top of page

Financial Infidelity: What It Is And How To Protect Yourself

Updated: May 21, 2020

Financial infidelity is as serious as it is common.

What is financial infidelity?

Financial infidelity occurs when couples with combined finances lie to each other about money. It can include hiding debt, purchases, or financial accounts from a partner. It can also include making secret financial transactions in opposition to the couple's financial planning strategies and goals. It can include lying about income or siphoning off marital income while claiming financial distress. Bottom line: financial infidelity is about secrecy or dishonesty - monetary activity that partners hide from each other.

How common is financial infidelity?

It's quite common. Among couples who have combined finances, more than 40% of those surveyed admitted to hiding cash or bills or purchases, or lying about earnings and debt, according to 2018 survey data from the National Endowment for Financial Education (NEFE). The survey also found that 75% of adults say financial deceit has affected their relationships in some way.

Does financial infidelity lead to divorce?

Research from Kansas State University shows that financial disagreements are stronger predictors of divorce relative to other common marital disagreements. It goes without saying that financial infidelity destroys trust and puts the financial future of both parties in jeopardy.

Financial infidelity also commonly increases in the months immediately preceding separation and divorce.

Importantly, financial infidelity can significantly impact divorce proceedings. In California, the relationship of husband and wife imposes the highest duty in the law – that of a fiduciary. Spouses are held to the highest duty of good faith and fair dealing and neither is permitted to take unfair advantage of the other.

In light of all of this information, how can you protect yourself from financial infidelity? Scroll for tips.

Use your resources to learn financial basics

In many marriages, it's common for one spouse to do the majority of financial planning and management. If this is true of your marriage, it can be extremely overwhelming to feel like you basically need a finance degree clean up the mess that your spouse has created. Take a deep breath. There are so many great articles and books to help you understand financial basics. If your finances are complex, enlist the help of an experienced accountant, attorney, and/or financial adviser.

Access accounts and assess your situation

Make sure you have access, including online access, to joint accounts. Gather statements as far back as you can and monitor the accounts moving forward. If you need help gaining access, call the financial institutions where they're held. Look out for unusual transfers, payments that do not look familiar to you, and attempts to change passwords. Report any unusual activity.

Make sure to check your mail regularly. In one case, a client discovered serious financial infidelity when the license plates for a brand new luxury vehicle were mailed to the family residence - a purchase made unbeknownst to the client.

Other important steps can include:

- Running a credit report to see if any unusual accounts come up.

- Checking all beneficiary designations on financial accounts.

- Checking that all insurances are paid and current.

- Checking that all credit and loan accounts are paid and current.

- Learn the cost of running your household by tallying family expenses like car payments, mortgage payments, groceries, maintenance, etc.

Be aware of common red flags

There are common red flags indicative of financial infidelity. Keep an eye out for the following:

- Is your spouse obsessive about getting the mail, insisting on reviewing it before anyone else can see it?

- Does your spouse exhibit discomfort or anger if you try to access financial information?

- Is your spouse suddenly worried about financial hardship, seemingly without reason?

- Have you found statements from financial institutions that you do not usually use?

- Have you found statements for financial accounts or credit cards that you know nothing about?

- Have you been removed from a joint account?

- Have you caught your spouse in a lie about an expense or purchase?

Consider hiring an attorney

If you're concerned about financial infidelity, consider consulting with a divorce attorney. You may not be sure if you're ready for divorce or if you still want to work on the relationship - and that's okay - but arm yourself with knowledge and empowerment. Financial infidelity can cause long term damage to your financial future and can have significant ramifications in a divorce. With the right guidance, you can take steps to protect yourself.


The Law Office of Emily E. Rubenstein is a full service divorce and family law firm. We proudly serve Beverly Hills, West Hollywood, West Los Angeles, Santa Monica, Culver City, the South Bay, Glendale, Pasadena, Sherman Oaks, Studio City, Encino and all of Los Angeles County.

Give us a call or check out our website:

87 views0 comments
bottom of page