One in five people in a relationship say their partner is financially irresponsible, and that they’re 10 times more likely to divorce for financial reasons, according to a new survey released from insurance comparison website Policygenius. Will running up excessive debts and other forms of financial infidelity be an issue in your divorce?
The survey polled 2,005 adults in relationships and asked them questions like “What financial information do you and your partner know about each other?” and how they deal with money as a couple. The findings revealed that only 50% of people know their partner’s credit score, and yet 78% of those surveyed manage joint finances.
“If you’re at all doubtful about transparency, get a credit check. If they don’t give you permission to get a credit check, you’re in trouble. Know everything about your own finances, your mate’s finances and have a plan for how you’re going to work together to budget effectively and save for the future.”
The reality is that most couples openly commit financial infidelity: 12% of people in a relationship have hidden a purchase from their partner; another 20% say they’d spend $500 without telling their significant other and what’s worse, 16% said they don’t know anything about their partner’s money situation, according to the survey.
Florida Divorce Debts
I have written about divorce debts and other forms of financial infidelity before. In Florida, liabilities such as credit card debts – even if it happened without your knowledge – may be treated as any other kind of debt.
Generally, in divorce proceedings the court has to set apart to each spouse that spouse’s nonmarital assets and debts, and in distributing the marital assets and liabilities between spouses, courts have to begin with the premise that the distribution should be equal, unless there is a justification for an unequal distribution.
Some of the relevant factors for justifying an unequal distribution include the economic circumstances of the parties, the duration of the marriage and the intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition.
A common complaint in divorce is that someone will steal or destroy assets once they learn that a divorce has been filed, or run up huge credit card bills. This could be found to be dissipation or waste.
Other forms of dissipation include:
- Incurring major gambling losses;
- Excessive spending on alcohol or drugs;
- Conveying marital property to family members or friends below cost with the intent to reacquire the undervalued asset post-divorce;
- Destroying big-ticket personal property; and
- sustaining losses concerning a sham investment.
If a judge determines there was an intentional dissipation, waste, depletion, or destruction of marital assets, the court can divide the remaining marital property and credit or debit accordingly.
Husband and Wife Money Summits
Financial infidelity and fights about them are increasingly a pain point in relationships, particularly when one person is tight with money and the other spends more liberally. People are twice as likely to describe themselves as savers and their partners as spenders, according to separate data from SunTrust Bank.
Because of these woes, some couples are enrolling in financial therapy to get on the same page about finances. Money summits have sprouted up around the country to help couples talk about daily budgets, divvying up financial responsibilities, debt and financial goals, like saving up for a baby, a new home, retirement or for vacation.
There are little things couples can do every day to maintain a financially healthy relationship, whether it’s carving out hour-long money dates to talk openly about what you’ve spent that week and why, or to plan ahead for future expenses.
“Decide in advance how you will handle major purchase decisions together,” said Brittney Castro, a certified financial planner. “For example, some couples agree to discuss every purchase over a certain amount of money. Hurt feelings may arise from the surprise of an expenditure, rather than simply that the money was spent,”
The Fox Business article is here.