Your Money
Mandi Woodruff | Dec. 14, 2011, 12:31 PM |
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Fewer Americans are choosing to walk down the aisle than ever
before, and with half of all marriages in the U.S. statistically doomed
to fail [Note: that's not even counting unmarried partners] it's easy to
wonder why.
Despite what tabloids would like you to think, not all problems start in
the bedroom.
Financial infidelity is the root cause of many crumbling unions,
says family law attorney Steven Mindel.
"More marriages fall apart for financial reasons than for fidelity
reasons," Mindel says.
"Fundamentally, marriages are built on trust and anytime you breach the trust of the other party, it damages the
relationship. Getting married is like the merging of two enterprises."
Sure, thinking about your beloved like one half of a corporate finance transaction sort of takes the romance out of
"Happily Ever After," but being upfront about finances before waltzing down the aisle is a crucial first step.
W ith Mindel's help and a host of other family law and finance experts, we've rounded up a list of some of the most
damaging money lies spouses can tell.
"Rich aunt. What rich aunt?"
The truth: "The old bat left me $5 million in a trust fund – and the deed to her mansion."
Mindel says hiding details of an inheritance or trust fund is one of
the most common lies he's seen in clients.
It's not a wise move, especially since it's easy enough for a
partner to find out if they pay attention to your tax returns, Mindel
points out.
Unless you also plan on also lying to the IRS about the trust
fund, you'll have to report your monthly checks with the rest of
your taxable income.
Image: AP
"I never play the lottery."
The truth: "I just won the $300 million jackpot and I'm about to leave you, sucker."
A California woman made headlines when her ex-husband sued her over lottery winnings she hid from him while they
were still married. Years later, he took her to court and wound up walking away with 100 percent of her earnings.
A
"Now, more and more states across the country are imposing
penalties for spouses that fail to properly disclose financial
information to their spouses," Mindel says.
Image: johncarelton
"What's mine is yours."
The truth: "I've got a bank account on the side—just in case."
If you've got money that’s off the books, such as cash you're
earning from a freelance or part-time job, it's not OK to stash it in
a secret account your partner doesn't know about.
"People get pissed when they find statements about hidden
accounts," says family law attorney Jennifer Deniger.
"A lot of married couples don't understand the concept of joint
property and they think that if they get divorced, then anything
they have in a solo account is theirs to keep. But the joke is on
them because the (spouse) still gets half."
Soulja Boy
"I'm still working 9 to 5."
The truth: "I was just laid off—without severance."
Lying about job loss often occurs because spouses are either
ashamed of their failure or are convinced they'll be able to nab a
new gig before their partner notices.
"We don't see it very often but you hear about people that are
shocked to hear that their spouse has been covering up a job
loss," Mindel says. "They leave early to go to work but don't have
a job to go to."
Image: Flickr/MTAPhotos
"I want us to be equals."
The truth: "I'm a controlling jerk and don't want you anywhere near our money."
When former Air Force engineer Steve Boothe was the main breadwinner in his family, his wife sometimes felt
trapped.
"I wouldn't recommend one income cause it was very easy to see
how easily power struggles or control issues could develop," he
says.
Having one person in charge of the finances is just asking for
trouble, says Jeanine Earnhart, author of Marriage Works.
"Basic spending and budgets should be a shared responsibility,"
she says.
"Oh, this old thing? I've had it for ages."
The truth: "I just ripped the tags off and burned the receipt."
Oftentimes, one partner or both will hide purchases rather than
risk having an argument.
"(My husband and I) actually know a woman who buys clothes
(and) hides them under her bed for a few months," Earnhart
says. "When her husband notices a new outfit and asks if that is
"new", she feels she can honestly say "No, this is an outfit I've
had a long time."
Image: The Internet Movie Database
"I kicked my coke habit back in the 80s"
The truth: "I'm blowing thousands per month on my drug addiction."
