Failed relationships: Hiding your money

Have you ever thought about what happens when defacto relationships and marriages fail? There was a sneaky search query from a Melbournian who stumbled onto my money and relationship post, 'What's mine is mine, what's yours is yours.'

"www.google.com.au — how+to+hide+my+money+when+a+defacto+relationship+fails"

Best advice for the googler is - seek advice from your solicitor/lawyer/accountant immediately.

Usually it's a bit too late to be looking at salvaging your assets from a defacto breakup when you've already split up. I won't be covering how to hide assets from your spouse in the event of divorces because that's rather devious particularly when there are kids involved. Obviously there are several means of hiding assets from married spouses but that's not for me to tell you.

It's different when it concerns defacto relationships. Just because you've lived together for six months shouldn't mean that you or your partner are entitled to one another's assets. Unfortunately the law behaves otherwise. If you're in a defacto relationship and you've got all the assets and your defacto didn't sign any 'binding financial agreement' then you're probably up to your neck in trouble if your defacto decides to take you to court to clean you out.

The unethical side of hiding your assets

In some cases, it's fair that your defacto should be entitled because they helped pay for half the furniture, half the mortgage despite their names not being on the title document, half the bills for maintaining the property when something breaks down (if they were renting, they wouldn't have paid for maintenance) - so the law does look at several points in arriving at their decision about what to split and how much to split. They look at the dependency of the two parties, the financial contribution from each party to the household bills and expenses, the housework, how intertwined your finances are, joint accounts and several other aspects of the relationship such as whether or not there are kids involved.

How can you hide your assets?

You can hide your cash money by transferring it out of your account. You can hide your assets by 'selling' them to your family and friends and buying them back again later. You can hide portable assets by simply relocating them elsewhere. The law doesn't like to tamper with any assets that have been transferred and or sold to third parties. Or if you want to really put various assets out of reach, you can open up some family/discretionary trusts and transfer your funds into them. You'll probably get some whopping bill from your accountant and solicitor but how much is at stake? Work out the pros and cons. The hardest part to hide is your property and your superannuation.

Your property and your superannuation can be split upon dissolution of a marriage and a defacto relationship. As assets, they're very difficult to hide, sell and in the case of superannuation - impossible to hide or transfer.

Before couples move in together, they should take a long hard look at each other's financial state. If you've got plenty of assets and the other party has nothing then you should take steps at ensuring that your assets are protected by having them sign a 'binding financial agreement' (commonly referred to as prenup). It's not the most romantic idea but so many relationships fail and aren't everlasting. Everyone wants to find 'the one' to love and grow old with but this notion is outdated with the divorce statistics.