Alabama Divorce Preparation: Compiling a Secret Divorce Fund

Posted by Steven D. Eversole | Sep 24, 2013 | 0 Comments

It's inevitable that divorce is going to cost you some money.

There is really no way around it if you want to do it right. Even do-it-yourself options (which ourBirmingham divorce lawyers advise against) are going to result in money out-of-pocket – probably more in the long-term than if you had pursued a more traditional route.

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However, a lot of people find that when the time comes that they have finally made up their mind to move forward with the split, they don't have much cash on hand to make it happen. This is why it's important when you first start thinking about separation to begin compiling savings that will help you remain on solid footing if and when you decide to leave.

There will be nothing written in stone that says you have to spend it. Simply having it doesn't mean you're inevitably going to divorce. However, there is power in knowing that you can survive on your own.

While few people get married anticipating a divorce, one of the regrets we hear many clients voice after the fact is that they weren't more financially prepared. It's not even so much the attorney fees as the filing fees, the court costs, the sudden expense of going from being a two-income household to a one-income household, etc.

In a lot of cases, we find that spouses were kept in the dark about family finances. They have no real idea about their spouses income and monthly expenses. Many wish they had maintained more control of their money once they entered the marriage.

So one of the things we advise, particularly for those contemplating a split, is to begin taking a more active role in the family finances. It's never too late for this, and again, if you end up staying together, this hurts no one.

You may also want to consider establishing at least some level of control over your own money in an account to which your spouse does not have access or perhaps doesn't even know about. We also typically recommend maintaining your own credit. Both of these will be important if you do make the decision to leave.

The amount you need to have set aside is going to depend on your situation. For example, if you anticipate that you would likely have a major custody battle on your hands, it might be best to have a larger savings accrued before you file. On the other hand, if you have no children and not many assets to divide, you probably won't need as much.

The most important thing about having a fund like this is to make sure you are the only one with access to it. There have been far too many cases we've seen in which a spouse, recognizing that divorce was on the horizon, wiped out all joint accounts, leaving the other person with few resources to live on, let alone hire a competent lawyer.

It's worth noting that having a “secret” fund in your name alone is not the same as hiding assets so that they can't be considered in the divorce settlement agreement. Hiding assets is illegal. Having your own separate bank account and not telling your spouse about it is not. You will be obligated to disclose all of your accounts in a financial affidavit as part of your divorce proceedings. However, that comes later in the process.

One thing to be cautious of is that even if the money in that account is derived solely from your own income, it could be considered a marital asset. So if you start using it to go on pricey vacations or on your own individual hobbies or to fund an affair, you could later be accused of dissipation of marital assets. Make sure the money is solely set aside for the basics, and consult with your attorney if you have any concerns.

If you are seeking a divorce in Birmingham, contact Family Law Attorney Steven Eversole at (866) 831-5292.

Additional Resources:

Pros and Cons of Keeping a Secret Fund in Case of Divorce, Feb. 14, 2013, By Jeff Landers, Forbes.com

About the Author

Steven D. Eversole

J.D., Samford University's Cumberland School of Law, Birmingham, Alabama B.A., University of Alabama, Tuscaloosa, Alabama

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