Phone: 301-738-7770
Steven J. Gaba
Phone: 301-738-7770

Risks and benefits of maintaining secret divorce funds

Hindsight is always 20/20. As such, many who have gone through divorce wish that they had done certain things differently. In many cases, Maryland spouses undergo difficulties associated with cash flow during the divorce process, and wish that they had set aside funding to weather the timeframe between filing and the final settlement. However, the decision to create and maintain a 'secret' divorce fund has both benefits and risks.

From one perspective, having money set aside can be a very empowering thing, especially for spouses who had little or no control over the family finances during the marriage. A separate account can contain assets that were brought into the union by that spouse, such as property holdings or other investments. An inheritance can also be placed within a separate account, and saved until needed most.

On the other hand, maintaining a secret bank account involves a level of duplicity and dishonesty. While this may not be of concern once a marriage is headed for the cliff, it can certainly lead to feelings of distrust and unease between otherwise happy spouses. This is an area in which it is important to consider the risk of not having access to one's own finances.

One significant concern with having one or more hidden accounts involves the chance that one could be accused of dissipating marital assets. This is not of concern when the money within the account is owned solely by the account holder. However, if the finding comes from marital assets, keeping it within a hidden bank account can lead to legal trouble down the road.

When considering how to save money to weather the divorce process, there are a number of methods that can be employed. For Maryland spouses who are concerned about the ethics or legality of such a fund, it may be worth asking for legal advice to determine which funding sources are held separately, and which are marital property. As the old adage goes, better to have it and not need it, than to need it and not have it.

Source: Forbes, "Pros And Cons Of Keeping A Secret Fund In Case You Divorce," Jeff Landers, Feb. 14, 2013

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