Is it illegal for a bank to allow a spouse to withdraw all funds if that spouse is not listed on the account?

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Is it illegal for a bank to allow a spouse to withdraw all funds if that spouse is not listed on the account?

Husband and wife are married for 20 years. Account is opened while married but only husband is listed on the account. Wife withdraws all the funds from accounts 2 days before filing for divorce (under attorney’s advice) Is their any recourse for husband? Is the bank liable for a breach of contract/policy and, if so, can a suit be filed with bank, spouse or attorney? Would the wife owe the husband for his half of the community property (assuming that this case is still under the statute of limitations)?

Asked on January 31, 2011 under Family Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) If the spouse was not listed on the account, then the bank cannot let her withdraw the money, short of some other form of authorization (e.g. a power of attorney) which would let her do so. Being married does not automatically give one power over an account--that's why spouses who want to both access an account open a joint account. The husband should speak with an attorney, since there may well be a cause of action against the bank.

2) If there is a divorce--which one would imagine there would be, in a case involving this level of breach of trust, etc.--then the money taken out by the wife would be considered in determining asset allocation or distribution.


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