By Ana-Luisa Gallo
When — till death do us part — no longer fits the matrimonial equation, you ought to be sure your finances are in order before you walk OUT of the marriage.
Experts in the field of family law report an increase in divorces due to a new trend labeled “financial infidelity.”
It refers to the act of one spouse overspending family money without the other’s knowledge.
Such is the case of Carla Cordoba, a Hispanic woman, who told us she went through an ordeal when her husband’s love for poker turned into an addiction, and she failed to see the signs of his overspending the family money.
His “financial infidelity” led him to conceal the use and abuse of family funds. Over the course of six months, his gambling at various local casinos, as well as, via the internet depleted $80,000 from the family’s savings.
Though bank and credit card statements were sent on a monthly basis to the home, Carla neglected to read them. Her failure to participate in the home finances contributed to the problem.
A family law specialist said, “I see more cases of divorce caused by financial infidelity than I do from sexual infidelity. Spouses are trained to look for the proverbial ‘lipstick on the collar,’ but it doesn’t occur to most people to check periodically to make sure their spouse hasn’t cashed out the 401(k) to play the ponies.”
A Certified Public Accountant, said, “Women, especially those coming from minorities or traditional homes, are particularly vulnerable. Thus becoming victims of their husbands’ mishandling of money. They fail to participate with the family finances and only when things go completely wrong, (do) they wake up. I strongly advise my clients to get involved in all the financial decisions that can affect the family nucleus.”
However if divorce is the only recourse left for couples, there is a checklist of common to-do items that can save every couple time — and frustration. Yet, it’s always best to consult professionals in the field of family law to ensure that you receive the proper advice for your particular situation and needs.
When going through a divorce:
Do not expect fair and cooperative behavior from your spouse. He/she will be looking out for “Number One.”
Help your divorce lawyer by not withholding information.
Do not sign documents without fully understanding what they are about.
Double-check the accuracy of data you receive — especially, income.
ALWAYS, keep independent counsel — legal or financial.
Order a credit report from each of the credit reporting agencies. This will show ALL the outstanding debts acquired during the marriage. Equifax, Experian (AKA TRW) and Trans Union are the most important.
Close all joint accounts, pay them off. If you are unable to do so, freeze them so no more debts can accumulate. At the end of the divorce, if the debt of an account is assigned to one of the spouses, close the joint account and transfer the balance to an account that is only in the name of the person responsible for that account. If you do not do that and your ex-spouse defaults payment, you will be liable.
Pension/retirement plan – A QDRO (pronounced ‘quad dro’ and stands for Qualified Domestic Relations Order) is a separate court order awarding a share of the pension to each party in the divorce. Consult an attorney for more details.
Work into your divorce settlement a “Post-nuptial agreement”.
Check your legal ID – If you’re going to be changing your name with the divorce, announce this decision to all creditors, employers, health care providers, etc. Not informing interested persons immediately could affect your finances.
Finally, once your divorce has finalized, it is a good idea to monitor your credit for a while to be sure there are no surprises errors in those debts that have accumulated during your marriage.
Originally from Lima, Peru, Ana Luisa Gallo is a graduate journalism student at the International Center for Journalists.