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Secret bank accounts can empower spouses, but watch for pitfalls

Today millions of Texans will celebrate Valentine's Day, some more extravagantly than others. Many couples will keep the affair low-key with dinner and a movie. Others will exchange lavish gifts. How you do it may depend on your household finances; if you and your spouse keep all of your money in a joint bank account, it becomes the thought that counts, since both of you have probably contributed to that account. But some couples choose to set some funds aside in a private account, allowing them to spend their money in whatever way they choose.

Separate bank accounts have their pros and cons, especially when the romance fades and a couple ends up divorcing. Because Texas is a community property state, which means that all marital property must be divided equitably, there are special property division considerations for couples who have set aside assets for themselves.

Having a separate account -- perhaps even a secret account -- can provide divorcing spouses some security, especially if one spouse attempts to drain the couple's joint account before the property division happens. For women who gave up their careers to raise children, having a separate stash can act as a safety net.

There are some pitfalls to avoid, however. If you think keeping a secret account could lead to the demise of your relationship once your spouse discovers it, perhaps a discussion about it is warranted.

Separate account holders should also be aware that they could be accused of hiding or dissipating marital assets. During a divorce, couples are required to disclose all of their accounts -- even the secret ones -- on a financial affidavit. A spouse may attempt to hide money from attorneys and judges, who use this affidavit to determine alimony and child support. Dissipation of assets entails using a private account to pay for secret vacations, an affair or gifts, which can seriously damage a person's credibility during the divorce proceedings.

It's also important to remember that unless the funds in your private account are separate property -- that is, money that you acquired before the marriage or from an inheritance that is yours alone -- that account may be divided between you and your spouse.

Whether you have separate accounts may depend on your relationship; you don't need to be distrustful of your spouse to have one, but it pays to be aware of the pros and cons.

Source: Forbes, "Pros And Cons Of Keeping A Secret Fund In Case You Divorce," Jeff Landers, Feb. 14, 2013

  • Our firm assists Dallas-area residents with their property division, divorce and other family law issues. To learn more about our practice, visit our Dallas divorce page.

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