Did you know that approximately forty percent of those who were surveyed admitted to hiding financial information from their partner in some way? These findings are derived from a survey that was carried out by the Money and Pensions Service. In today’s post, we’ll discuss how to protect your financial privacy throughout a divorce or separation.
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What We Can Learn About Ourselves From the Money and Pensions Service Survey
The Money and Pensions Service conducted a poll in which 5,200 people from around the country were asked questions regarding their personal financial habits and finances. The most important discoveries are:
- Those who are between the ages of 25 and 34 are the most private age group, with three in five not disclosing data about their finances to their loved ones.
- Although over one quarter of respondents to the poll believed that their spouse, wife, or partner was concealing financial information, the fact is that nearly half of respondents admitted that they had themselves concealed information.
- It is very typical for people to conceal their credit cards and their credit card debt; in fact, over forty percent of those who participated in the poll admitted to having done so.
- Just over twenty percent of individuals polled admitted to keeping undisclosed debts a secret from their family, making this the second most common item respondents conceal from their loved ones.
- Approximately twenty percent of people who participated in the poll admitted to having a hidden savings account.
According to the Money and Pensions Service, there are a lot of different reasons why someone would want to conceal money or not divulge their financial condition while they are in a relationship. Some of these reasons include the following:
- with the goal of creating a financial cushion for themselves through money that their partner won’t touch. This manner, there is a savings fund available in the event that someone loses their job or there is a huge unexpected expenditure, such as having to replace the boiler.
- Having the feeling that you need to save money so that there is a way out of an abusive relationship, when the spouse who is hiding the money is worried that if they try to leave their controlling partner without the concealed money, it will be hard for them to do so.
- Covering up loans and credit card debt since you are aware that your partner would be concerned about the financial situation.
- A sense of shame at having racked up debt; in some cases, the debt was racked up before the new relationship, and it now seems “too late” to address it.
The Money and Pensions Service encourages people to talk about their finances because doing so can make money worries more manageable. This is especially helpful when you are concerned about other matters, such as the impact of Covid-19 on the prospects of your getting a 2020 bonus from your employer. The Money and Pensions Service encourages people to talk about their finances because doing so can make money worries more manageable.
Covert dealings with money, as well as divorce and separation
As divorce lawyers in Manchester, we are required to inquire about various financial concerns in order to provide the most accurate guidance possible regarding the many alternatives for financial settlement. When a person’s spouse is unaware of their unrevealed credit card debts or loans, they may be hesitant to bring up the subject of their financial obligations. However, it is essential that you do so since having such debts might make it difficult for you to assume responsibility for paying the mortgage on the family home or to obtain a new mortgage to purchase a different property.
In situations where there is debt and subsequent court proceedings for financial settlement, the court will almost never want to conduct a forensic investigation into how the debt was incurred and whether, for instance, you should have purchased the shoes or motorbike. Instead, the court will ask the following question:
- Is the debt a family debt? To put it another way, when the debt was being concealed from a husband or wife, was the money from the loan or credit card being utilised for the family’s benefit? For instance, a credit card was used to purchase clothing for the family, as well as to pay for family vacations and a car for the family.
- In what ways does the debt manifest itself? The court will want to determine whether or not the debt will prevent either spouse from being able to buy another property, continue living in the family home, or satisfy their other requirements.
When it comes to financial disclosure on separation or divorce, there is a need to produce what is referred to as full and honest financial disclosure of all of your assets. This requirement exists in addition to the obligation to disclose debts upon divorce. This includes cash that you keep or cash that you give to a member of your family with the instruction that they “hold” it for you, as well as hidden bank accounts that your husband or wife does not know anything about.
If you fail to provide full and honest financial disclosure, it is possible that you will have a harder time reaching a financial settlement by mutual agreement. This is because your spouse probably won’t believe your financial disclosure, and a court may be more likely to draw inferences or make findings against you during a financial settlement court hearing if you don’t provide full and honest disclosure. For instance, if your family business is successful but, according to your financial statements, you bring in an amount of money that is insufficient to cover your necessary expenditures (such as your mortgage, your utility bills, or any other known expense), then the court may draw adverse conclusions or make findings against you.
Therefore, even though there may be many reasons why you would want to keep things secret while you are in a relationship, when it comes to a separation or divorce, there is an obligation placed on you by the court to be both “full and frank” in your financial disclosure. This is the case even if there are many reasons why you would want to keep things secret during the relationship.