.2504220956338.png)
Money is one of the biggest sources of conflict in marriage, but when financial infidelity occurs, it can undermine trust and even lead to divorce. In North Carolina, hidden debts, secret bank accounts, and undisclosed spending can have serious legal consequences, especially if a couple is heading toward divorce.
Understanding what financial infidelity is, how it affects a marriage, and what legal steps you can take is crucial for protecting your rights and financial future.
What is financial infidelity?
Financial infidelity happens when one spouse hides financial information from the other. This can include:
- Secret bank accounts or credit cards
- Hiding income, bonuses, or investments
- Undisclosed gambling or major spending
- Lying about debts or financial obligations
- Making large purchases without consulting a spouse
- Secretly loaning money to family or friends
While financial infidelity doesn’t always lead to divorce, it can create serious trust issues and leave one spouse in financial distress.
Is financial infidelity illegal in North Carolina?
Financial infidelity itself is not a criminal offense, but it can have legal consequences in the following ways:
Equitable distribution and hidden assets
North Carolina is an equitable distribution state (N.C. Gen. Stat. § 50-20), meaning marital assets and debts must be fairly divided during a divorce. If a spouse hides assets, debts, or income, it can impact property division and lead to:
- A larger share of assets awarded to the innocent spouse
- Penalties or legal consequences for the dishonest spouse
- The reopening of a divorce settlement if fraud is discovered
Fraud and marital waste
If a spouse wastes marital assets on gambling, an affair, or secret spending, the court may consider this marital waste (also called "dissipation of assets"). Under North Carolina law, a judge may offset this waste by awarding more assets to the other spouse.
For example, if a spouse secretly spent $50,000 of marital funds on an affair or hidden debts, the court may adjust property division so the other spouse receives a greater share.
Alimony and hidden income
Under N.C. Gen. Stat. § 50-16.3A, if a spouse hides income to reduce alimony or child support, it can lead to serious legal consequences. North Carolina courts can:
- Impute income (estimate actual earnings)
- Modify alimony or child support orders
- Hold the dishonest spouse in contempt
How to protect yourself from financial infidelity
If you suspect your spouse is hiding money or debts, consider the following steps:
Review financial records
- Check bank statements, credit reports, and tax returns
- Look for hidden withdrawals or undisclosed income
Request financial disclosure in divorce
During a divorce, both spouses must fully disclose their assets and debts. If you suspect hidden accounts, an attorney can:
- Request bank records and tax returns
- Use forensic accountants to investigate hidden assets
- Ask the court for financial subpoenas
Final thoughts: a skilled lawyer can help
Financial infidelity can be devastating both emotionally and financially. If you're facing hidden assets, undisclosed debts, or secret spending in your marriage, it's essential to know your rights and take the necessary steps to protect your future.
If you suspect financial infidelity in your marriage, contact Jetton & Meredith today for a confidential consultation. Our experienced family law attorneys can help you navigate North Carolina’s divorce laws and ensure a fair financial outcome.