A friend of mine is going through a divorce. Yesterday her lawyer discovered that friend’s husband has seven different secret bank accounts that she knew nothing about, the smallest about $4000 and the largest about $35K (!) Also, two of them are in her name (and now she’s also worried about the ramifications of that!) What normally happens in a case like this? Do they split the money? Does she get to keep the accounts in her name?
Just curious…
There’s no simple answer. If the accounts are in her name and her SSN, then technically they are hers, but that may not make any difference depending on how the judge accepts the husband’s explanation for them. Any divorce settlement will take into account all bank accounts and specify as to who gets the money.
Could there not be variations from state to state? I’ve spent much of my adult life in Utah and Nevada. The two states would have treated them differently just a few years ago. I don’t know about the current situation.
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samclem, moderator
Part of settlement/division of assets is to disclose all assets.
Are you saying he hid these from the court (Not good)
Or did he tell the court about them, thus disclosing them to his soon-to-be-ex.
If he’s had these floating around for a while, then either he did her tax returns and included the information about “her” accounts, or he didn’t and she should contact the IRS about incorrect information. (I assume they earned some interest).
If they are disclosed to the court, then they will be divided like any other assets.
If he secretly siphoned money out of the communal property, then her lawyer should be able to make hay out of this. (Perhaps she should get a bigger share).
If he hid these from divorce court, then the judge should have something to say about it. Talk to a lawyer. At least, can’t these accounts be frozen until the disposition is sorted out?
Yes, there are variations according to the state’s “community property laws”. In many states, all assets held by either party in a marriage are considered “community property”, equally and jointly held, There are usually exceptions to assets that are inherited by one spouse, which fall outside community property, until and unless they are folded into a joint property, such as buying a house or deposited into a joint bank account.
I don’t know the rules in your state, but in California it is very hard to open a bank account, and almost impossible to do it for someone else. She might want to wander down to the bank and ask for a copy of the application. Did she sign for it without thinking, or did he forge her signature? Also, if there was interest, where did it get reported?
Generally, during divorce the parties are required to declare all assets to the court, who can decide if they are communal. The lawyers can argue why they should or should not be. Hiding assets is a “very bad thing”.
Yes, NV is community property and UT is separate property. Generally the more Spanish/French states are community, except for some weirdos like Wisconsin. The dumbed down explanation is that they will add up assets and /2, but UT is more likely to consider property from before the marriage as owned by one person. Allow for thousands of subtleties.
Maybe they were opened a long time ago, when the SSN wasn’t used as much?
That would have been long, long, long ago. I needed one when I opened my school passbook account in the late 1950s.
I’ll rephrase: when SSNs perhaps weren’t enforced as much. Or they needed SSNs, but didn’t do as much diligent checking. I am told that not too terribly long ago it was easier to claim fake dependents on your tax return, no idea how similar this is. When I worked in a bank, I would occasionally have “legacy” customers who had incomplete information in the computer.
You just reminded me that when I was in college we decided we would get our hall lounge admitted to MIT. We never did it, but I did get the lounge a social security number. But that was a pretty long time ago also. And I did say California - I don’t remember New Jersey being nearly so anal about bank accounts when I lived there.