With the holiday season now behind us, you may be facing credit card bills resulting from a spouse’s manic spending. As a matrimonial and family law attorney and a certified divorce financial analyst (CDFA), I often meet with people concerned about protecting themselves financially from a spouse’s out-of-control shopping habits.
Marital challenges related to finances are difficult enough to navigate, but if you add the stress of dealing with a spouse who is suffering from mental health issues, the challenges are much greater.
One symptom of a manic episode, which is common feature of a bipolar disorder diagnosis, is poor decision-making, e.g., going on spending sprees. The emotional stressors that imbue the holiday season combined with the in-your-face advertising campaigns of most retailers can trigger an episode that could add another financial challenge to what may already be a source of stress in a marriage.
There are a few things you can do to legally protect yourself and your finances when married or proceeding through a divorce with a spouse who suffers from bipolar disorder or another mania-related disorder.
Consider a postnuptial agreement
If you have decided to remain married or are not yet ready to file for divorce, you have the option of entering into a postnuptial agreement with your spouse, delineating and dividing assets and income during and in the event of a divorce and/or the death of either you or your spouse. A postnuptial agreement is similar in concept to a prenuptial agreement but is executed during the marriage instead of prior to the marriage.
The postnuptial agreement can specify what assets are to be divided now, and in the future, and how and if support is to be paid for a spouse. If you and your spouse already have children, you can also determine such issues as custody and child support.
Most importantly, you can protect your assets and future income from a manic spending episode with indemnifications and the termination of joint credit cards, joint accounts and the pooling of income.
Ask for a divorce
If, on the other hand, you have determined that it is best to divorce, you can commence a divorce action.
Typically, the period between filing for divorce and the signing of the final settlement agreement will take many months—and in more complex matters, years.
During that time, both spouses are required to file detailed “financial affidavits” with the court, attesting under oath to their expenses and individual finances in a document known as a Statement of Net Worth, which ultimately forms the basis for setting child support, alimony payments and equitable distribution of assets.
Tell your attorney about manic spending concerns immediately
While a divorce action is pending, it is critical to maintain the financial status quo, and it is also imperative to protect assets and income if one spouse has a mental health condition that manifests in out-of-control spending.
If you are already working with an attorney, let your attorney know of your specific concerns immediately. You may want to show your attorney recent credit card statements, bank account statements and provide the specific documentation illustrating your concerns. Your attorney can file a Summons with Notice. That generally sets a date to value the assets and liabilities and should in most cases end the out-of-control spending down of joint accounts.
The date of commencement of your divorce action sets a date to determine assets (brokerage accounts, retirement assets, banking and savings accounts) and liabilities (credit card balances and Home Equity Lines of Credit, etc.).
If you cannot accomplish this in a timely way, you must make clear to your spouse, in writing, that spending from any joint account is not allowed as of a certain date, or that expenses must be capped at an agreed-upon dollar amount.
Whatever you do, make it clear that the financial status quo must be maintained and that he or she cannot spend joint resources without your knowledge and consent.
Consider enlisting the help of a mental health professional
In addition to working with an attorney, it may also be helpful to work with a mental health professional to address some of these issues with your spouse.
And as I always say, it is most important to make the safety and mental health of yourself and your children a priority during this incredibly difficult time.