As a happily married woman of 13 years, I have written a few posts on how my husband and I have achieved our “good” partnership. But something happened to an acquaintance of mine that got me thinking about divorce. She had been having a lot of problems with her husband and after much consideration they decided to separate with the intention of getting a divorce. It is an age old story, and one you might have gone through already. But this is where things got ugly.The husband pulled all the cash from their joint account and left his wife, who was a stay at home mother, with no money to live! She had no credit card in her name, and no separate account with any money in it. She was left totally penniless and without a paycheck to support either her or her children!
I was completely shocked and called my good friend who is a divorce lawyer, asking her what my other friend’s options were. She replied that in the state of California, there is really nothing legally the woman could do! Until they officially filed for divorce, the man didn’t have to legally give her one penny! And without any way to pay a retainer to a lawyer, my friend couldn’t hire anyone to represent her! I could not believe that a woman who had been living a good middle to upper middle class life was instantly rendered essentially homeless. She had a home, and a car, but no cash whatsoever. I shuddered at the thought that this could happen to me. So I sat down with my friend, attorney Shelley Heimanson Newman, to try to figure out how to help other women protect themselves from this happening to them.
Before I begin, I would like to say that both Shelley and I live in California, so the laws could be very different in your state. Please, if you are even thinking about getting a divorce, talk to a lawyer in your state to find out what your rights are.
To begin, it is incredibly important to know exactly what and where your financial records are. How much money do you have in the bank? Is the account in both of your names? What do you pay in taxes? Where are your retirement accounts? How much is in them? Is the title of your home in your and your husband’s name? Or only his? All of these questions must be known by you or at the very least you must have easy access at finding out the answer. Information is control and if you have no knowledge of your financial assets, you are giving up part of your control, which in turn makes you very vulnerable.
As I mentioned in the opening paragraph, in a joint account both parties have easy access to the cash. It is possible that at any time one partner could just take all the money out and leave the other with nothing. But there are a few ways to protect yourself from this. First of all, I think it is imperative that both partners have their own personal account with only their name on it. This gives both people a feeling of power that if something horrible happens, they would at least have a little cash to cover any issues. Suze Orman, a personal finance guru, once wrote that the best way to keep money as a couple was to have each paycheck split into percentages. So if you both work, then 70% of each paycheck goes into a joint account and 30% goes into a personal account. Of course you can fudge the percentages as needed, that 70/30 number is just an example. I like this idea because it keeps things fair and equal and gives both members the security of knowing they each have some privacy in their monetary relationship.
But what if it is a single paycheck household? If this is the case, then I think the paycheck should be split something like 70% for the joint checking account, and then 15% each to the individual accounts. And the individual accounts are basically a “just in case” fund. This isn’t a “nails and jewelry” fund. Those should be coming out of the joint account. This is essentially a savings account to keep both parties financially equal. Just as knowledge is power, so too is cold hard cash. Just because a person has chosen to stay at home and not receive a paycheck doesn’t mean the salary of the person who works outside the home is only theirs. It is both of their money equally because both are working together to raise a family.
Another way to protect yourself from the other person spending all of the money is to have a limit put on the account where both parties have to give permission to remove over that set amount. This way one partner can’t take a large amount at one time without the other partner knowing and agreeing to it. And finally, please, make sure you have at least one credit card in your name. Even if you freeze it in a block of ice to keep from using it, you really need to have one as insurance, just in case.
Even if you have a wonderful marriage, you really should know everything about your finances. I know it can be a very tedious and boring subject, but it is so important to understand exactly where your money comes from and where it is going to. By having a joint account and two separate individual accounts, each person in a relationship has equal monetary power and control over their financial futures. This keeps the dynamic between partners equal and one wont be able to hold money over the other as a power play. And even if you trust your husband implicitly, it is still paramount that you protect yourself from even the possibility of ending up without any monetary resources at your disposal. If your husband truly loves you he will understand your feelings and do whatever he can to help you both maintain an equilibrium in your marriage, your finances, and your future.