Episode forty-eight of the Divorce and Your Money Show discusses why you need a secret fund before you get divorced.
When you are beginning or contemplating a divorce, you should have a separate bank account that your spouse does not have access to. This account should only be under your name—preferably at a different bank.
Here is the reason why a secret account is important: As soon as the divorce process starts, money begins to disappear. Your spouse can transfer funds or take away assets via a number of scenarios. You will need funds to pay for divorce expenses, including your attorney. You also have to pay for your everyday living expenses while the process is going on.
Using the joint account can lead to further complications during the divorce procedures. If you do not have cash set aside for these expenditures, you could be in a situation you never expected to be in.
The account does not necessarily have to be secret; it just needs to be under your name. When you go to your attorney, you will have to disclose it anyway—as providing the details of your assets is a legal obligation.
If you are early in the divorce process or just considering it (and you do not have those assets set aside), you can end up in a terrible financial situation. Think of it as money that you have set aside for a rainy day: You are the only one who has access to it. If you have a joint email or postal address, do not make the rookie mistake of having your statements sent to that address. When things go south, you do not want your spouse to know about the details of this account.
Having a secret account is not immoral, and you should not feel guilty about it. You should feel empowered about having a separate account. It is a sort of insurance policy, which can protect you. It is a crucial backup plan, which one needs to have before wading into the treacherous waters of divorce.
Key Learning Points:
- When you are beginning or contemplating a divorce, you should have a separate bank account that your spouse does not have access to.
- This account should be set up when you get married, or as soon as your relationship starts to derail.
- Having a secret account can help you pay for expenses during divorce.
- The account does not necessarily have to be a secret; it just needs to be under your name.
- Do not use joint email or postal addresses for your statements.
- A secret account is a sort of insurance and protection for you during rainy days.