Financial abuse in marriage is an insidious version of emotional abuse in which the abuser uses money as a threat to control their spouse — most often, the wife. Financial advisors are in the best place to call out abusers and help take these troubled relationships to a healthier level, as New York City matrimonial attorney Jacqueline Newman tells ThinkAdvisor in an interview.
Though wives may financially abuse their husbands, it is wives who are the chief victims of domestic financial abuse, points out Newman, who has provided expert commentary on CNBC, CNN and Fox Business, among other media outlets.
In the interview, the managing partner of Berkman Bottger Newman & Schein discusses five ways financial abuse manifest:
- Being kept in the financial dark about assets
- Stealing money from a spouse,
- Doling out an allowance to the spouse,
- Requiring an accounting of every cent spent, and
- Forbidding a spouse to work outside the home.
A founding member of the American Academy for Certified Financial Litigators, Newman specializes in serving the affluent in divorce litigation and mediation, equitable distribution and prenuptial agreements, among other areas.
ThinkAdvisor recently interviewed the lawyer — who works with financial coaches on a case-by-case basis — on the phone from her Fifth Avenue office. Her mission, she says, is “to help people get out of unhealthy relationships and become open to fresh new ones.”
Here are excerpts from our interview:
THINKADVISOR: Is financial abuse a form of emotional abuse?
JACQUELINE NEWMAN: Absolutely. It’s all about control.
Why is this issue surfacing in marriages nowadays?
Historically — stereotypically — men handled the finances and women handled the home. Now, as more women are in the work force and are no longer playing as much of that traditional role, their involvement in finances is growing. But there are definitely situations where the husband will say, “I don’t want you involved in our finances,” trying to control the woman that way. This is seen as financial abuse. Financial abuse has been happening for a long time, but now it has a label and is more identifiable.
Most of the time, you say, it’s the male in a relationship who’s the financial abuser. What’s an example of the woman’s being financially abusive?
I had a case where the husband made the money and would deposit it in a joint account. But the wife would take it out and put it into her own account and allot the money to her husband — give him an allowance. Control is what was going on here.
Did the coupe get divorced?
Yes. Not shocking!
You identify five types of financial abuse. For instance, when one spouse doesn’t tell the other about all the assets the couple owns.
Often there may be a situation where one spouse has complete control of the finances, and the other has no idea what’s going on. I call that “being in the financial dark.” But sometimes this is OK because one spouse may not care about [knowledge of] finances and doesn’t want to know. I’ve had cases where one person says, “I’ve tried to sit down with my spouse and go through our finances; but you see their eyes glaze over, and they say, “Stop bothering me with this.”
In the above situation of withholding information, what might the abuser say?
When one spouse wants to know what’s going on, the other would say, “I’m not going to tell you. It isn’t your business. Worry about your own things.” You’d be shocked at how often people say that.
Another type of financial abuse you’ve written about is one spouse stealing money from the other. Please elaborate.
Stealing is of course illegal under any circumstances. But what you see happening is if one person receives, say, a premarital inheritance or gift from another family member, the other spouse feels entitled to it. What goes through their mind is: “I’m going to use this money now for XYZ because you don’t contribute [financially] anyway.”
Then there’s the abuse of when one spouse doles out an allowance to the other. You mentioned this earlier, but does it occur often in other situations too?
Yes, it can happen whenever one person has control over all the finances and [dictates] exactly how much the other spouse can spend. This should not be confused with a family living on a budget. I’m talking about cases like one I had in which the husband went shopping and bought everything at Neiman Marcus and Bergdorf’s; but he basically told his wife she had to shop at garage sales. She was only allowed to spend a certain amount of money, whereas he could spend whatever he wanted.