0

Should You Keep a Secret “Divorce Fund?”

by Norris Law Group on July 21, 2014

Should You Keep a Secret “Divorce Fund?”Jeff Landers, a divorce financial planner and a contributor to Forbes Magazine, suggests four ways one can be properly prepared for a divorce, including 1. having your financial paperwork in order; 2. assessing your personal credit and opening individual bank accounts; 3. having private bank accounts with sufficient funds in them; and 4. getting your divorce team in place, including an experienced divorce attorney.

In another Forbes article, Landers passes on some recommendations from Debra DiMaggio, a Chicago divorce attorney. DiMaggio says that married people—particularly women—may benefit from keeping a “secret fund” during the course of their marriage in the event of a divorce. She also says that keeping such a fund may come with “pros and cons.”

“Pros” of Keeping a Secret Divorce Fund

  • “It’s secret.” Having money of your own can be very empowering. If one did not want keep the fund secret, however, one could designated it as a “separate asset” not to be included in marital assets in case of divorce.
  • “Your [spouse] doesn’t have access to the money.” This may be critical if you believe that divorce may be a distinct possibility.
  • “Your [spouse] can’t control how the funds are used.” The funds are safe from any activity with which you might not agree (bad investments, purchases you might deem frivolous, etc.).

“Cons” of Keeping a Secret Divorce Fund

  • “It’s secret.” You may run the risk of eroding trust between you and your spouse if you keep the fund a secret. While keeping a separate personal fund may be a wise financial decision, you might want to tell your spouse about it—perhaps even prior to your marriage.
  • “You could be accused of hiding assets.” From a legal perspective, keeping a separate personal fund and hiding assets so that they cannot be divided along with other marital property are not the same thing. But if you want to keep a secret fund, it might be a good idea to discuss it with an experienced divorce attorney if you have any questions about how to set up the fund.
  • “You may be charged with dissipation of marital assets.” According to DiMaggio, if you set up a secret fund using marital assets (money you and your spouse share) and use the fund to buy yourself luxury items, expensive trips, or even an extramarital affair, your spouse could use that against you in a divorce.

DiMaggio offers a final piece of advice: “No litigant should risk marring [his or] her credibility over a single issue, and if a marriage shows signs of trouble, [he or she] should embark upon an exit strategy that is safe, ethical and transparent.”

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County and throughout Utah in the area of family law, including prenuptial agreements. Contact them today at 801-932-1238 or online for a free consultation.

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: