A recent survey by wealth and retirement solutions, Aviva, revealed that over a third (38%) of people in a relationship in the UK admit to having a secret bank account, or ‘money stashed away’ that their partner has no clue about.
Whether this is done willingly, out of shame, or as a conscious decision to keep assets and spending habits secret, hiding money, or ‘financial infidelity’ can be the cause of bigger issues during divorce proceedings.
What is financial infidelity?
Financial infidelity refers to the act of hiding financial activities or information from your partner in order to stop them from finding out the true nature of your spending habits or assets. It can take a number of forms including:
- hiding significant debts: credit cards, gambling etc.
- one partner making significant purchases without the other’s knowledge.
- opening secret bank accounts or credit cards.
- undervaluing businesses or assets in order to falsely inform financial settlements during divorce proceedings.
While financial infidelity can be the cause of relationship strain, leading to divorce, it can also have an affect on the divorce process itself, particularly when it comes to the division of assets and financial settlements.
Financial infidelity and divorce proceedings
It is not uncommon for married couples to have joint finances for regular payments, such as mortgages, bills or household costs, as well as agreeing to have separate bank accounts for assets or purchases in their own names, such as cars or for recreational spending. But if one partner has been hiding assets (such as property or finances) or debts, it can affect the overall amount of money each partner is entitled to receive in the divorce settlement.
While some individuals may think it is wise to hide, or undervalue, assets in order to keep it separate from the other party, it is unlikely that this will be missed by the court during the divorce.
For example, should one party deliberately undervalue assets, such as businesses or property, the court may view this as a breach of the financial disclosure and order a re-valuation. As a result, the court may choose to award the innocent party with a larger share of the assets, and even impose legal consequences on the dishonest individual.
Rather than trying to outsmart the courts, there are a number of ways that recently divorced individuals can invest to accumulate their assets once the divorce is final. Finding the right solicitor, particularly one with a strong network of financial advisors and tax experts who can help you make the right, long-term decisions, can be the solution.
Rebecca Creswell, Head of the Family Law department at Sweeney Miller Law commented: “Ultimately, deliberately trying to hide assets, finances, or debts during a divorce is unlikely to end well, even if it might seem like the ‘only way’ to protect your money at the time. If the court discovers any dishonesty around the financial declaration, it could be bad news for your finances!
If you’re concerned about protecting your assets or finances during a divorce, the best thing to do is speak to a solicitor about your situation. We can work with you and use our close network of financial advisors and tax experts to help you to secure the best result for you and your money during the divorce and going forward.”
Legal advice on financial infidelity
If you are starting divorce proceedings and are concerned that the other party is concealing financial information, whether it be debts or assets, in order to manipulate the financial settlement, it is important to get advice from knowledgeable, reputable family law solicitors.
Sweeney Miller Law’s family law department, led by Rebecca Cresswell, offer a 30 minute no-obligation consultation in which you can speak to a member of the team in order to better understand your situation, and financial options. We have strong connections with expert financial and tax experts both locally and nationwide who can help you ensure your finances continue to be healthy post-divorce.
Please get in touch today by emailing enquiries@sweeneymiller.co.uk.
