Welcome to the Ayo & Iken legal roundtable. We tackle the toughest legal issues with down-to-earth commentary you can use from our expert panel of attorneys which spans Florida from Tampa to Orlando and Miami.
In this edition, we will be discussing a financial decision that should be considered prior to a divorce: whether to move or hide money in order to protect yourself.
With finances already being a leading cause of divorce and marital strain our attorneys say it can be important to secure funds prior to a divorce because once an action is filed assets can be frozen until a divorce goes through the court system.
Our panel this session is made up of Ayo & Iken Tampa Attorneys Jeana Vogel and Sara Evans; Tampa Attorneys Kevin Fuller and Bruce Przepis; and Orlando Attorney Jason Ponder. To get our panel talking we pitched them some questions on the issue.
Should I move or hide money prior to a divorce?
I definitely recommend it if the other person is the bread winner and will take it if you don’t do it first. You are able to take it but you also have to declare it once a divorce is filed. I wouldn’t advise going on a shopping spree, but I definitely advise clients to secure themselves. If there are joint accounts you can open an account that is just in your name but people need to be aware that if you frivolously spend you may have to pay that money back. So you have to have a paper trail of where the money has gone.
When you file for divorce judges will file a temporary standing order, it’s like an injunction that prevents the spending of assets until the case is concluded. Until that order is entered, however, there are certain cases where I recommend maybe moving money. If you have a spendthrift for instance, someone that is just spending money or running up credit cards for ridiculous things, or is not paying bills it might be important to move funds or have the court freeze the assets. Many times alcohol or drug problems can be a factor in causing a divorce so if your partner is draining your bank accounts to feed their addiction you may want to prevent them from having access to the money. But it’s so important to remember that you still have to account for it. Don’t spend it on anything other necessities. If you spend all of it, you may have to pay back your spouse all of it.
I don’t think you should be hiding it, but if you feel your money needs to be protected it is always an option to move it into a private account. At a minimum if you are filing for divorce you should be taking at least half but only spending it on valid marital purposes not on a new BMW or a trip to the Bahamas. But make sure you have what you need to survive. If you are a stay at home mom and have two kids and dad is having an affair I recommend taking all of the savings until I can get it into court and get and order providing what is needed while the divorce is settled.
Is there a certain amount of funds you would recommend securing prior to a divorce?
If all the funds are in a joint account 50/50 I would say you need to secure enough to provide for yourself, but I would strongly advise that someone only spends money on necessities. The court will extremely frown upon anyone vacationing or living a lavish lifestyle. I would caution a person against hiding money as it’s often traceable. If the court feels something has been done that basically has the appearance of any impropriety it has authority to award relief going back years.
I generally tell clients to move half if they are not the major breadwinner and there are a lot of assets. If they are a stay at home mom, I tell them to take as much as they can in order to survive. But you can’t use it for anything extravagant. It’s for paying bills and putting food on the table basically.
Are there times moving or hiding money is not a good idea?
It really doesn’t make any sense to move or hide money if you are the one making all the money because it’s going to be accounted for in court. They are going to ask for discovery and its going to date back so if you are bleeding accounts you may be dissipating assets and that can get you into trouble, come back to bite you. But in any divorce, you want to have a plan, don’t get me wrong. You should sock some money away to pay for your divorce and to live on. I have had cases of grown people whose only access to money is an allowance. I recommend putting it away and letting that pile up. The biggest thing is you need to have a plan. If you rush to file a divorce right now but you don’t have a place to go, at least something to live off, you’re not going to survive. You’ve got to think about it, don’t just jump.
What if you have filed a divorce without sufficient planning and find yourself without money?
It’s not all doom and gloom. You can always ask for temporary alimony or child support, but it’s not guaranteed, so it’s best to plan ahead. It’s very important to have an experienced attorney who can get the language in there with what you file in court so you reserve the right to call up matters at any time, not just at the very end. With the way the courts are backed up you’ve got to have the means to survive in some cases for quite a while, and if you don’t it’s just going to be very difficult.
There’s court orders that will be established once a divorce is filed. A judge will have a temporary standing order that will that include things like one side or the other shouldn’t turn off electricity, turn off the water, or cancel the other’s insurance.
What everyone said makes a lot of sense. But your spouse may hide all available money if he or she gets to the money first. Eventually the court will force an accounting of the money and return some of it – but you cannot survive in the short term by eating court papers. You need money! There is a slightly obscure attorney saying: Just because they do not have the right to do something, they may still have the power to do it. That means your spouse does not have the long term right to starve you but that will be small consolation if they actually do starve you out in the short term.
So what am I saying? Take the money!
As you can see from our panel’s answers that financial considerations should be taken very seriously in considering a divorce and it also worth noting that your spouse may be moving or spending money without your knowledge. The National Endowment for Financial Education conducted an interesting survey in 2011 that showed three in ten people polled admitted to financial deception with partners. I will leave this roundtable edition with a snippet of the NEFE survey findings which can be seen in full at https://www.nefe.org/press-room/news/admitting-to-financial-deceptions.aspx
“Another one in three adults (32 percent) who have ever combined finances say a partner/spouse has committed at least one of the listed financial deceptions against them.
– More than two out of three adults (68 percent) say a current and/or past relationship was affected by the financial deceptions that were committed.
– More than two out of five of these adults (42 percent) say it caused less trust in the relationship.
– Nearly one in five adults (19 percent) say it led to the separation of combined finances.
– Sixteen percent of these adults say it ultimately resulted in divorce.
– Women are more likely than men to say their partner or spouse lied to them about finances, debt, money earned (65 percent vs. 47 percent respectively).”
That wraps up today’s roundtable discussion. Be sure to look around our website for more in-depth articles on divorce, and protecting your assets.. Meanwhile we hope to see you come back to the Ayo and Iken roundtable.
Our specialized content, video, and other informative media are based on input from Ayo and Iken team members, outside guests, former team members of Ayo and Iken, independent journalists, and subject-matter authorities. The opinions expressed do not necessarily reflect the official position of Ayo and Iken. Attorneys that are not current team members at Ayo and Iken may be reached through their member listing on the Florida Bar website: www.flabar.org