What happens when you’re not truthful about your finances?

Financial infidelity is a serious problem in relationships and can end up leading to divorce. Then, during a divorce, that infidelity may lead to issues as debts or assets that weren’t known about finally come to light.

By definition, financial infidelity occurs when couples who share their finances lie about money. This could include:

• Hiding debts from their spouse
• Spending excessively without talking to the other partner first
• Lying about the use of money
• Hiding money or income from the other spouse

Financial infidelity can cause problems during a marriage if it’s discovered, as one person may feel hurt or disrespected. During a divorce, this infidelity could lead to difficult conversations about who should be responsible for repaying debts or if certain hidden assets should become shared assets and be split.

What’s the best way to come clean about financial infidelity?

Usually, the worst-case scenario is one in which a spouse doesn’t tell their partner about their debts or assets and the other partner finds out on their own. This can lead to issues with trust. The better way to handle this kind of situation is to be reasonable about the situation. Sit down and talk to your spouse about additional assets or debts that you have and that they don’t know about. They may be unhappy, but they may not be as upset or hurt as if they had found out on their own.

What if you find out about financial infidelity during divorce?

Financial infidelity can be problematic during a divorce, especially because California views property as shared community property. That means that by law, you’re technically expected to equally split all shared assets and debts upon divorce. That may not be reasonable in this kind of situation, so you may want to talk to your spouse about negotiating a different arrangement, such as setting aside certain debts as their own rather than asking you to cover them.

You have options if financial infidelity comes to light. The right approach could help you resolve those debts and give you a better opportunity to get the assets you need out of your marriage.