An increasing number of couples cite money issues as a key factor in their separation. But “money issues” can often mean something more specific: financial infidelity.
This is when one partner hides assets, racks up secret debts, or makes major financial decisions without the other’s knowledge. It cannot only destroy trust but can also seriously endanger the financial security of both parties for years to come.
Kerry Russell, an Associate in our Family Law team, explains the tell-tale signs to be aware of and clarifies when you need to act to protect your financial future.
Red Flag #1: Sudden, Unexplained Spending Sprees
The Sign: Have they been hitting the designer stores, going on lavish solo holidays, or making unusual, large cash withdrawals? You may notice unknown transactions on joint bank accounts or credit card statements.
The Legal Risk: When you are contemplating a separation, the court expects both parties to act responsibly. If one partner deliberately and recklessly “dissipates” (wastes or spends) matrimonial assets to put them out of the other’s reach, a Family Court can take this into account.
This is known as “reckless or wanton expenditure.” The court could potentially “add back” the wasted money into the total pot when calculating a fair settlement. However, this is a high bar to meet.
What to Do: The first step is to try and communicate calmly. If you’re contemplating a divorce, you should consult a solicitor at the earliest opportunity. We can advise you on the best way to protect the assets you have now before they can be spent.
Red Flag #2: Hidden Debts & Secret Credit Cards
The Sign: You discover the existence of a credit card, loan, or overdraft in your partner’s name that you knew nothing about, often with a significant balance.
The Legal Risk: This is one of the most common and dangerous forms of financial infidelity.
- Sole Debt: A debt in your partner’s sole name legally remains their responsibility. The Family Court has no power to transfer a credit card bill to you.
- “Matrimonial Debt”: However, if that debt was built up to pay for family expenses (e.g., holidays, school fees, or just covering monthly bills), the borrower can argue it’s a “matrimonial debt.” This means it was for the family’s benefit and should be paid off from the family’s assets (like the proceeds from selling the home) before the “profit” is split.
This can have a huge financial impact on your final settlement, even if the debt isn’t in your name.
Red Flag #3: Suddenly Wanting to Change Joint Accounts
The Sign: Your partner becomes defensive about joint finances, asks to move their salary to their sole account, or suggests you “simplify” your finances by separating accounts you’ve shared for years.
The Legal Risk: This is often a prelude to moving money out of reach. While it’s sensible to have your own income paid into a sole account, a sudden change in a long-standing arrangement is a major red flag.
What to Do: You may wish to ensure your own salary is paid into an account in your sole name to protect your day-to-day living funds. As a last resort, you can freeze a joint account, but you should seek legal advice first. Freezing an account can have serious consequences, especially if it’s used for mortgage payments or household direct debits.
Red Flag #4: Draining Joint Savings
The Sign: You check a joint savings account or ISA and find the balance is much lower than you expected, or has been emptied entirely.
The Legal Risk: This is a clear-cut “dissipation” of assets. The money in a joint savings account is legally owned by both of you.
What to Do: If this has happened, it is vital to download the statements showing the withdrawals and seek legal advice immediately. While the court can “add back” this money in a final settlement, it’s far better to prevent the money from being spent in the first place.
This is also why it is sensible to have your own separate “rainy day” fund, especially in the current economic climate, to ensure you are not left financially vulnerable.
Red Flag #5: Secrecy Around Pensions
The Sign: Your partner becomes vague about their pension, or you discover they have stopped contributing to a long-term plan.
The Legal Risk: For many married couples, the pensions are the most valuable assets, often worth more than the family home. Some partners will deliberately try to mislead their spouse about the true value of their pension pot, hoping it will be overlooked.
In a divorce, you may have significant rights to your spouse’s pensions, even if you have your own. Expert advice can determine if there is a disparity and how it can be bridged—for example, with a Pension Sharing Order or by you receiving a larger share of other assets (like the house) to offset your pension claim.
How to Protect Yourself: Your First Steps
If any of these signs are familiar, it is crucial not to panic. Instead, take practical steps to get clarity.
- Gather Information: Discreetly make copies of any financial documents you have access to. This includes joint bank/credit card statements, your partner’s pension statements, mortgage information, and any loan agreements.
- Secure Your Own Finances: Open a new bank account in your sole name at a different bank. Have your salary paid into this account to cover your own expenses.
- Seek Early Legal Advice: The sooner you speak to a solicitor, the better. We can give you a clear and confidential overview of your rights and help you form a strategy to protect your financial position before your situation gets worse.
If you have any concerns about your finances or require advice on separation or divorce, please contact a member of our specialist team.
You can contact Kerry Russell, Associate Family Solicitor, by calling 0161 930 5151 or emailing kerry.russell@gorvins.com.