The New Role Venmo and Other Cash-Sharing Apps are Playing in Divorce

3D rendering of money and a smart phone - Venmo and Divorce Concept

Do you know how much money your spouse has sitting in their Venmo or other cash-sharing apps? For many, Cash App and PayPal offer a convenient way to make small, everyday payments. But divorce attorneys are starting to see Venmo in a different light. Understanding the role cash-sharing apps like Venmo can play in divorce can help you avoid missing your share of these sometimes valuable assets.

Venmo and Divorce

When you are listing your assets and property in anticipation of divorce, your Venmo account probably isn’t at the top of the list. For many, the balances in their Venmo, PayPal, Cash-App, or Zelle accounts are minimal. If you primarily use them to make payments from a checking account, you might even forget that they have any value at all.

But in some cases, cash-sharing accounts like Venmo can play a significant role in a couple’s divorce. Depending on how each spouse has used their accounts, they could hold a lot of money. There is also a growing problem of dishonest spouses hiding assets in these online payment apps, hoping they will never be disclosed during divorce.

Online Payment Accounts Can Hold Substantial Assets

There are a number of honest reasons why your spouse may be holding substantial amounts of money in their cash-sharing accounts. For example, small business owners and hobbyists often get paid through these accounts, but transferring funds into their bank accounts can take time and sometimes cost money. Refunds and reimbursements can also go unnoticed and add up over time. Some employers have even begun using Zelle or other cash-sharing apps to pay their employees’ wages. Depending on how your family finances are managed, and where your income comes from, there could be hundreds or even thousands of dollars sitting in your spouse’s online payment accounts.

Hiding Assets in Venmo Accounts

However, in other cases, a spouse may be holding money in their Venmo account because they are planning to file for divorce. Because these accounts are new, they are often overlooked by individuals and attorneys alike. In addition, users must generally “accept” transfers in the app before they will appear in their account history. Venmo has also added the ability to transfer money directly from a verified bank account to a Venmo account if the user has been approved for a Venmo Mastercard® Debit Card. A dishonest spouse may try to shield their Cash App balances from distribution, hoping to receive more than their equitable share of the marital estate. Then, once the judgment is finalized, they may accept those transfers and receive more than their fair share of the assets.

Equitable Property Distribution Includes Cash Account Balances

Michigan law says that each spouse is entitled to an “equitable distribution” of marital property. While this isn’t always a 50/50 split, it must be fair and equitable given the family’s circumstances. The parties (in settlement) or the court (at trial) must divide up all the assets and debts accumulated by either party from the date of the marriage until the time of divorce. It generally doesn’t matter if that asset is in your name, your spouse’s name, or both names held jointly.

Divorce attorneys are well accustomed to dividing up the parties’ bank accounts, savings accounts, retirement assets, and investment portfolios. They know how to get records of the accounts, establish their values, and offset differences between the parties’ holdings. Cash-sharing apps are no different. If your spouse is holding substantial amounts in a Venmo or other cash sharing account, the Court can order them to transfer some of that balance to you, or offset the amounts with other property, assuming it knows they exist.

Disclosing Venmo Account Balances in Divorce Disclosures

Unlike more traditional assets, it is very easy for one spouse to set up a cash-sharing account on their phone without the other spouse knowing. These accounts can be tied directly to the parties’ joint or solely owned bank accounts, and money can be withdrawn from those accounts for everything from attorney fees to travel expenses. The biggest challenge, then, is finding out what accounts exist.

At the start of every Michigan divorce, the parties exchange “Domestic Verified Financial Information” (DVFI) forms. These forms disclose certain information needed in every case, including the parties’ income and assets. However, the DVFI’s instructions don’t specifically list cash-sharing apps as a type of financial accounts to be exchanged. Because of this, they are often excluded from the initial disclosures. Your divorce attorney may have to file a discovery request for statements or even submit subpoenas to Venmo, Cash-App, PayPal, and any other cash-sharing apps you think your spouse has used to determine if the assets exist, and how much money is being held in the accounts.

What Can be Revealed Through Venmo Records in Divorce

Sometimes, your spouse may be using a cash-sharing app to hide more than just money. If your spouse is having an affair, or struggling with gambling troubles or substance use, they may use a cash-sharing app as a way to hide how they are spending marital money. When the cash-sharing app records are paired with text messages and emails already produced, they can sometimes reveal more than just financial information.

Venmo, in particular, makes many transactions, and the descriptions of what the payment is for, publicly available unless the user specifically makes their transactions private. While these descriptions are often cryptic – such as food emojis – when paired with testimony or other documents, they can provide proof of how a spouse was dissipating marital assets or prove infidelity or fault to potentially improve your position for division of assets.

At NSSSB, our divorce attorneys use up-to-date divorce discovery techniques to uncover the truth about our clients’ marital assets. We know how to identify, document, and use cash-sharing accounts in a divorce. Our Southeast Michigan family law attorneys are happy to review your case and help you create a clear picture of your finances and family situation for the court. Click here to schedule a consultation with one of our experienced attorneys.