The internet can be used to answer questions from totally hip and awesome younger folk. For this crowd, a site like Nerdwallet can run a story about, “Personal Check: What It Is and When You Need One” as if it were uncovering an unknown tribe in the Amazon River basin. For most adults, checking accounts and personal checks are simply another mark of adulting done right. For a younger crowd, they are as alien and unfamiliar as a rusty old tool from a barn. How does separation and divorce affect the typical checking account?
Whose Name is the Account In?
Checking accounts for most Virginians are mundane parts of daily finances. You pay some bills by actually writing out personal checks and mailing them off. You set up Automated Clearing House (ACH) payments to have money electronically transferred from a checking account.
You can have your paycheck directly deposited to a checking account, too. Personal checking accounts can be established with any local bank (or credit union) as a contract between you personally and the financial institution. The Code of Virginia in § 6.2-604 calls it a contract, and distinguishes it from a joint account (“an account payable on request to one or more of two or more parties whether or not mention is made of any right of survivorship”) For a personal account, the test is simple: whose name is on the contract? That is the name on the account, and the only person recognized by the bank to receive funds from the account.
As an example, if you, alone, open a checking account with Virginia Beach Schools Credit Union (VBSFCU), you, alone, get the benefits the credit union offers, and you, alone, pay the $4.95 monthly fee for checking. The credit union holds your money, pays bills and presented checks, and (in VBSFCU’s case) gives you added services like identify theft protection and life insurance. In return, you are the exclusive user of those services.
Ah, but what if your wife’s name is also on the account? Then you have a joint checking account, and she is also entitled to all the privileges. An individual account is a contract between two parties; a joint account involves three parties.
Privileges of Checking Accounts
One of the attractions of most modern personal checking accounts is an Automated Teller Machine (ATM) debit card. You can withdraw (and, theoretically for most of us, deposit money) through thousands of ATMs around Virginia.
In most cases, banks will only issue an ATM card for the person who owns the account — who signed the contract with the bank — though student accounts sometimes allow the responsible adult to have a separate ATM card.
The ATM card is a privilege extended to you by the bank. If you read the incredibly tiny printing on the back of most ATM cards, it states the card is owned not by you, but by the bank, and must be surrendered on demand.
If you lend your spouse or partner your ATM card and give over the Personal Identification Number (PIN), you have given that person free reign to deposit (!) or withdraw your money.
That is a very bad idea, because you may have just funded your partner’s exit from a shaky relationship. She ditches you after cleaning out the account, and you have little recourse. You gave her the card and PIN.
Similarly, if your name is not on her account, you have no right to the funds in it. If she gives you her ATM card and PIN, and you take half of the money, by law you stole her money.
The bank may have erred in allowing you to take her money, but that is a civil law matter (a breach of contract) between your partner (or wife) and the bank. The bank may be liable to your wife (or partner) for her financial loss, but you stole the money. That is a crime, not a civil matter.
For married couples in Virginia, an account in only one name is separate property, not marital property, for purposes of property settlement during divorce. Even if you co-mingle your own funds into it, the most you can ask (and this is a stretch) is that the sole account in her name be considered hybrid property.
To avoid the liability of depositing money you may never see again, consider separate accounts. If she had one from before you married, you have every right to open your own, personal account during the marriage. If you anticipate a future in which you go your separate ways, have separate checking accounts. You are not alone in wanting that security!
What happens when you call 757-383-9184, or contact us online, to speak to a men’s family law attorney at The Firm For Men. You get invited to come down to our offices and meet with us to discuss your situation, all without pressure. We represent Virginia’s men in all aspects of family law, including property settlement agreements.