If you are involved in a divorce or other family law case, keep track of the flow of money through expense-sharing apps such as Zelle, PayPal and Venmo.
Expense-sharing apps such as Zelle, PayPal and Venmo are growing in use. If you are involved in a divorce or other family law case, it’s important to be aware of any payment apps your spouse may be using. You should keep track of the flow of money through any apps, especially as you move into the discovery phase of your case.
Is your spouse using an expense-sharing platform?
Can your spouse’s use of expense-sharing platforms such as Zelle, PayPal and Venmo affect the child-support, maintenance and property-allocation components of your divorce? The answer is yes. Too many people are using these services to overlook the possibility that your spouse may be using one of them. And if the use is significant, the exchange of income or property happening can add up to amounts that most certainly could impact your case.
PayPal, Zelle, and Venmo are not new, but their popularity as a convenient way to send and receive money is gaining in popularity. The applications are easily downloadable, and transactions are accomplished quickly with just a few keystrokes.
Zelle and Venmo are used exclusively in the United States. They are peer-to-peer (P2P) digital payment services. PayPal supports payments between 200 different countries and accepts 25 different currencies. When these apps were created, it probably wasn’t with the thought that they could be used to hide assets in a divorce proceeding, but the reality is that they can.
Be aware of differences among expense-sharing platforms
P2P payment portals on expense-sharing platforms are extremely useful tools. Being able to pay anyone, anywhere, anytime is convenient and free. With Zelle you must have a U.S. checking or savings account and link it to your Zelle account.
Venmo is slightly different. It is a social payment app that allows you to exchange funds with other Venmo users. Venmo also differs from Zelle in that it allows you to accumulate funds in a digital wallet for use in later purchases. It also allows you to directly purchase crypto currencies. These funds (and crypto interests purchased with them) would not appear in a bank account. These interests can go unseen in a divorce.
Additionally, although Venmo allows you to have only one account at a time, it does allow you to link more than one phone number and email address. If a Venmo user pays your spouse using an email address or phone number your spouse did not register to their account, the payment will remain pending until the spouse verifies their contact information. Until then, the money is maintained by Venmo, which keeps the funds in a third-party account. This means that if you review someone’s Venmo statements and they have transfers that they haven’t accepted, that money may not be reflected in their balance. Their account could say $0.00 at the date of statement production but significantly increase hours later.
Accessing payment-portal data for the discovery phase
P2P digital payment portals can contain a wealth of important information for divorce cases. However, access to account activity on these apps is not part of standard discovery requests, so some divorce attorneys may not even pursue statements. Some attorneys may not realize that such accounts even exist.
Unlike Zelle, where account transactions show up in bank statements, Venmo is not a bank account or a credit card. Rarely do parties disclose that they use Venmo at all. The discerning and vigilant lawyer should issue additional discovery requests (subpoenas) directly to the administrator of the app. Some administrators — such as Venmo — allow for serving the subpoena digitally.
Positive uses of expense-sharing platforms
Zelle and Venmo can have positive uses in family law cases. Payments can quickly and easily be made for child support, medical expenses, daycare, and reimbursement for extracurricular activities. In cases where payment is disputed, digital portal statements can serve as the proof of payment you may need.
As you think about your assets, remember to consider expense-sharing platforms such as Zelle, PayPal and Venmo. The attorneys at LSR Family Law Group provide expert guidance for the discovery phase in family law cases, including divorce, custody or post-judgment matters. Contact the office to reach Steve Rakowski for a confidential consultation, at admin@lsrfamilylaw.com or 847-412-9950.