Hi Everyone.

Somewhat recently I discovered that my FWW has made several of her accounts joint with immediate relatives (e.g. one made joint with her mum, another with her dad, etc.). They all contain funds that were primarily collected during our M. Her reasoning for doing so was to ensure that the funds remain available if anything happens to her. At one time I would have trusted her response without question. Now, after being subjected to what she's truly capable of, I'm not so naive to trust anything she says or does without question.

So, my questions are:

1. If we decide to pursue a D, are these accounts treated as marital assets?

2. What if MIL or DIL decide to remove most of the contents just prior or after either of us announce our intention to D the other? Will this change anything?

3. What if she removes her name from the accounts so they no longer appear as her assets?

Hi Mim,

I'm only replying because I think you live in the same jurisdiction as I do (which is England and Wales; Scotland and Northern Ireland are different, and I don't know where the Isle of Man falls), although you have never specified precisely where you live.

You must know that the answer to your questions depends on the law governing your state. There are no universal laws governing anything. The only way to find out the answer to your question is to consult a lawyer who practises in your area. You might be able to find a broad outline of the law in your area online. I did this and found it helpful.

My understanding of the law is that all funds collected during the marriage are joint funds, and your wife's hiding or otherwise disposing of them (including removing her name) will not change that. However, once they are hidden or disposed of, you will have enormous trouble proving that they exist. Another problem with joint accounts would be proving that the money within them came from a particular source; i.e., from you or your wife.

I don't understand what is meant by wanting to ensure that "the funds remain available is anything happens to her". If she dies intestate and you survive her, then there are rules about how much money goes to a spouse and how much to the kids. The funds will always be "available" to you, her husband. If she wants to make sure that money in her sole accounts can immediately be spent for her children's needs, then she can draw up a document giving you power over those accounts. if she wants to leave money to her relatives she can write a will.

I don't think that these legal issues are the significant ones, however. Setting up joint accounts is an odd way of dealing with her financial affairs in case of her death - especially without talking to you and drawing up joint wills.

I suspect that you already know that you need to consult a lawyer about your questions, and also talk to your wife about why she has taken these independent and puzzling financial decisions. There is some rationale for these actions. If you continue to suspect that she is separating money in anticipation of divorcing you, then you need to use the law to stop her from doing this. She might give your money away, and as I said, you will find it hard to trace once she has done that.

Thanks for your reply, Sugarcane. I don't live in the UK, but I do live in a place where the law is based on English Law.

I will ask my FWW for more clarification on her reasons for making her accounts joint with her family, then take action accordingly. Right now she handles the joint finances - I expect that I will likely have to change this to a different arrangement as I'm not trusting her actions in that regard as much as I should.

Mim,

If your law is based on English law, then all income is joint income, but more than that, a marriage is a commitment to being joined.

Your wife does not have the right to make independent decisions in your marriage, about finance or anything else. I would say that it does not matter what reasons she gives for separating finances; she should not be doing this while married to you.

If there is a specific financial advantage for BOTH OF YOU and the children to arranging finances this way, then she should discuss this with you. You should then jointly seek independent financial advice on how best to utilise this advantage, and finally get a lawyer to turn the financial advice into a legal will.

I have done this in order to protect both my H and my children. I have learned of the tax advantages of leaving the inheritance tax-free portion of my estate directly to the children and the rest to my H (and vice versa for him). We sought financial advice on the best tax position and then used a lawyer to embody the details up in a will. The very day that (God forbid) we separate, we will go to a lawyer to draw up a different arrangement leaving all the money to the children, in trust for the younger one (they are 20 and 13 years).

I don't think you should accept any explanation for this from your wife. I think you should stop her from doing this and ask her if she is planning to divorce you. If she is (or you think she is, and she does not admit it) then you should seek legal and financial advice about your own will.

Thanks again Sugarcane.

Where we live, there's no inheritance tax.

I mentioned my concerns again to her, and she mentioned that her main concern is that her money be "tied up in probate" (whatever that means) if anything happened to her or to us.

I mentioned what you had to say and she refused to accept it, saying that the law's not the same here (she in fact has no knowledge of the law here - I'm pretty sure of that).

I mentioned that I thought that her activity wrt her accounts appeared to be almost surruptitious in nature, and asked her point blank if she was planning to divorce. She said no. But she is resolute in continuing her current arrangements with her accounts, even though she knows how I feel about them, saying that even if she corrects this, I'll find something else to question about her.

I will be seeking the advice of a lawyer as soon as I can on the subject.

And to think, prior to D-Day, I would have trusted her financial acumen without question. Now, I'm questioning everything.

Just rambling here, MiM:

It's true that, on her death, any money that she willed to other people would have to be dealt with by an executor. The legal process of distributing money, including paying any taxes owed, takes months. It is not unusual here for a year to pass before people get their hands on money from a will. That would probably happen to money left directly to her children.

However, you would be able to use money held in joint accounts (joint between you and her) immediately, so if you survive her, the children would not be without money. Surely she sees their father as the best person to look after their interests? Is she saying that she trusts her mother (or whoever) to look after the children's welfare, above you, or is she trying to have as many different backups as possible, in case of several deaths?

