We field a lot of questions on this subject: is it even legal to conceal money from my spouse? Should I set aside money for a rainy-day divorce fund?
There are numerous explanations for why someone would want to keep money hidden. Even if your marriage is going well, knowing that you have this reserve gives you comfort in the event that things don’t work out. Perhaps you’re aware that a divorce is imminent and you just want to be ready to go when the time comes.
Even though my friend has been happily married for twenty years, her mother still sends her money on occasion to add to her “leaving fund.” Her mother is adamant that every woman ought to have a comparable fund in case Given that many married women today have jobs and are even the “breadwinners,” this mindset may seem a little out of date, but it still raises the question of whether it makes sense to keep a small hidden stash.
Remember, we’re not discussing stowing away cash to purchase a new pair of shoes without telling your partner. We’re not talking about keeping cash hidden so you can check into a hotel in the event of an altercation. We’re talking about having enough saved up to allow you to end the marriage, or maybe even enough to pay for legal representation.
Since every situation is unique, maintaining a hidden cash reserve may be appropriate—or even necessary—for some people, but it may cause more issues for others. Before you start stealing money, be sure to think through the repercussions.
Disclaimer: This guide is for informational purposes only and should not be considered legal advice. Please consult with a qualified legal professional for specific guidance regarding your situation.
While hiding money from a spouse is not generally advisable, there are certain situations where it may be necessary, such as protecting yourself from financial abuse or preparing for a potential divorce. This guide will explore various legal ways to hide money from a spouse, along with essential information about the potential consequences and legal ramifications.
10 Legal Ways to Hide Money From a Spouse
Here are ten legal methods you can employ to hide money from your spouse:
1. Don’t Disclose New Income to Your Spouse:
If you receive a raise, bonus, or any additional income, consider keeping it a secret from your spouse. This way, the money remains hidden and under your control.
2. Get Cash Back at Checkout:
When making purchases with a debit card, opt for the “cash back” option at checkout. This allows you to withdraw a specific amount of cash along with your purchase, providing you with hidden cash.
3. Utilize a Safe Deposit Box:
Store your cash and other valuables in a safe deposit box at your local bank. Since only your name is on the box, your spouse will not have access to its contents.
4. Repay a Loan to a Family Member:
If you borrow money from a family member, use the repayment process as a way to hide money. By “repaying” the loan, you can stash away cash without raising suspicion.
5. Purchase New Possessions:
Investing in new possessions, such as jewelry or electronics, can effectively hide your money. These items can be later sold or returned for cash if needed.
6. File Taxes Separately and Overpay:
When filing taxes separately, you can increase your tax withholdings, resulting in a larger refund later. This effectively hides money from your spouse until tax season.
7. Utilize Prepaid Cards and Gift Cards:
Load prepaid cards and gift cards with money to keep it hidden and accessible. Ensure they don’t expire and keep them secure to avoid loss.
8. Don’t Disclose Cash Income:
Avoid disclosing any cash income earned outside of your regular job. This income can be stashed away in a safe place or deposited into a separate bank account.
9. Obtain a Personal Credit Card:
Apply for a credit card in your name only, keeping your spouse’s name off the account. This provides you with a separate source of funds that your spouse cannot access.
10. Delay Promotions and Bonuses:
If you are expecting a promotion or bonus at work, consider requesting its delay. This prevents the income from being included in divorce proceedings, allowing you to keep it for yourself.
Divorce and Asset Division
In most divorce cases, marital assets are divided equally between the spouses. However, specific laws vary by state, falling into two primary categories:
- Community Property: Marital assets are divided 50/50. Assets acquired during the marriage and not commingled (used for both parties) may remain separate.
- Equitable Distribution: Assets are divided fairly according to the court’s analysis, resulting in a potentially uneven split.
Hidden Assets and Legal Ramifications
Hiding assets during a divorce is illegal and can lead to serious consequences. If a spouse discovers hidden assets or suspects suspicious activity, they can initiate a “discovery process” to uncover the truth. This process allows each party to obtain information about the other’s financial status and assets.
Penalties for Hiding Assets
If the courts discover hidden assets or false statements made under oath, you could face severe legal penalties, including financial repercussions and potential criminal charges.
Protecting Assets During Divorce
Instead of hiding assets, consider exploring legal options for protecting them during a divorce. Here are some tips:
- Inventory Your Assets: Gather detailed financial statements and categorize assets belonging to each spouse and those shared.
