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Panicked cash withdrawals likely to thwart, not speed, a divorce

When a Houston resident swings through the ATM line at the bank drive-through, they often see an option for "quick cash" on the menu. While there's a time and place for such an option, complex legal situations are generally not among them.

When anticipating a divorce, one spouse or the other will sometimes panic over finances. This may be understandable, since property division and all its many nuances can certainly overwhelm a spouse initially. Still, some spouses will react by rapidly trying to withdraw funds from their bank accounts. If the account is a joint account, this could pose problems for both spouses.

During the property division process, litigants to a divorce must typically account for their assets and liabilities. This can mean providing documentation regarding the amount and value of marital property, which can include joint bank accounts. Since cash is one of the few types of money that can be literally hidden away, some spouses will attempt to tip property division in their favor by withdrawing that money from an account, pretending they don't have the cash and appearing less well-off than they are. Still, nowadays bank account activities, including cash withdrawals, are very traceable. In addition, if a spouse claims they spent the cash on important purchases, documentation may need to be provided in court to account for those expenditures.

Thanks to today's technology, it's also possible to show that funds existed in the past. Tax returns show interest accrued across various accounts, and subpoenas can reach far back into the past. The wrongful removal of cash from accounts, right before a divorce, appears suspicious for a reason and penalties may apply if - or when - someone is caught.

Source: The Star-Ledger, "Your money: With divorce coming, how can I hide cash from my spouse?" Karin Price-Mueller, June 4, 2012

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Attorney Christine K. Lincoln

Christine K. Lincoln offers sound counsel and legal services to protect clients and their families facing divorce and other family disputes.

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