Are You the Victim of Financial Abuse?

There is a lot of open discussion and awareness about domestic abuse, centering on physical and emotional abuse. What is not discussed as frequently is financial abuse. Financial abuse is the control of a couple’s finances by the abusing spouse so that the victim spouse feels completely dependent and controlled by the abuser when it comes to anything involving money. This can have a devastating effect on a victim during marriage and through a divorce.

What is Involved in Financial Abuse?

Financial abuse can include a long list of behaviors that range from blatant to subtle such as:

  • Using marital funds for a substance abuse problem
  • Telling other people the victim is incompetent when it comes to managing money or assets
  • Stopping the victim from taking a job outside the home
  • Spending marital funds on affairs
  • Requiring the victim to sign financial documents without reading or understanding them
  • Requiring the victim to account for every dollar they spend
  • Requiring review by the abuser of all statements, receipts, and transactions completed by the victim
  • Removing the victim’s name from deeds, titles, and accounts
  • Refusal to share any information with the victim about marital assets and debts
  • Preventing the victim from having access to or using a joint bank account, credit card, debit card, or checkbook
  • Preventing the victim from creating or advancing a career
  • Preventing the victim from accessing online joint financial accounts or frequently changing the passwords so they have to ask for access
  • Maintaining a complete absence of any communication about finances by the abuser to the victim
  • Leading the victim to believe they do not have the skills necessary to manage money or assets
  • Keeping the victim completely in the dark as to the amount or value of marital assets or debts
  • Gambling away the couple’s funds
  • Forcing the victim to provide all of the income for the family or couple
  • Forcing the victim to agree to allow the abuser to manage all of the marital assets
  • Falsely accusing the victim of having a substance abuse or gambling addiction that leads them to spend money recklessly or irresponsibly
  • Criticizing the victim for the way they manage or spend money
  • Creating a set and often insufficient allowance for the victim for all of their expenses
  • Convincing the victim they are incompetent at handling or understanding money
  • Controlling the finances but not providing enough to pay for housing, food, utilities, medical care, and other expenses
  • Complete control of all marital assets and funds by the abuser

In addition, the abuse also often includes manipulation and control of the victim’s separate assets:

  • Using the victim’s separate assets to pay for marital expenses and debts
  • Theft of the victim’s separate assets or forcing the victim to sign them over to the abuser
  • Requiring the victim to take out loans in their own name for the benefit of the abuser
  • Preventing the victim from having or using a separate bank account, credit card, debit card, or checkbook of their own
  • Harming the victim’s credit score by not allowing them to pay their bills on time or running up debt in their name
  • Forcing the victim to withdraw their own retirement funds early for use by the abuser
  • Forcing the victim to allow the abuser to manage their separate money

During the divorce, financial abuse can also include:

  • Wasting marital assets (such as destroying valuable art)
  • Selling or giving away marital assets
  • Refusing to fully disclose assets and debts as required by the court
  • Lying about payments or transfers made to or on behalf of the victim
  • Hiding marital assets during the divorce process
  • Failing to pay or making late payments for court ordered temporary spousal or child support
  • Delaying or postponing court appearances to prevent the victim from obtaining the financial support they need
  • Creating new debt

Proof of Financial Abuse

Financial abuse can be challenging to prove, particularly if your abuser has conditioned you to believe it has not happened and that you cannot comprehend financial matters. True financial abuse involves a pattern of behavior, and your attorney will gather evidence to show the court how this has played out in your marriage. Proof may include:

  • Witnesses who have heard the abuser denigrate the victim’s ability to manage finances or discuss managing all the funds
  • Testimony by the victim
  • Emails, texts, voicemails, and correspondence
  • Documentation showing only the abuser conducted any money management or spending
  • Account statements, receipts, transaction reports, financial applications, and loan documents

In some cases, it is necessary to utilize the services of a forensic accountant who can find hidden assets and transactions, trace a pattern of spending and transactions, and explain the ultimate control the abuser maintained over the couple’s financial life. A mental health expert may also be called as a witness to explain the subtle and insidious nature of this type of abuse and how a victim may seem to consent to it when in actuality, they have all control taken from them.

Remedies for Financial Abuse

As soon as the divorce is filed, courts in most states will issue mandatory injunctions directing the couple not to move funds, sell assets, or affect marital assets and debts. Violation of this order by the abuser can result in contempt of court. This is an initial step that provides some protection. The ultimate solution for financial abuse is the final disposition of assets and debts of the marriage, so that the victim can walk away with assets and debts in their own name and under their own complete control. It is also possible for the victim to obtain an order of protection that prohibits the abuser from threatening or intimidating them concerning financial matters.

Ongoing Issues with Financial Abuse

There can also be lingering abuse after the divorce. If alimony (spousal maintenance or support) is ordered by the court, it can create an ongoing financial dependency between the victim and the abuser. The abuser then has the potential to be late with payments, pressure the victim not to enforce the order, and so on.

When there has been financial abuse, your attorney can request that spousal support be paid as a single lump sum at the time of the finalization of the divorce. This is done under the court’s eye and will conclude the abuser’s control over the victim with regard to support.

Child support can be another complication. Child support is ordered as a weekly, bi-weekly, or monthly payment in most cases, allowing the abuser to exert ongoing control over the victim. There are a few possible solutions. One is that the court order directs the abuser to make the payments to the state child support agency, enforcing and collecting the funds. This may not stop the abuser from withholding payment and taunting the victim. Still, it does provide the victim with a layer of protection and removes the ultimate enforcement responsibility from them. It’s also possible to request that payments be made to the victim’s attorney who can then track and enforce the order on an ongoing basis.

If the abuser does not comply with the court order for distribution of marital assets, the victim’s attorney may have to return to court to seek enforcement of the order. It’s not uncommon for abusers to delay making transfers after the divorce or draw out the distribution process by refusing to move out of a home, “forgetting” to sign certain documents, or “losing” passwords or deeds.

One more complication can involve shared ownership of assets after the divorce. In some instances, the court can order both spouses to continue as joint owners of a home or business for a period of time leading up to a future sale or buyout. In general, this type of award simply does not work when there has been financial abuse, so your attorney will advocate that this type of award is inappropriate and unworkable given the evidence of financial abuse in the marriage.

Financial abuse is just as serious and devastating as other types of abuse. If you are experiencing this type of abuse, it is essential that you work with an attorney who understands it and can properly protect you throughout your divorce.

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Eric Weinstein

Eric Weinstein, a partner at New York matrimonial litigation firm Bikel Rosenthal & Schanfield, brings an unconventional approach to the high-conflict disputes over complex assets for which the firm is known.

Eric’s reputation for skilled diplomacy and successful negotiation is backed by three decades of experience litigating high-stakes disputes in New York’s state and federal courts, related to the high-value assets, complicated income streams, and unique financial circumstances characteristic of high-net-worth New Yorkers and their spouses including.

To connect with Eric: 212.682.6222 | Online

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