Navigating Financial Infidelity and Its Effects on Marriage and Divorce
Adultery is one of the most common reasons people cite in a divorce. It’s a fundamental violation of trust — but it doesn’t always mean someone strayed from the marital bed. It’s a form of infidelity, and that can take any form, including financial infidelity. As money is crucial to one’s security and safety, being unfaithful in financial matters can seriously damage the relationship.
Let’s talk about financial infidelity, how it impacts a marriage, and how to navigate money issues during a divorce. We’ll also explore how you can ensure a fair split even if your soon-to-be-ex cheated on your shared finances.
What is financial infidelity?
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One spouse uses shared assets to deceive or mislead the other. This may accompany financial abuse (manipulating one’s partner by withholding funds, forcing them to spend their money on certain items, or restricting their use of shared assets).
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One or both spouses lie to each other about significant debt or major purchases.
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One spouse uses shared funds for activities that violate the marital vows (such as spending community assets on a mistress).
Financial infidelity may not be a dealbreaker in and of itself. However, it often reflects other problems in the marriage. Lying and deception are unhealthy in any situation.
So if adultery in money matters feels like a violation, listen to your gut. There is no shame in considering divorce and pursuing a path of fiscal independence — and eventually, a relationship with greater financial trust and equity.
Discovering that one spouse has been fiscally “unfaithful” can be quite distressing. Some couples try to work it out. Others see it as a clear sign of an irrevocably broken partnership.
In that case, financial infidelity may be cited as a reason for divorce. Texas law mixes fault-based and no-fault divorces. So while you can file merely on the basis of “irreconcilable differences,” you may want to address financial infidelity in divorce proceedings. Texas family law courts aim to distribute assets based on what’s “just and right,” and if one spouse has significantly harmed the other financially, that can impact how the case is settled.
Does financial infidelity constitute abuse in a marriage?
Abuse can take many forms: emotional, psychological, physical, and yes, financial. If one spouse engages in deceitful financial behavior using money, that could become abuse.
Financial abuse is when someone uses money to control or manipulate their partner. Hiding assets or debts — the most common form of financial infidelity — is certainly a way to do that.
Some people don’t realize this is happening until they start pursuing a divorce. That’s when undisclosed accounts, properties, and so on come to light. It’s crucial to document as much as possible and get a compassionate family law attorney on your side.
How do hidden debts and assets affect a divorce?
Because Texas is a community property state, both spouses are entitled to all property, funds, and debts acquired during the marriage (with some exceptions). That could lead to a tricky divorce if one spouse is maxing out credit cards without the other’s knowledge.
So, it’s crucial to explain this sort of financial infidelity when pursuing divorce. As family law court strives for equitable distribution of assets, most judges won’t deem it “just and right” to saddle an unsuspecting spouse with hidden debt. They’ll consider how to rebalance the scales if your spouse used shared savings on an undisclosed purchase or investment.
However, you’ll need an empathetic lawyer by your side: one who can help you identify those hidden assets and debts, track down undisclosed income, and document financial infidelity. Reach out to Alexandra Geczi PLLC for a consultation.
Alex’s Advice
Remember, you’re in charge of your path forward. If financial infidelity makes you feel unsafe in the marriage, it’s okay if you don’t want to fix it. As much as we’d like to pretend money is unimportant, it is vital for your living situation, health, child care, and sense of security.
Strategies for Addressing Financial Infidelity
A spouse who’s been hiding bank accounts, debt, or major purchases will try to cover their tracks. Unfortunately, that’s easy to do in this digital age when bank statements and receipts are all available digitally. One can also transfer or reinvest assets, put them in other people’s names, and so on.
Confronting your spouse gives them a chance to destroy any paper trail or even offload the assets in question. So, how can you bring up your concerns without losing your evidence?
Document your shared finances as much as possible
It’s vital to gather information about your finances — both your individual accounts and any shared assets or debts. Even if you can’t see your spouse’s secret bank accounts or purchases, you may be able to find hints or discrepancies in your joint accounts.
Pull your free annual credit report. Look for any accounts or debts that you don’t recognize. Remember, you are entitled by federal law to receive a free report from all three major credit bureaus — no need to spend more.
Download your monthly bank statements, which list all transactions, opening and closing balances, and deposits/withdrawals. Take note of any large withdrawals (especially at ATMs) or transfers. Does everything match your and your spouse’s declared income?
Write down every incident that seems “off” about your shared finances.
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Was that anniversary gift unusually expensive for what they could afford?
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Did you notice they wouldn’t tell you details about their holiday bonus?
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Have you seen any letters coming from banks or creditors you don’t recognize?
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Are they secretive or defensive about finances in general?
Even if it doesn’t seem like much, make a note of it, with the date and any details you do have. It may be helpful down the line.
Associate Attorney Emily Teel explains the importance of financial checkups and how they can help protect you:
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And remember, a good attorney can help you look in all the right places. If you suspect your spouse has used community funds for major purchases, has concealed debt from you, or is otherwise engaging in financial infidelity, an attorney can submit a subpoena request and otherwise dig below the surface.
Stick to the facts
When addressing any sort of marital conflict, present your case the same way your lawyer would: “just the facts, ma’am.” Describe what you’ve noticed and experienced. Avoid phrasing things as accusations. Try to remain as objective as possible.
It can be helpful to structure your observations as questions. For example, you could say, “I noticed that about $1000 is being withdrawn from our joint account every month with no record of what’s it for. Can you tell me about that?”
Or, “I saw that Discover keeps sending us credit card statements, but I didn’t think we had a Discover card. Do you know what that’s about?”
Financial infidelity can be a huge violation of trust, which makes it hard to even ask these questions. Remember, you’re just gathering information. This can empower you to make informed decisions in the future.
Addressing Hidden Debts and Assets in a Divorce
Texas law allows any properties, funds, or debts acquired during a marriage to be equitably divided between the spouses when they divorce. However, financial infidelity counteracts equity by definition. In other words, if one spouse acquires huge assets or debts by deceiving their spouse, those cannot be equitably distributed because the other spouse didn’t consent to them.
Resolving this matter calls for something called “reconstituting the marital estate.” Your legal team and the family law court will determine the total value of the community estate if no fraud or deception occurred. This means that major investments, real estate purchases, etc. that your spouse made without your knowledge won’t be considered part of the community property. More importantly, any huge debt your spouse acquired without your knowledge may remain theirs, not yours.
If your spouse used community funds to acquire major purchases or investments behind your back, the court will strive to award you the rightful portion. This may include recompensation if you would have been entitled to jointly held savings or property that was lost due to financial infidelity.
As you can imagine, this all requires a lot of documentation — and lawyers who are ready to go to bat for you. At Alexandra Geczi PLLC, we take a problem-solving, compassionate approach to financial infidelity and other factors in your unique case. Reach out for a consultation.
The Bottom Line: You Deserve Financial Freedom
Any sort of infidelity can be heartbreaking. It’s often hard to know how to proceed when your trust has been broken. And when your financial security and health are on the line, that triggers many new concerns about your future.
Don’t forget: you have the power to forge a brighter, safer future for yourself. Be proactive and document all you can about your finances, both individually and with your spouse. If you’re considering divorce and suspect financial infidelity, don’t be afraid to cite your concerns. A detailed approach can help you start on your own path without being punished for your soon-to-be ex’s deceitful behavior.