It may start with little things that make you suspicious of your spouse’s financial activities. New purchases, accounts low on funds, defensiveness about money or other unusual behavior. Whether your spouse controls the family finances or just spends without consulting you, you may struggle to pinpoint financial problems. If your questions aren’t answered or you feel uncomfortable, you need to take additional steps to learn how your spouse is spending money.
What to Do During Marriage
You and your spouse should discuss finances regularly. Importantly, you should share responsibility for handling day-to-day financial matters and long-term investing. Even if one of you takes the lead, both of you should review financial documents and accounts and make decisions about spending, saving and investing. Having this knowledge protects you while married, as well as if you get divorced or your spouse dies.
If your spouse is evasive or you have concerns that your spouse is withholding information, you should carefully review monthly statements from financial institutions and credit card companies. You can also monitor daily transactions online. If needed, contact a financial professional to help you understand your financial situation.
If you’ve discovered your spouse is hiding information from you, you may want to consult a matrimonial attorney about protecting your rights.
Identifying Problems During Divorce
Once a divorce action is filed, the “automatic orders rule” goes into effect, requiring both of you to maintain marital property and prohibiting you from dissipating marital assets during divorce. As a result, neither of you can squander assets, protecting your finances while your case is pending.
Past financial activity can be determined during the divorce process. Once a divorce action is filed, the parties must disclose financial information, including their assets, income and debts, so that their marital property can be fairly divided and spousal and child support can be calculated. Both sides must provide documentation on bank, retirement and investment accounts; loans; credit card balances; insurance policies; wills; trusts; deeds/title certificates; tax returns; business records and other relevant documents. If a party refuses to hand over this information, the other side can either get a court order to compel the party to deliver the documents or subpoena third parties like banks, accountants, financial advisors and employers to obtain those records. Note that financial institutions keep financial records for at least 7 years, sometimes more.
If you suspect your spouse is hiding financial information, let your attorney know. Your attorney will also be looking for anything suspicious in the documents provided by your spouse. Importantly, while financial statements are helpful in identifying red flags, the best evidence lies in the actual backup documentation. This includes cancelled checks, wire transfer receipts, sales and purchase receipts and similar records. These show what goods and services were bought or sold, who was paid and where the money went.
The documents may not provide all the answers, but they can help your attorney tailor questions to ask your spouse during a deposition.
In some cases, a forensic accountant may be needed to conduct an investigation. These experts can trace income and expenses to uncover fraud, hidden assets or other questionable activity.
If you’re considering divorce or want to discuss protecting your finances while married, contact us to discuss how we can help you achieve the best result in your matter.