Financial Infidelity during marriage and on separation
Financial matters can be a significant strain on relationships and is often referred to as a contributing factor to separation. Keeping secrets about assets and spending/debt can be very damaging to a couple’s trust during a relationship and deeply distressing, if discovered by the other person on separation.
Examples of financial infidelity can include one spouse using shared resources, without their spouse’s knowledge or consent, often acting irresponsibly or for their own benefit rather than for the benefit of the family. The secretive element of this financial misuse, is often the most damaging element.
- What can you do about financial infidelity during your relationship?
On a practical basis, the only way to deal with financial infidelity is to insist upon transparency with your spouse. Have regular discussions about finances, share information, make joint plans for future spending and if necessary, seek expert financial advice for future wealth management and planning, or contact the Citizens Advice Bureau for help in dealing with debt.
- What can you do if you find out about financial infidelity, after separation?
On separation we would strongly recommend that you seek independent advice from a Family Law specialist, as soon as possible, so that you can be aware of all of the options available to you. You should raise your concerns about financial infidelity with your solicitor. The starting point when looking at the division of matrimonial assets and liabilities, upon separation, is that the net value of the parties’ collective matrimonial property ought to be shared fairly between you. The assumption is that fair sharing means equal sharing. This means that in the first instance, the starting point may be that you require to share equally in any matrimonial debt, incurred by your spouse during the marriage.
However, if asked to consider financial division, a Court shall take account of various factors when dividing matrimonial property, including any special circumstances and the parties’ financial conduct. An individual’s conduct before or after separation could be considered by the Court, if relevant. Considering special circumstances is a matter for a Sheriff’s discretion and the Sheriff also requires to consider any destruction, dissipation, or alienation of property by either spouse. Case law suggests that excessive spending, grossly out of proportion to the resources available, or monies lost by gambling, might be an example of “dissipation”. So, a court will consider a party’s financial infidelity, if it would be unfair not to take that behaviour into account when determining how to fairly divide the matrimonial property.
If the financial infidelity in your marriage has been in the form of hiding assets, liabilities or financial transactions, it is possible on separation to seek disclosure by way of court order. This formal request is known as a Specification of Documents. The documents sought must be relevant to the case and the party seeking them must justify why it is necessary for the documents to be disclosed. If a Specification of Documents is ordered by the court, there is then a formal process for disclosure to take place voluntarily or failing which, a hearing known as a Commission is assigned. A person known as a Commissioner chairs the hearing. The purpose of the Commission hearing is to ascertain what steps have been taken to locate and disclose the documents sought. Following the Commission a report is prepared by the Commissioner and returned to the court.
Every case will turn on its own individual circumstances. If you are in any doubt as to your own rights, you should seek immediate independent legal advice.
Contact Jenna Thomson on 01463 239393 or jenna.thomson@macandmac.co.uk.