It’s a topic we get a lot of questions about – How do I hide money from my spouse legally? Should I put money aside for a rainy day divorce fund? Is a secret cash stash a good idea?.
There are many reasons why someone may be inclined to hide money from their spouse. Even if your marriage is going well, this stash gives you peace of mind that you have something to fall back on if things go badly. Maybe you sense that divorce is on the horizon and you just want to be prepared when the time comes and you are ready to leave.
A friend of mine has been happily married for 20 years, but her mother still occasionally sends her money to put in her “leaving fund. ” Her mother firmly believes that every woman should have a similar fund just in case. Many married women today have jobs and are even the “breadwinners,” so this way of thinking may sound a bit out of date. However, it still makes me wonder if it’s a good idea to keep a little stash of cash hidden.
In many marriages, finances can become a sensitive topic. Whether you’re concerned about potential divorce, dealing with financial abuse, or simply wanting some financial independence, you might wonder about legally hiding money from your spouse. While complete transparency is usually best for relationships, certain circumstances may warrant setting aside funds your partner doesn’t know about.
This article talks about different legal ways to hide money from your spouse. It also talks about important issues like ethics and the possible outcomes of doing so.
Is Hiding Money From Your Spouse Legal?
Before diving into methods, let’s clarify the legality. It’s not technically illegal in most places to hide money from your spouse while you’re married. But hiding assets during a divorce is against the law and can have very bad results.
“While hiding money from a spouse is not usually a good idea,” says Bella Mertz of TheMoneyKnowHow, “there are times when it may be necessary, such as when you are trying to protect yourself from financial abuse or getting ready for a possible divorce.” “.
When Might Someone Need to Hide Money?
People consider hiding money from spouses for various reasons
- Protection against financial abuse
- Creating an emergency fund in case of sudden relationship breakdown
- Building a “leaving fund” if in an unsafe relationship
- Preventing “spousal starving” (when one spouse empties accounts during separation)
- Maintaining some financial independence
10 Legal Ways to Hide Money From Your Spouse
1. Don’t Disclose New Income
If you receive a raise bonus, or additional income, you might choose not to disclose it. This isn’t technically lying—you’re just not revealing the full truth. You can transfer the “extra” money to a separate account while continuing to contribute your regular amount to joint expenses.
2. Get Cash Back at Checkout
When making purchases with a debit card, request cash back. Say your groceries cost $50. Ask for $20 back in cash. The charge will appear on your statements as $70, but you’ll have $20 in cash that isn’t being tracked.
3. Use a Safe Deposit Box
A safe deposit box at a bank can securely store cash and valuables. Since only your name is on the box, your spouse won’t have access to its contents or know what it contains.
4. Fake Loan Repayments to Family
Tell your spouse you’re repaying a loan to a family member, when in reality, that person is holding the money for you. This gives you an explanation for money leaving your accounts regularly.
5. Purchase Returnable or Resellable Items
Invest in items that maintain value and can be sold later if needed—jewelry, electronics, or other items that can be returned or sold on secondary markets.
6. File Taxes Separately and Overpay
If you file taxes separately from your spouse, you can increase your tax withholdings, resulting in a larger refund later. The refund check will come directly to you if you’re the only one listed on the tax return.
7. Use Prepaid Cards and Gift Cards
Load prepaid cards or gift cards with money. These cards are difficult to track and can be used almost anywhere. Just ensure they don’t expire and keep them secure to avoid loss.
8. Don’t Disclose Cash Income
If you have a side hustle or job that pays in cash, you can keep this income separate. This is one of the simplest ways to build a hidden fund.
9. Open a Personal Credit Card
Apply for a credit card solely in your name. Have statements sent to your email rather than physical mail. This gives you access to funds without your spouse’s knowledge or approval.
10. Delay Promotions or Bonuses
If you’re expecting a promotion or bonus at work, consider asking your employer to delay it. This way, the income might not be included in divorce proceedings if they occur before the payment is received.
Important Considerations When Hiding Money
Keep a Paper Trail
While hiding money isn’t illegal during marriage, it’s important to maintain records of where the money came from, especially if it might be considered separate property (like inheritances or gifts specifically to you).
As noted in TheMoneyKnowHow, “If you or your spouse earned the money in your rainy day divorce account during your marriage, it will be deemed marital property and its value will be factored into your property division.”
