Hiding Assets and Spending Separate Property Are Some Common Divorce Financial Mistakes
Video Transcribed: What are the most common financial mistakes made during a divorce? I’m James Wirth, a lawyer in Tulsa, Oklahoma. That’s the question that we have here. It took a few minutes to think about that, and I’ve got some things to consider as far as the financial mistakes that we’ve seen people make in their cases and try to avoid them.
So first off, number one, hiding assets. There is a certain discovery that you’re allowed to do in divorce processes, just like typical civil litigation. You send out a discovery request. You can send out subpoenas. So you can do requests for production, interrogatories, request for admissions, where you’re getting the information from the other side under oath, where you’re requesting bank account statements, where you’re asking them questions under oath written. Or you can do depositions and do it that way.
So you can get locked into your answers, and if you don’t provide truthful information, they can subpoena the bank institutes. They can subpoena your employer, whatever third parties they need to, to get that information independent.
If they find out that you’re lying and trying to hide assets, then that also is going to look bad to you to the judge, making it less likely you’re going to have any credibility for other determinations before that judge. And also if you’re responding to those in discovery requests, that’s going to be under oath, which could be potentially perjury, which has up to a five-year sentence and is a felony if convicted in the state of Oklahoma. So that’s the first one is hiding assets is problematic.
Number two, spending separate property. Okay, so when you are getting ready to start a divorce process, you want to think strategically about the money that you spend and that you don’t spend. Certain assets are going to be considered to be marital assets. Certain assets are going to be separate assets that you’ve kept separate, and you had before the marriage. So if you’re looking at, “Where do I come up with funds to pay an attorney to get this started?” Or during the process, you’re going to want to think about what funds you want to use. So you’re not going to want to use your separate funds. You’re going to want to use marital funds from maybe a joint bank account, something like that when you pay your retainer.
So you want to think strategically about that. So using separate property where it would be property as marital property, is not always proper to do so. Once a divorce is filed and the summons is served, an automatic temporary injunction goes into place. Everything needs to be done under the normal course of business. So you do want to consult with a lawyer in determining what you can and cannot do. But I’ve seen a lot of cases where there was protected money that was used when it could have been money that would’ve been split as marital funds. So you want to consider those things.
The next one is commingling assets, just like we talked about in number two. For number three here in commingling assets, we want to look at, what is separate property. What is marital property? Assets that are separate property, you want to keep their separate property, and that means you want to avoid commingling them before the divorce petition is filed, but also while the divorce is pending.
So if you’ve got properties that you owned before the marriage, do not commingle it. Do not put marital funds in there. Do not put your spouse’s name on it. Do not mix it with anything that is marital. You want to be careful about that. So that’s a big financial mistake we see in commingling assets. The last one we see is making big purchases. So if you have a divorce case pending, you are still married. So new property that you’re acquiring is technically marital property.
It’s going to be subject to division when the divorce case is done. So you generally don’t want to make big purchases like buying a new boat, buying real estate, buying a car, because that’s going to be marital property that technically could be awarded by the court to your spouse, even though you bought it while the divorce was still pending. It would be highly unlikely for the court to do that. But why complicate things?
Also, if you’re getting loans during that period, you’re still married, that’s not going to be great for having documents signed off on and worrying about liens and having co-buyers on that. You want to avoid all of that. Do that if you can put off any of those significant expenses until the divorce decree is done.
So as far as the financial mistakes we see during a marriage, the ones you want to avoid: hiding assets, spending separate property when you could spend marital property, where it’d be allowable to do so, and commingling assets that cause separate property to become marital property and making purchases while the divorce is still pending.
Those are the ones you want to try to avoid, but there could be other specific ones in your circumstances. You want to talk to a Tulsa divorce attorney about that privately and confidentially to get legal advice. If you want to schedule that with somebody at my office, you can go online to makelaweasy.com.