An alternative explanation to the divorce theory is that, to avoid being "tied up in probate", she is trying to avoid paying some sort of tax by hiding her assets from the state. If she sets up a joint account with, for example, her mother, then half the money in that account will be her mother's and not taxable as part of your wife's estate.

However, this is all beside the point, as I see it. It does not matter whether what she is doing is in fact the best arrangement for making her assets available after her death. The point is that you should be participating in these arrangements and indeed, making a mirror of those arrangements in case you die first. If they are advantageous for her then they are for you. You are in the same marriage and share the same children. She isn't allowed to make arrangements to suit herself!

Her argument here is that any tragedy that befalls her is likely to befall me as well, hence her arrangements.



We don't have inheritance tax here so that shouldn't a worry for her. You made an interesting point though about half of the funds in her account now being considered as her mother's, simply by making the account joint. Is this just for taxation purposes?



That's my problem right there. I've told her that I'm uncomfortable with what she's doing, I've told her that I cannot trust her when she takes these steps that seem to be suspicious at best, yet she went right ahead and did it, and shows no sign of changing her mind, or makes silly threats like ok, she'll take her mother's name off of her account and simply give the money to her instead. Even more unbelievable, she's concerned and upset with me now that I'm going to be spending our money by going to a lawyer to get legal advice on the whole issue of wills, marital assets, etc. !

Well, of course, you could both die in a plane or car crash, but that does not happen to most couples. Most of us die from illness, and that does not affect couples! She knows that. She is spinning you a line.

Not in England, MiM. That money is now equally owned - not even half owned, but fully owned - by her mother. Her mother now has the right to empty that account without any further permission from her daughter. That is how joint accounts work here, anyway.

Your wife has just given a chunk of YOUR JOINT money to someone without your permission. There is no such thing as "your wife's money" and "your money" with regard to what has been acquired during the marriage. There is only joint money. As I understand it, that is also true of money acquired before the marriage. A spouse cannot just say "I earned this (or inherited it) before we married therefore it is mine". If you own a house before getting married, when you divorce, the spouse has rights to half the house.

So as far as I can tell (and you should know that I would have made a GREAT lawyer - in my dreams!) your wife has technically given away a chunk of your joint money, even if the money has not yet been spent by her mother.

It might be that she has the right to do that, since she has equal rights over the money. It might be that the law assumes your consent unless you state otherwise. I suspect that you will have to do something legal, like getting a judge to order the money to be placed back within your reach, to get this money back.

So she IS determined to give your money away. You have to take legal steps to stop her from doing this, and to reverse what she has done so far. That is your money too, MiM.

If you want to play down the adversarial aspects of this, you could try doing internet research on wills, assets, children etc. and print out what you find, and show her. Show her the best way to protect joint assets, and also show that you should both be making the SAME provision for on the death of only one of you and the survival of the other. There should then be separate provision for joint deaths in a car accident that makes funds available to the children but does not take those funds away from either of you while you are alive.

There must be some simple power of attorney agreement that can be drawn up, to give MIL access to your accounts, to care for the children until the will goes through.

Your wife is choosing a very peculiar way to provide for the children. Her actions seems much more like a way to keep money out of your reach in the event of separation. Try the non-adversarial route to her face, but get a bulldog lawyer at the same time. I would not trust my H if he did this with our money, and I simply would not let him do it. I would divorce him if he made it clear that he considered him self a single entity like this. This shows no commitment to the marriage - quite the reverse.

(MiM, you'd get much more interest in this thread if you moved it to SaA. You are not divorcing yet! MrWondering is a tax lawyer and would be most helpful, although he practices in Michigan. There are other lawyers over there, too. Let them help, and also let others help with the "lack of commitment to marriage" aspect that bothers me about all this.)

Just a followup to this...

I made an appointment to speak to a lawyer this week about wills and marital property. FWW asked if she could come along, and I told her I was Ok with that.

I asked the lawyer specific questions of what is considered marital property, and how the courts will likely act in the case of separation / divorce. She indicated that once there's a history of separate accounts (as there is in our case), the courts are likely not going to change that, i.e., what's in her accounts is hers, what's in my accounts is mine, and what's in the joint account is treated as joint property.

So, while I'm still not too happy about the arrangements she's made with her accounts, it appears that those arrangements will not be disadvantageous to me or the kids in the case of separation / divorce, so I'm not going to spend much more time worrying about it again.

I'm not quite sure I understand, MiM. If this is money accumulated during the M, and the money is held in an account separate from you, then what your atty is saying is that it becomes automatically hers upon separation/divorce. What that means is that it would not be included among the assets that would be divided. So she gets to keep her private stash and then gets half of what you both have in joint. How is this not disadvantageous to you or the kids?

FWIW, around here it's not entirely unwise to have joint ownership of accounts and property with relatives as it can help avoid massive taxes upon death - not to mention the surviving relative can still access the accounts to pay bills etc. My mom has done this with all her property (put it joint with my brother and I). But my mom is a 78 year old widow with a heart condition, not a middle aged married woman with dependent children.

Not automatically. However, the court will take it under consideration. If we've basically agreed to keep separate accounts during our M, they will likely treat those separate accounts as personal, not joint, assets.


It's only disadvantageous to me if we don't keep enough funds joint to cover the kids, household expenses, etc.



Agreed. However, we don't have any "death" taxes here. I think her main concern was access to the funds if anything happens to us.