Berman & Asbel, LLP

"Hidden" divorce savings can affect property division

When preparing to divorce, many Pennsylvania spouses fear retaliatory actions on the part of their soon-to-be ex. One commonly used tactic is for the embittered spouse to limit or block the other party's access to joint accounts or other financial assets. This can leave one spouse ill-equipped to pay for living expenses or legal needs during the timeline of the divorce and property division process.

A common preventative measure against this involves opening and funding a 'secret' or 'hidden' divorce fund. While there is nothing wrong with setting aside money to get one through the divorce timeline, the manner in which such an account is funded can be very important to the divorce process. Should the other party find out about the account, he or she could make an accusation that the account is a dissipation of marital assets, a very serious charge.

The best means of avoiding this type of problem is to pay close attention to how the account is funded. Money used to feather this nest should come from separately held assets. Examples include money received from an inheritance or from the sale of personal property. In addition, property owned prior to the marriage or protected by means of a prenuptial agreement can be used to fund a hidden account.

When a high level of contention is expected within a divorce process, it makes sense to avail oneself of full knowledge of Pennsylvania divorce law and procedures. Making savvy decisions at the onset of the process can contribute to a desirable end result. In terms of 'hidden' savings, the manner in which such savings are funded can avoid property division complications down the line.

Source: Forbes, "Pros And Cons Of Keeping A Secret Fund In Case You Divorce," Jeff Landers, Feb. 14, 2013

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