- Monitor Your Credit: Regularly check your credit reports for any suspicious activity or unauthorized credit lines.
- Transfer Funds to Separate Accounts: Before separating, divide joint accounts into individual accounts, ensuring fairness and preventing access restrictions.
While hiding money from a spouse can be tempting in certain situations, it’s crucial to understand the legal implications and potential consequences. This guide provides valuable information and strategies for protecting your assets, but always remember to consult with a qualified legal professional for specific advice regarding your unique circumstances.
Keep a Paper Trail
Legally speaking, being married doesn’t mean that having a secret fund is improper. Until divorce proceedings are initiated, the law does not mandate that married couples maintain joint accounts or that one spouse disclose all financial information to the other.
Having said that, you should make sure you record the source of the funds in your hidden stash.
If you or your spouse earned the money in your rainy day divorce account during your marriage, it will be deemed marital property and its value will be factored into your property division.
If my friend were to receive money from her mother to add to her hidden stash, she would want to be able to prove that the money originated with her mother. This might be regarded as a gift to her, making it separate property that is not shareable.
Just to be safe, make sure you keep a record of the source of the money supporting your rainy-day divorce fund.
The Problem of “Spousal Starving”
A person without a source of income would be a good candidate to think about opening a secret account.
Take my friend’s mother, for example. At the age of twenty-five, her mother tied the knot and became a mother to three children. She became a stay-at-home wife after her children left to attend college after years of being a stay-at-home mother. She never had a job or any other source of income save her husband’s salary.
She wouldn’t have the money to support herself if something happened and she had to leave the marriage or her husband abandoned her. Even though times have changed, many women (and some men) still choose to stay at home with their children and only have access to their spouse’s income as their source of income.
Perhaps you’re thinking, “Well, I can take money out of our joint checking account whenever I want to, right? Why do I need to hide money in secret when I could just take it if I needed it to leave?”
The issue is that your partner could quickly and easily deny you access at any time. Your spouse might just close the bank account and deny you access to money if they think you’re trying to leave. In that scenario, you would undoubtedly feel relieved if you had some cash stashed away to help you get by.
This practice of emptying your spouse’s bank account and leaving them with nothing is sometimes called “spousal starving,” and it occurs more frequently than you might imagine. You might even be thinking as you read this, “My spouse would never do that to me,” but when people sense that a marriage is failing, emotions usually take precedence over logic. When it comes to divorce, don’t just assume your spouse will be cool under pressure.
If you are unemployed, you most likely meet the requirements to be considered a dependent spouse and are therefore eligible for alimony and post-divorce support. Thus, why is this secret fund required if your spouse will be your primary provider of support?
It takes time to get support, no matter how you handle your divorce.
Even if alimony is covered in a separation agreement, it will still take your lawyer and your spouse’s attorney at least one month, if not more, to draft the document and come to a mutually agreeable arrangement.
It may also take months to litigate an alimony claim. If your case isn’t resolved when you appear in court, even though your hearing is scheduled for two or three months from now, the calendar is full. Or your partner knows you are desperate to begin receiving support, so they purposefully move for a continuance.
For this reason, even though you might be eligible for support, what will you do during the months when you are unemployed and without access to money? This is another reason why setting up a rainy day divorce fund might not be a bad idea.
Remember that every situation is unique after reading about the reasons why starting to save money might be in your best interest. Should your partner discover your plan, there may be severe repercussions.
If your spouse discovers that you have a “just in case” fund, they will definitely be unhappy. Even if your marriage is happy and you have saved the money for mental peace, your spouse might still perceive this as a sign that you are unhappy, which could lead to problems with trust.
Unfortunately, learning of such a secret can also result in domestic violence, depending on your spouse’s disposition and character.
Even in the unlikely event that your spouse is unaware of this hidden fund while you are married, it will come to light once the divorce process gets underway. All of the debts and assets you accumulated during your marriage are divided when you get divorced. Complete disclosure and the exchange of comprehensive financial data are required from both parties; everything from retirement accounts to frequent flyer miles are up for division. Having said that, you will need to reveal your hidden divorce fund.
Once divorce proceedings have started, learning about your secret account may also cause your spouse to experience specific emotional reactions. Their entire attitude regarding the dissolution of the marriage may change, and they may become less open to negotiating or reaching an agreement.
If you decide to have a rainy day divorce fund, make sure you have a backup plan for the secret account or are ready to face the consequences.
How to Hide Money and Protect Assets from (Ex) Spouse and Creditors
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