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Money and marriage are deeply intertwined. But when a relationship starts unraveling, financial behavior often begins to shift long before anyone files for divorce. In California, where community property rules require both spouses to fully disclose assets and debts, these shifts can have major legal and financial consequences.
If you’re thinking about divorce, or simply sensing something is off, here are the most important financial red flags to watch for and what they may mean for your future.
Why Financial Red Flags Matter in California Divorces
California law requires spouses to act as financial “fiduciaries” to one another. That means:
- No hiding money
- No wasteful spending
- No secret accounts
- No moving assets without disclosure
But when people anticipate divorce (emotionally or practically) these duties are often the first to break down. Recognizing warning signs early gives you a better chance to protect your assets, gather documentation, and ensure the eventual division of assets is fair.
Sudden Secrecy Around Money
One of the earliest and most telling signs is a sudden change in financial behavior. A spouse who once talked openly about bills or expenses may become quiet and protective.
Common shifts include:
- New passwords on previously shared accounts
- Shutting down conversations about money
- Refusing to show bank or credit card statements
- Getting defensive when you ask simple financial questions
Secrecy is rarely about something good. It’s often the earliest indication your spouse is planning financially for a different future that may not include you.
Strange Activity in Bank or Credit Card Accounts
If something feels off financially, look at the statements. Patterns often reveal more than words.
Keep an eye out for:
- Unexpected cash withdrawals
- Transfers to unidentified accounts
- New recurring charges
- Unexplained purchases or hotel charges
- Money moving through payment apps like Venmo, Cash App, or PayPal
Small irregularities may be stress or oversight. Multiple irregularities may be planning.
Manipulating Income Before Divorce
A sudden drop in income especially for self-employed spouses can be intentional. People sometimes try to make themselves appear poorer before filing because income impacts:
- Spousal support
- Child support
- Tax obligations
- Division of bonuses or commissions
Warning signs include:
- Delayed invoices
- Suspiciously low business profits
- Overpaying taxes
- Cutting hours without explanation
- Deferring bonuses into the next year
If income drops while lifestyle stays the same, that’s a major red flag.
Moving or Hiding Assets
This is one of the most serious concerns.
Signs include:
- Opening new accounts without telling you
- Moving money out of joint accounts
- Removing your name from bank, title, or investment accounts
- Transferring property to family or friends
- Loaning money to people who never repay it
- Buying crypto or precious metals without transparency
California courts do not tolerate asset hiding but only if it’s discovered.
Suspicious Debt Behavior
Some spouses run up credit cards before a separation hoping the other person will get stuck with half. Others quietly open debt in both parties’ names.
Warning signs include:
- Maxing out cards suddenly
- Taking cash advances
- Opening new lines of credit
- Charging personal expenses on business accounts
- Using community funds to cover personal debt
Debt accrued for non-marital purposes may later be assigned to the person who incurred it but only if it’s documented.
Tax Withholding and Filing Concerns
Tax behavior is an overlooked but powerful clue. If your spouse:
- Changes withholdings
- Refuses to share tax returns
- Adjusts payroll deductions
- Insists on filing separately without explanation
- Overpays taxes to create a future refund
Business-Owner Red Flags
If your spouse owns a business, be especially alert. Businesses are the most commonplace people hide income.
Look for:
- Sudden new employees who are friends or relatives
- Exaggerated business expenses
- Cash not being reported
- Reduced profits right before divorce
- Delaying contracts or commissions
- Unexplained business trips
California courts carefully analyze business income once divorce begins but only if you bring concerns to light early. It can also be costly to try to track down the money and show that it was spent to avoid having it be part of the family assets.
Digital Footprint Clues
Today, financial red flags often show up digitally before they show up on paper.
Signs include:
- Deleted financial emails
- New cloud accounts
- Changed two-factor authentication
- Unusual activity in shared apps like Mint, QuickBooks, or bank apps
- Private browsing or hidden folders
Tech changes often signal early planning.
Lifestyle Doesn’t Match the Story
If your spouse says money is tight but buys new tech, clothes, gifts, or takes trips, something isn’t adding up.
Lifestyle inconsistencies often reflect:
- Hidden income
- Off-books work
- Secret spending
- Someone preparing to fund a post-divorce life
Trust your intuition. Financial behavior always tells a story.
Bottom Line: If Something Feels Off, Pay Attention
Financial red flags don’t always mean divorce is certain but they do mean you should:
- Gather documents privately
- Make copies of bank and tax records from before and after the behavior change
- Keep track of changes in spending or income
- Speak with a family law attorney early
- Protect your own financial access and information
In a California divorce, knowledge is power. Spotting and documenting red flags early can help ensure you enter the process informed, stable, and protected.