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Bank Account Division in Portland Divorce Mediation

What to Know About Bank Accounts in an Oregon Divorce: The Short Version

Any deposit account at a federally-insured institution is considered a bank account for purposes of mediation with Matthew. Checking accounts, savings accounts, and Certificates of Deposit (CDs) are treated similarly in an Oregon divorce.

Dividing bank accounts in an Oregon divorce is fairly straightforward. Portland and Beaverton divorce mediator Matthew House will help you divide your accounts holistically, focusing on practical details to promote short-term and long-term stability. Matthew is typically concerned about:

Confirming accurate balances and ensuring that no accounts are left out
Both parties having adequate liquid assets, if possible
Looking for hidden bank fees or future tax obligations
Accounting for upcoming shared expenses before dividing available cash
Using cash to pay off marital debt, if it is feasible and makes sense

Which bank accounts need to be discussed?

All joint or individual bank accounts and Certificates of Deposit must be addressed in Oregon divorce mediation, even if you already agree on who will own the account(s) post-divorce, and even if they have already been divided before mediation.
If you have other investments managed by a particular bank at which you also have checking accounts, savings accounts, or certificates of deposit, the other investments will be handled differently in your divorce. You should consult the Brokerage Accounts and Stocks for more information about such investments.

How are bank accounts usually handled in divorce mediation?

The most common ways that Matthew's mediation clients choose to divide handle a bank account are, generally in order of the frequency, are:

Liquidating the accounts and splitting the balances equally
One party retains the account and compensates the other party
Maintaining a joint account (rarely done, and usually limited to cases involving shared expenses for minor children)

Discovery for Bank Accounts: Information Needed for Divorce Mediation

For each account, Matthew will need to confirm:

The name of the institution
The type of account
The account holder(s)
The current balance of the account
Any interest earned in the current tax year
Any taxes withheld for interest earned in the current tax year

Typically, the most recent monthly statement is sufficient. If there is any dispute about recent transactions, or if either party believes that the current balance is inaccurate, Matthew may request additional information.

Valuation of a Bank Account for Divorce Purposes

The raw value of a bank account is typically established by the most recent statement balance.
Obtaining a bank account balance is simple. However, if you suspect fraud or if you need to have past statements studied to track what money was deposited and wtihdrawn at different points, more information may be required.
With almost every type of asset, there is a difference between the raw value of the account and what is known as the Net Distributable Value, or NDV. For a checking account, savings account, or certificate of deposit, the NDV is usually very close to the statement balance.

Does income from a bank account affect its value in a divorce?

If an asset produces income, it is considered in the equitable distribution of the asset, but not specifically in the valuation itself.
The income from a checking account or savings account is usually minimal.
However, depending on the amount, it may be significant to the equitable distribution.

Potential Separate Property

There are two ways for a bank account (or any other asset) to be delineated as one spouse's separate property and not included in the division of marital assets:

The parties can agree to those terms in mediation, even if the asset cannot be traced to its pre-marital or separate ownership.
If the asset meets the legal requirements to be defined as one party's separate property, it can be designated as such, even if the other party objects.

Changes in Survivorship or Beneficiary Designations for Bank Accounts After Divorce

A divorce does not automatically extinguish the pay-on-death designation of a bank account. Matthew will be sure to include in your Marital Settlement Agreement a stipulation that whoever owns the account post-divorce will have the right to make changes to the pay-on-death designation, unless the two of you tell Matthew to do otherwise. Even if you have such a provision in your MSA, you will still need to communicate with your bank before or after the divorce to make the change.

Matthew will also:

Consider equitable distribution, even if not equal
Help you choose the simplest or most thorough approach, whichever you prefer
Ensure cooperation between the parties
Ensure proper valuation, which may not be based only on the statement balance
Explain the difference, even if small, between the statement balance and the Net Distributable Value (NDV)
Account for taxation, even though it is usually a lesser concern for bank accounts than for other assets
Prioritize transparency so that nothing is missed or concealed
Sort out the proper delineation of ownership if some of the funds were accumulated before marriage

Although the division of cash accounts is relatively straightforward, there are subtle details that may affect the fairness of the division and/or have unexpected financial consequences. Matthew will use his training as a Family Law Financial Analyst to navigate those details for you.

Next Steps

Schedule a 90-minute in-person or Zoom introduction (first hour is always FREE)
or a 30-minute free "meet-and-greet" as soon as you're ready to begin mediation.

90-minute intro | free first hour

free 30-minute meet-and-greet