable for all obligations incurred, and banks typically refuse to remove a partner from an account with a negative balance until the debt is fully settled. An individual attempting to leave a joint account with an outstanding debt will find the bank holds both partners liable, regardless of who withdrew the funds or for what purpose. Closing the account, rather than abandoning it, is the definitive step to conclude the banking relationship, which is only possible when the balance is zero and outstanding obligations have been transferred elsewhere.
The article also details the process following a separation, recommending the printing of three months of bank statements before any changes are made. Key steps include opening a personal account, redirecting salary deposits, mapping credit limits and associated cards, and reviewing direct debit authorizations, which can continue to function long after a partner has left. Mortgage obligations are particularly sticky, remaining in both names until the bank approves a change, and missed payments from a frozen account can quickly lead to joint defaults.
Legal fees for property disputes between spouses are 601 shekels, with claims for a fixed sum incurring a percentage of the amount, a minimum of 361 shekels. The article notes these fees are minor compared to overall legal costs. It also clarifies that debts accrued for the family unit, such as household expenses or renovation loans, are divided according to the law on marital property relations. Personal debts incurred independently remain with the individual who created them. This distinction is crucial for the division of assets calculation and should be clearly marked in real-time. Inheritances or gifts received during marriage are generally excluded from asset division, but transferring them to a joint account can signify an intent to share, bringing them back into the divisible pool. National Insurance Institute benefits, however, are always excluded, even if deposited into a joint account.
