When preparing to file for divorce, many Connecticut spouses feel the need to set aside funding in case the process becomes contentious or lengthy. The impulse to prepare is not only understandable, but is also a savvy financial move. However, the manner in which one funds a ‘hidden’ divorce fund is very important, as the ramifications for making a poor decision can be severe.
When funding ones escape fund, car should be taken to use assets that are separate from family assets. These can include the proceeds from the sale of personal property, such as jewelry or other valuable items. Funding can also come from an inheritance or from assets acquired before the marriage.
In determining how much to set aside, each set of circumstances are unique. In some cases it is obvious that the divorce will be contentious, and it is important to save as much as possible to offset financial hardship that could result if the other spouse were to limit one’s access to shared accounts or other assets. In other cases, setting aside enough to cover a few months of living expenses and the cost of legal needs may be sufficient.
When setting up and funding this type of account, care should be taken that this preventative measure does not come back to haunt you in court. Accusations of intentionally dissipating marital assets are serious, and can lead to a lengthy and expensive legal battle. Setting aside savings to weather a divorce is a solid financial move, but one that should be made with a comprehensive understanding of Connecticut property division law and practices.
Source: Forbes, “Pros And Cons Of Keeping A Secret Fund In Case You Divorce,” Jeff Landers, Feb. 14, 2013