Family Matters

Understanding Finances During Divorce: What to Know and What to Watch For

One of the biggest concerns when a couple separates is how money and property will be divided. In many marriages, one spouse takes the lead in managing the household finances. This may include paying bills, handling bank accounts, filing taxes, managing investments, or overseeing business income. When a marriage ends, however, it is common for questions and disputes to arise about how much money exists, where the funds are located, and how marital assets were used during the marriage.

Once a divorce begins, each party is generally required to fully disclose their financial circumstances to the other spouse, unless that right is waived.

Financial disclosure typically includes income, bank and investment accounts, retirement assets, real estate, debts, and other property interests. Full transparency is essential so that marital assets can be fairly identified and divided.

Unfortunately, trust between spouses often breaks down before a divorce is filed. As a result, one spouse may be skeptical of the financial information being provided, especially when the other spouse handled most or all of the finances during the marriage. The spouse who was less involved financially may want reassurance that all accounts, assets, and income sources have been properly disclosed. Common financial red flags in divorce cases include missing bank accounts, large or unexplained withdrawals or transfers, sudden increases in debt, or unusually high cash spending. These issues may suggest that marital funds were improperly spent, hidden, or moved to another account.

There are several ways to obtain financial information in a divorce matter. The most common and formal method is the discovery process, which may include requests for documents, interrogatories, subpoenas, or sworn financial disclosures. Through discovery, parties can obtain important records such as bank statements, credit card statements, business records, loan applications, and investment account information. While discovery is an important tool, it should be focused and strategic. Broad “fishing expeditions” often drive up legal fees without producing helpful results. Instead, financial requests should be tailored to identify specific concerns or potential gaps in the disclosure.

Once financial documents are exchanged, careful review is critical. Reviewing statements and records can be time‑consuming, but it is often necessary to confirm that all assets have been disclosed and that marital funds were not improperly spent or transferred. In more complex cases, particularly those involving businesses, multiple properties, or substantial assets, a forensic accountant or financial expert may be brought in. These professionals can trace funds, analyze income, value businesses, and evaluate whether marital assets were dissipated. If it is discovered that one spouse improperly spent marital funds, several remedies may be available. The affected spouse may seek a credit or adjustment in the division of assets. In certain situations, a party may also ask the court to freeze accounts or restrain further transfers to prevent ongoing misuse of marital funds while the divorce is pending.

When someone is considering separation or divorce, it is critical to review financial information early and take prompt action if concerns arise. Early investigation can help preserve assets, prevent dissipation, and ensure a more informed and fair resolution.

If you believe your spouse is concealing funds or improperly spending marital assets, a conversation with one of Obermayer’s family law attorneys can help you navigate the process.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.