As families deal with job loss, credit debt and other financial
strains, millions of Americans with histories of drug addictions are
in danger of picking back up the habit.
"Every argument, financial struggle and social agitation can seem
like a catastrophe to those whose attention is completely
distracted by their drug and alcohol use," according to
Addictionwatch.com.
"When you add to this misery a nation in peril from ... lost jobs,
home foreclosures, (and) poverty bound families ... you wind up
completely collapsing an individual who would have previously
Image: flickr.com
been able to hand on."
"I'm not a gambling man."
The truth: "I hit the slots every weekend."
Mindel says any vice that sucks up disposable income —like frequent casino trips or betting at the race track — is a
danger to marriage.
"We've had women (clients) who've been addicted to male
strippers and spent all their money on clubs," he says. "They end
up putting financial pressure on their families because of their
addiction."
Image: Ashley Dinges
"I'm debt-free, baby."
The truth: "I'm drowning in credit and student loan payments. HELP ME."
Partners often hide credit card statements or past debt from their
spouse, telling themselves that they'll be able to pay off their debt
before it balloons.
"I find that most people have no idea how much their partners
have in student loan debt, so that can be iffy when the payments
need to come out of your joint income," Deniger says.
Before you tie the knot, sit down and exchange a credit history
with your partner, Mindel recommends. That way, you're both on
equal footing.
Image: misshedwig* on flickr
If you're uncomfortable coming clean about your debt, you're
probably better off putting off marriage altogether.
"You know exactly what I'm making."
The truth: "I just got a big fat raise and haven't told you."
Couples should treat marriage like a business merger, Mindel
says, especially if you're planning on drawing up a prenuptial
agreement.
"You've got to know the value of both companies," he says.
Plus, if you ever get divorced, a court can penalize you for not
disclosing your full income and award your ex more spousal
support.
Image: AP
"I don't really want kids."
The truth: "That's because I'm already paying child support for kids from a previous marriage."
If you've got kids you're not telling your spouse about, you could end up in court or worse — JAIL, says Money Talk
Matters CEO Taffy Wagner.
"I know of a situation where a husband did not tell a wife that he had
previous children and was not paying child support," Wagner says.
"The (new) wife ended up being sued because they had a joint
account."
"I bank only in the U.S."
The truth: "I've got millions in offshore bank accounts."
Hiding offshore accounts is a common lie among international
couples.
"Foreigners that come to the U.S. but have money offsore fail to
tell their spouse," Mindel says.
If you're keeping the accounts open for shady reasons, like
securities fraud or tax shelters, you'll drag your spouse down with
you if you're arrested and forced to turn over your assets.
"I'm paying the mortgage on time every month."
The truth: "Our home is days away from foreclosure."
Andrew Scharge, founder of Money Crashers, says this is an
especially easy lie for a stay-at-home spouse, who can cover up
bill collector mail and phone calls.
"The difficult result is the loss of their home, which will come as a
shocking surprise to the spouse who was unaware of their
financial situation," he says.
"It can be a challenge to deal with a lying spouse, but ultimately,
if the couple does not deal head-on with these issues of trust by
implementing some money management tips for married couples,
the couple will very likely separate or divorce."
"I have no idea where all those Amazon boxes came from."
The truth: "I've got an online shopping addiction."
Compulsive spending habits can wreck a marriage, especially if they're kept under cover. Some partners go as far as
to send shipments to friends' houses or the office as a cover-up.
"Compulsive spenders lie about the amount of money they spend, how often they spend money and what they spend
money on," says Paul Hokemeyer, a licensed marriage and family therapist.
"It destroys relationships because the non spending partner
typically has no clue over the extent of the spending that's going
on and wakes up to a bankruptcy or unmanageable debt that in
turns makes them feel betrayed, taken advantage of and
humiliated."
Image: AP
Face it, not all marriages will survive...
See how one man found 101 ways to reuse his ex-wife's wedding
dress >
Image: Kevin Cotter
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