When divorce is on the horizon, many California spouses feel a string need to prepare. This can take a number of forms, from preparing one’s friends and family for the news to setting aside money to get through the divorce period. In some cases, one or both spouses will work to set up and fund a ‘secret’ or ‘hidden’ divorce account.

This is not a bad idea, especially in cases in which one has reason to believe that their spouse will not react well to the news that the marriage is ending. It is entirely possible for one embittered spouse to limit or halt the other’s access to shared accounts or other funding sources. This can leave one spouse with no means of paying for living expenses or legal needs at the onset of the divorce process.

However, when funding the account it is imperative to ensure that the money comes from separately owned assets and not from marital property. Such assets can include an inheritance or property owned prior to the marriage. It is also permissible to sell personal property such as jewelry or other valuable items to set aside savings.

If a hidden account is discovered, and was funded by means of marital property, the issue could lead to significant trouble in court. Intentionally dissipating marital assets is a serious offense, and being found to have done so will not lead a judge to have faith in one’s truthfulness in other divorce matters. If there is any doubt as to the nature of assets used to fund this type of account, the best course of action is to ensure that one’s choices are in line with California law.

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