Divorce is a notoriously expensive process. Spouses need to pay for court costs, filing fees and legal representation. They need to divide their property and may need to accept responsibility for a portion of certain marital debts.
Those going through a divorce also need to start managing the household where they live on their own. Transitioning to a financially independent arrangement can be difficult after years of combining income with a spouse. Those anticipating a likely upcoming divorce often try to set themselves up for a smooth financial transition.
In some cases, people going through a divorce may make mistakes during the financial part of the process that can lead to accusations and property division complications after they file.
Separate bank accounts still require disclosure
One of the most common pieces of advice people offer those preparing for divorce is that they should start separate checking accounts and possibly open credit cards solely in their own names. The idea is to have financial resources available when the divorce occurs. By setting aside funds and establishing separate credit, spouses can more easily cover their basic expenses during the separation and divorce process.
There is nothing wrong with funding a separate bank account and establishing a personal credit card when preparing for divorce. The choice to do so can become an issue when people do not disclose the account to their spouse and the courts. Even a checking account in the name of one spouse is potentially part of the marital estate. People have a legal obligation to make accurate and thorough disclosures to their spouses and the courts during the discovery process.
Bank accounts and other assets in the name of one spouse are not exempt from those rules. Spouses have an obligation to disclose all marital assets and debts. They may not need to directly share the content of the account that they funded with their spouse, but they likely do need to factor in the value of those funds when resolving other property division matters.
If one spouse can credibly claim that the other attempted to hide assets or misrepresented their resources, property division proceedings can become more complicated. Recognizing how seemingly minor choices may have negative impacts on divorce outcomes can be beneficial for those in the process of preparing to file.
