Marriages are a partnership. And one of the benefits of a partnership is splitting up the work, often assigning tasks to whoever is better suited for the job. So it is often one spouse who pays the bills and is in control of the finances. The spouse not doing this job is often thankful, but it is still a good idea to understand its financial plan. It becomes crucial for those planning for divorce.
It is an unfortunate reality that there may be a temptation to start a secret “rainy day fund” or to keep “what is rightfully theirs.” What they may be doing is taking marital property for themselves rather than allowing for a fair or equitable property division under Indiana law. Equitable does not mean a half-half split.
What is marital property?
This is money, property and other things of value accrued or bought throughout a marriage unless there is a prenuptial agreement outlining a different arrangement. Separate property only owned by the spouse, on the other hand, is a home, investments or assets, as well as gifts or inheritance.
What to look for
Those looking to understand better the family’s finances can start with important financial papers they usually sign without questions. This can be tax returns over the last few years – a Form W-2 lists a spouse’s income and any savings plans or withholdings. Paystubs can help identify retirement accounts or other special accounts like a health savings account. Attorneys will also look for the following red flags and others for hidden funds:
- An unusually large amount of transfers between business, brokerage and personal accounts.
- A bill payer requests the other spouse use a cash allowance when shopping or paying for goods and services.
- A change in the bill payer’s spending habits.
Does it all add up?
It is good to make copies of the family’s financial information, which an attorney can review. It may also be necessary to bring in a forensic accountant or financial expert if the numbers do not add up. While this may seem underhanded, the goal here is to ensure that the couple gets their fair share, whether it is negotiated outside of court or litigated.