It is typical to immediately think of affairs of the heart as the primary reason why marriages end in divorce. Considering the publicity certain high profile couples face when one spouse strays, it is hard to consider that the demise of a marriage may not be caused by emotional or physical infidelity.
Enter the recent admission by famed attorney for Donald Trump, Michael Cohen, before the House Oversight Committee when asked why he used a home equity line of payment to pay an attorney representing Stormy Daniels to hide Ms. Daniels’ affair with the soon-to-be president: “The reason I used the home-equity line of credit as opposed to cash that I had in the exact bank was that I didn’t want my wife to know about it. She handles all of the banking. And I didn’t want her coming to me and asking, “What’s the $130,000 for?” And here we have it: financial infidelity.
What may, in most cases, seem like an innocuous attempt to maintain independence in a relationship by deciding how and when money should be spent, the line wavers. In Mr. Cohen’s case, the intent was clear; hide the transfer of funds from his wife to ensure the transaction goes untraced and therefore unquestioned. However, is it always “bad” for one of a duo to spend money without discussing the matter first with his or her partner?
So here is where the quandary lies: is it better to maintain financial independence or micromanage each other’s spending habits? Can there be a happy medium? Considering that individuals are marrying later in life, which invariably means those individuals come to a marriage with careers, assets and income, the following may offer ways to strike that middle ground and keep marriages intact.
Enter Into a Prenuptial or Post-Nuptial Agreement: Entered into either before or after the marriage, these contracts not only protect parties’ assets and income earned prior to the divorce and alter parties’ rights under a state’s divorce laws, they can even dictate how resources are spent during the marriage. While considered largely “unromantic,” prenuptial and post-nuptial agreements can offer peace of mind as couples can have a meeting of the minds as to how marital income (income earned during the marriage) should be spent, thus eliminating surprise down the road.
If Maintaining Separate Accounts, Still Be Transparent: Not all couples need to maintain joint accounts. Provided parties have established clear goals for saving, meeting regular expenses and having honest conversations about the “big” purchases,” financial independence can still be achieved. Create a budget for the “must pay” items, aim to contribute to savings on a month basis and then give leeway to each other to use what’s left at his or her discretion.
However, Pay Attention: Be your own advocate. There is traditionally one spouse or partner who knows less about the couple’s financial situation than the other. Being trusting of another’s spending habits does not mean that a party should not be aware or part of all financial decisions made for the household. Attend meetings with financial advisors, read account statements and other financial documents, and ask questions, either of a spouse or a professional. Indeed, the more information you have, the more empowered you are and the stronger a marriage will be.
Kathryn Homburger Mickelson, Divorce and Family Law Partner