When a relationship breaks down, questions about money and assets quickly become a central issue, particularly what each spouse can or cannot do with their own money before a divorce is finalised.

The law around finances during divorce can be complex and is guided by principles of fairness rather than a rigid formula. This means that the way a spouse uses their money before or during proceedings can have a significant impact on how the court views their financial conduct, and may even affect the financial settlement itself.

This article explores the do’s and don’ts of accessing your own money before you divorce, what happens if one party spends excessively, gifts money, or hides assets, and what the courts can do to prevent financial misconduct.

Understanding ownership and financial disclosure

At first glance, it might seem simple: money in your own name, such as savings, income, or a personal account, belongs to you. However, in the eyes of the family court, all assets, whether held jointly or individually, are considered part of the “matrimonial pot” when determining a fair division of finances.

This means that even if a bank account is solely in one spouse’s name, the balance within it may still be considered when the court makes a financial order. The court assesses all assets — savings, property, pensions, and investments — regardless of ownership, and decides how they should be divided to achieve fairness and meet the needs of both parties.

Because of this, accessing or spending your own money before a divorce must be done carefully. Any unusual or excessive spending can attract scrutiny and, in some cases, be penalised by the court later.

The “scorched earth” tactic and why it backfires

There have been many cases in which a spouse adopts what’s known as a “scorched earth” approach, deliberately spending or dissipating assets before or during divorce proceedings to reduce the amount available for division.

Examples include:

  • Making lavish purchases (luxury cars, holidays, or art)
  • Transferring money to friends or relatives
  • Gifting assets under the guise of generosity
  • Selling property or investments for less than their value

Courts take a dim view of this type of conduct. Under Section 37 of the Matrimonial Causes Act 1973, the court has powers to prevent or reverse such transactions if it believes assets have been disposed of deliberately to defeat a spouse’s financial claim.

In cases where a party has already dissipated assets, a judge can make what’s called an “add-back”, treating the wasted funds as if they still existed for the purpose of division. For example, if one spouse spent £50,000 recklessly, the court may assume that spouse has effectively already received that amount and adjust the settlement accordingly.

Can you spend or use your own money before divorce?

Everyday expenditure, such as paying bills, buying groceries, or maintaining normal living standards, is generally acceptable. However, significant financial changes or transfers can raise red flags.

The Do’s

  • Continue using money for normal living expenses: The courts expect both parties to continue living their lives as normally as possible. You are entitled to pay your mortgage, cover childcare costs, or maintain your usual standard of living. The key is transparency — keep clear records and ensure your spending is consistent with your historical patterns.
  • Keep financial records: Transparency is vital during divorce proceedings. Keep records of all major transactions, including bank statements and receipts. If a judge later questions your spending, you’ll need to show that your actions were reasonable and not designed to undermine your spouse’s financial claim.
  • Seek legal advice before making large purchases or gifts: If you are considering using a significant amount of money before or during a divorce, for example, buying a car, paying off a family debt, or gifting money to a relative, seek advice first. A solicitor can assess whether the transaction might later be viewed as dissipation of assets and help you document your reasoning if it’s legitimate (e.g., a necessary home repair or genuine debt repayment).
  • Be open about your finances: The court process requires full and frank disclosure of all assets and income. Attempting to hide or under-report funds will almost certainly harm your case. Judges take a strict view of dishonesty, and any lack of disclosure can result in adverse inferences or even costs penalties.

The Don’ts

  • Attempt to hide or transfer money: Moving funds into another account, transferring money abroad, or putting it in someone else’s name can be viewed as an attempt to conceal assets. If discovered, which it often is, through disclosure or forensic accounting, it can lead to serious consequences. The court may set aside such transactions or order costs against you.
  • Make large gifts: Gifting money or valuable items to friends or family members just before or during a divorce can appear suspicious. Unless you can clearly show that the gift was legitimate and consistent with your usual behaviour, it may be challenged. Judges can order those funds or assets to be returned or “added back” to your notional asset pool.
  • Waste money out of spite: Spending out of anger or a desire for revenge, for instance, emptying a joint account to prevent your spouse from accessing funds, is particularly risky. Courts recognise such conduct as “wanton dissipation”and may penalise the offending spouse in the final financial settlement. A well-known case, Vaughan v Vaughan [2007] EWCA Civ 1085, demonstrated how the court can treat reckless spending as a deliberate attempt to reduce matrimonial assets, resulting in an adjustment against the spender.
  • Make drastic changes without warning: If you are the main breadwinner or control household finances, suddenly changing financial arrangements, such as stopping payments to your spouse or cutting off access to joint funds, can lead to an urgent application for maintenance or an injunction. Courts can quickly intervene to restore fairness and prevent hardship.

What happens if a spouse starts spending recklessly?

If it becomes apparent that one spouse is attempting to waste or move assets, the other can apply to the court for urgent relief. A judge can make what’s known as a Freezing Order(also called a Section 37 injunction), preventing the sale, transfer, or disposal of assets until the financial claims are resolved.

To obtain such an order, the applicant must show:

  • There is a real risk that assets will be dissipated or hidden; and
  • The respondent’s actions would likely prejudice their financial claim.

Once granted, the order can freeze bank accounts, stop property sales, or restrict transactions above a certain threshold. Breaching a freezing order is a serious matter and can result in contempt of court proceedings.

The courts are well-equipped to deal with attempts to hide or waste assets, and any short-term gain achieved through such tactics often leads to long-term loss. The safest approach is always to act with integrity, keep records, and seek professional legal guidance before making any major financial moves.