How Non-Traditional Marital Finances Affect Your Divorce

How Non-Traditional Marital Finances Affect Your Divorce by Joshua Katz{3:30 minutes to read} Every married couple handles their finances differently. 

In a traditional marriage, you, as a couple, have joint bank accounts, pool your incomes into one account, and pay household bills out of that account. You both know what’s in the bank and whether you are saving or losing money each month. When it comes time for tax season, you file joint tax returns. You know each other’s income, and things are fairly simple when it comes to divorce. 

Marital finances can complicate divorces in a less traditional setup. Certainly in Queens, with a prevalence of different ethnic cultures, marriages are not all the same. Many families share bank accounts with parents or siblings and hold title to real estate with uncles and cousins. The husband and wife may maintain separate bank accounts and make inconsistent contributions from their incomes to the household bills. Many family-owned cash businesses make it difficult for one spouse to know what the other is earning, spending or saving. 

It makes very interesting times when you’re considering divorce and realize: 

  • Your husband has a $50,000 offshore account with his brother that you were not aware of; or
  • Your husband has been paying the mortgage on his father’s Florida house for the past seven years.

How do the courts look at such scenarios? Is it dissipation? Or is it merely the way the spouses elected to handle their finances, and the courts will therefore not allow credits or recoupment into the marital estate? 

Most judges do not permit a spouse to come into their court blindly saying, “Oh, I had no idea.” You have a duty to know what’s happening with the finances when you are married. 

If you sign a joint tax return stating that your husband’s income was $10,000 last year, even though you’re paying a $6,000/month mortgage and driving a new Mercedes-Benz, you may be held to that tax return. Asking for spousal support from a husband who only reports income of $10,000/year could prove difficult in divorce court. 

A recent Court of Appeals case (Johnson v. Chapin) basically says that the divorce court should not second-guess the financial decisions and spending habits made during the marriage. In other words, the judge should not go back several years and look at how you did things to try to establish credit, marital waste, and regular spending. It also says that the court can be bound by sworn statements, such as tax returns or loan applications, in which you indicated your own income. 

When sorting through the finances of a non-traditional marriage, you need an attorney that’s very familiar with recent case law, as well as a judge’s particular slant on how they feel about income and marital spending habits.

Plaine & Katz, LLP
80-02 Kew Gardens Rd.
Suite # 1050
Kew Gardens, NY 11415

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