Divorce, Death, Separation: What Happens to the Joint Bank Account?
Over time, events—whether planned or unforeseen—can change the purpose of a joint account. What are these events, and how do they affect the future of the joint account? Under what circumstances can the original joint account be converted into a joint-ownership account?
Transition from a Joint Account to a Joint Tenancy Account
A joint account can become a joint tenancy account, which requires the consent of all account holders in certain cases. For example, if one of the joint account holders terminates the joint account while the other does not wish to close it, the account automatically becomes an undivided account. This means that each account holder must approve future transactions and will be liable for any accumulated debts until the account is permanently closed. This type of account temporarily safeguards the couple’s funds by preventing unwanted outgoing transactions that might be made by one of them.
Furthermore, if all joint account holders request to switch to an undivided account—for example, when selling real estate—this requires perfect balance and solidarity among them. They must consult with one another before carrying out any transactions related to the family’s assets. Going a step further than a joint account, the undivided account allows for transparent management of the recovered funds, requiring the prior consent of each account holder.
To maintain a certain degree of freedom in managing one’s personal finances, it is essential to maintain an individual account in addition to a joint or undivided account. In fact, according to a report published in November 2023, 26% of women reported in 2022 that they had experienced economic abuse, which took the form of control over their finances or the improper diversion of their income.
Minimum Time Required to Close a Joint Account
It is possible to terminate the use of a joint account at any time. To do so, the joint account holders must sign a form at their bank to formalize their decision. It is important to note that just because the balance of the joint account is zero does not mean it is permanently closed. Only an official request to close the joint account submitted to the bank will formalize the account holders’ decision. Furthermore, by leaving an unused joint account dormant, the account holders may incur inactivity fees.
What to Do About a Joint Account in the Event of Divorce or Separation?
As soon as a permanent breakup becomes apparent within the couple, it is prudent to stop making deposits into the joint account as frequently as before.
Don’t delay in asking the bank to close the account, while leaving a minimal amount to cover any final known joint expenses and bills. This will prevent potential payment issues, which are costly by definition. Once the final payments have been made, ask the bank to separate the joint account—that is, to distribute the remaining balance in the joint account according to the specific allocation initially agreed upon by the joint account holders or, failing that, equally among them.
In the event of a dispute between the two joint account holders, the first account holder must send a request for account closure by certified mail with return receipt requested (LRAR) to their bank, as well as to the second account holder, to ensure that no dispute can arise. Upon receipt, the individual payment methods associated with the joint account (checkbook and debit card) will be deactivated.
What Happens to a Joint Account If One Partner Dies?
The joint account remains open if one of the joint account holders dies. If there is only one surviving joint account holder, the joint account will automatically become an individual account. However, in the context of an estate with heirs, the notary or the tax authorities may request that the joint account be frozen in order to secure the funds and organize their future distribution to the beneficiaries.
Cost of Closing a Joint Account
The average cost of closing a joint account is 40 euros, and can be as high as 105 euros at some financial institutions.
A joint account is not set in stone and can be adjusted according to the couple’s wishes or their circumstances. In the event of a permanent separation or death, it is important to follow the steps recommended by the bank to clarify the accounts and protect each party’s assets.
