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Why secret accounts may be problematic

Our last post focused on the benefits of having a secret account or fund to create a clandestine sense of independence, or to pay for life's occasional indulgences. This post will focus on the drawbacks of accounts held without a spouse's knowledge.

Probably the most obvious disadvantage is that secret accounts breach the inherent trust that marriages depend on. Just like physical (and emotional) affairs, a secret account could be seen as financial infidelity.

. It can also lead to questions about what the money is being used for, and (depending on where it came from) why it wasn't used for family expenses. Just imagine how a spouse would react if, in the midst of dire financial straits, he or she finds out about a secret account with enough money to absolve their financial problems. That alone could lead to a divorce.

For those in the midst of a divorce, a spouse with a secret account could be accused of hiding assets. It is not uncommon for a scorned spouse to hide some money out of fear of being ordered to pay more than they are willing to do so. While the consequences of concealing assets usually keep spouses from doing so, there is nothing more damaging during a divorce than being accused of sequestering money. Not only does it increase the rancor between the parties, it makes the process that much more expensive due to forensic accounting and motions surrounding alleged accounting mistakes.

Most importantly, spouses run the risk of improperly funding such accounts, which could dramatically change the way assets are distributed in the final analysis.

Source: Forbes.com, Pros and cons of keeping secret accounts, February 14, 2013

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