We have all heard jokes and comedy routines about wives having a “secret stash” or a “rainy day fund” that can fund girlfriend trips or shopping sprees, but we often get questions about whether it is beneficial to have such a fund in the event of a divorce.
While we are advocates of financial independence, there are naturally pros and cons to having clandestine coffers. This post will explore the benefits and drawbacks of having them.
It’s ready-made insurance – Like the famous catchphrase in the Allstate commercials, “Mayhem is always around the corner.” Because of this, having a secret fund can be the perfect insurance policy that doesn’t require the trouble of filing forms, having an inspection and waiting for compensation.
What your spouse doesn’t know… - Can be a benefit to one’s sense of self-esteem and financial independence. We have counseled women who believe that they could not leave a marriage because the financial implications would be devastating (i.e. they could not afford to leave the marriage).
It could be source of strife – In some circles, having a secret stash is akin to financial infidelity, which can be just as damaging as a physical or emotional affair. Essentially, the trust that holds an already frayed marriage could be destroyed if discovered.
Being accused of hiding assets – Being suspected of hiding money has tremendous consequences aside from potentially destroying one’s credibility during divorce proceedings. Indeed, having one’s own money in a separate account is not illegal, but if it is found that money was not disclosed in a financial affidavit, that could mean trouble.
If you have questions about how a secret account could affect your divorce, an experienced family law attorney can advise you.
The preceding is not legal advice.