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Claery & Hammond, LLP Claery & Hammond, LLP
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Divorcing When You're in the Dark About the Finances

A Legal Team You Can Trust

You’ve probably heard that saying about knowledge being power, which has a lot of truth to it, especially in the context of divorce. But sometimes divorce can have an uneven playing field, especially when one spouse has full control over the couple’s finances and the other spouse, usually the lower-earning one, does not have any say in how bills are paid, money is saved, or how money is spent.

When one spouse has all the control over the finances, then his or her wife is referred to as the “out spouse.” The out spouse is usually the lower earner, or they are unemployed because they are a stay-at-home mother or father or a homemaker. While not all “out spouses” are unemployed, they are almost always the lower wage earner in the marriage.

Life of an Out Spouse

While every marriage is different, there are certain things about out spouses that tend to be rather uniform. For instance, the out spouse may have to ask their spouse for spending money. “Honey, can I have $20 to buy the kids snacks at the library café today?” or “Suzie needs a new dance costume, which will cost $60, can I have the money?” or “I am all out of cash and have nothing in my wallet, can I have $40?”

If the out spouse doesn’t have to ask for cash, they may be on a weekly or monthly allowance. Or, they may need to run all purchases by their spouse or provide receipts. Out spouses are often in the dark about:

  • How much their spouse earns every month.
  • How many bank accounts they couple has.
  • How much money is in those bank accounts.
  • How much money is in a 401k or IRA.
  • How much the monthly bills are.
  • The couple’s combined annual income.
  • How many credit cards their spouse has.
  • The balances on their spouse’s credit cards.
  • How many investments the couple has and their worth.
  • The value of life insurance policies.

Paying Bills Together

Every couple handles their finances differently, but there are couples that pay bills together each month. With these marriages, both spouses are hyper-aware of their assets, debts, and monthly expenses. Both spouses know exactly how much is coming in, and how much is going out. But with other couples, it’s the opposite. There is an “in spouse” and there is an “out spouse” and the out spouse knows little, if anything about the couple’s finances.

Are you an out spouse? If so, you may be worried about getting a divorce. You may feel like you have no idea what your marital assets are, and you may even be afraid that your spouse is going to hide assets from you. Or, you may be afraid that your spouse has been concealing assets for some time in preparation for an impending divorce. Before we discuss protecting yourself, we want to explain California’s community property laws, so you have a better idea of what you’re entitled to.

California’s Community Property Laws

In the United States, we have equitable division states and community property states. California is a community property state, which means both spouses have a 50 percent interest in all of the property acquired during the course of the marriage, regardless of who earned the money, or whose name is on the title. This means that you are legally entitled to half of all the marital property, but not “separate property,” which is not divided in divorce.

Separate property includes inheritances in one spouse’s name alone, gifts to one spouse, and assets or property acquired beforethe marriage, with limited exceptions. However, if you have a valid prenuptial or postnuptial agreement, you and your spouse may have decided to deviate from the community property model. In that case, your assets would have to be divided according to the terms in the prenup or postnup.

“What if we don’t have a prenup, can I be forced to take a bad divorce settlement if my spouse refuses to budge?” No, not at all. If your spouse tries to convince you to take an unfair divorce settlement, you don’t have to accept it! You may want to take your case to court so you can get your fair share.

Whenever a couple cannot reach a settlement, the case goes before a judge, who enforces California’s community property laws. So, if your spouse is threatening, “You won’t get a dime!” or “You’ll walk away with nothing,” realize those are only empty threats if you have a skilled divorce lawyer in your corner.

Will Your Spouse Hide Assets?

Are you afraid that your spouse will hide assets in an effort to cheat you out of your fair share? If so, that’s against the law. In this scenario, we suggest not mentioning divorce until you get your attorney’s okay. What you should do is see if you can locate as much financial documentation as possible, such as the mortgage papers, the tax returns, credit card statements, etc. and make copies and keep them someplace safe, like at work or at a friend’s house. Then, contact our firm and set up a free consultation.

Next: Divorce Checklist: What to Discuss with a Lawyer

If you suspect your spouse is hiding assets or has the potential to, we want to know about it right away. By law, your spouse has to disclose all of their financial information, but there are legal tools that can be used to protect you financially, and discover if your spouse is in fact hiding assets from you. If they are, it won’t sit well with the judge and can certainly backfire on them. To learn more, we urge you to reach out to our firm today.

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