Understand Divorce and Asset Division
If divorce occurs, hidden assets will likely come to light during proceedings. Most states follow either:
- Community Property: Marital assets divided 50/50
- Equitable Distribution: Assets divided “fairly” according to the court’s analysis
Be Aware of Potential Consequences
Hiding money from your spouse can have several negative consequences:
- Broken trust: If discovered, hidden accounts can severely damage trust
- Legal ramifications: During divorce, failure to disclose assets can result in penalties
- Emotional fallout: Your spouse may feel betrayed, which could lead to more hostility in divorce proceedings
As Holstrom, Block & Parke, APLC advises, “Courts take a very dim view of spouses who try to hide assets in divorce, and you could be penalized in your divorce settlement on top of other legal penalties.”
Protecting Assets Without Hiding Them
Rather than hiding assets, consider these alternative approaches:
1. Open Separate Accounts with Mutual Agreement
Have an honest conversation with your spouse about maintaining separate accounts alongside joint ones. Agree on an amount both parties can keep in personal accounts with no questions asked.
2. Inventory Your Assets
Keep detailed records of all your financial assets, including statements from the past year. Categorize which assets belong to you individually, which belong to your spouse, and which are shared.
3. Monitor Your Credit
Regularly check your credit reports for any suspicious activity or unauthorized credit lines. This protects you from potential financial manipulation.
4. Transfer Funds to Separate Accounts Before Separation
If separation is imminent, consider dividing joint accounts into individual accounts, ensuring fairness and preventing one spouse from restricting the other’s access to funds.
Red Flags Your Spouse May Be Hiding Money
Be aware of these warning signs that your spouse might be hiding assets:
- Receiving mail from unfamiliar banks or financial institutions
- Sudden refusal to discuss finances
- Unexplained decrease in paycheck amounts
- Unusual financial transactions on bank statements
- Missing financial statements or newly paperless accounts
- Unexplained cash withdrawals
FAQs About Hiding Money From a Spouse
Can I empty my bank account before divorce?
Technically you can, but courts will still determine how assets should be divided. It’s usually best not to spend these funds until the court makes its determination.
Can my spouse take my retirement in a divorce?
Retirement benefits earned during the marriage typically become marital assets and part of the divorce settlement.
Can my spouse take my inheritance in a divorce?
This depends on when you received it and how you used it. Inheritances received before marriage or kept completely separate from marital assets may remain yours alone.
What happens if hidden assets are discovered during divorce?
If courts discover you’ve hidden assets or made false statements under oath, you could face financial penalties and potential criminal charges.
The Bottom Line
While there are legal ways to hide money from your spouse during marriage, doing so carries risks to both your relationship and potentially your legal standing if divorce occurs. In most cases, open communication about finances is the healthier approach.
Adam Kol, The Couples Financial Coach, suggests: “Rather than hiding money, though, it’s better to be open about your financial assets and agree on an amount both parties can keep in a separate bank account with no questions asked. This way, both parties feel protected, but no one hides cash or can be accused of financial infidelity.”
If you feel the need to hide money due to concerns about abuse or control, consider speaking with a financial advisor, therapist, or attorney who can help you navigate your specific situation safely and legally.
Remember, this article is for informational purposes only and should not be considered legal advice. Always consult with a qualified legal professional for guidance specific to your situation.
What North Carolina Courts Say
In Wake County and the surrounding counties, funds will be split exactly as outlined above. Marital funds are evenly divided between spouses and non-marital property belongs to its respective owners. This extends to bank accounts, tangible items, and cash, so if you have used marital funds for your rainy day divorce fund they are subject to division regardless of what form it’s in.
Take an Active Role in the Finances
Before we get into the nitty-gritty of whether you should hide money from your spouse, one thing you can do to protect yourself is to take a more active role in your families’ finances. For many families, one spouse is in charge of all the “money-related” tasks, like balancing the checkbook, paying bills, and investing money. If you are the spouse who isn’t involved in the finances, you should take steps to get more involved.
If you are the joint owner of an account, you should be aware of it. Make sure you have access (online or otherwise) to any account that you are joint owner of. Also, ask your spouse where money is being invested and ask about retirement plans. Be aware of how much your spouse earns (including commissions and bonuses) and if his employment allows him to participate in stock options or other business perks.
Being more involved in the finances will ensure that you are not left completely in the dark if you end up having to split assets due to divorce.
The people who didn’t pay attention to the family finances could be seriously hurt when the divorce process starts. Consider a scenario where one spouse assumes that the finances are under control, smartly invested and that the marital estate is worth a substantial amount of money. As the divorce process goes on, it turns out that the opposite is true: the couple’s debts are higher than their assets, and the estate is close to going bankrupt.
The bottom line is that it certainly can’t hurt to take a more active role in the family finances.