Let’s face it, many people have a difficult time discussing money—their incomes, their assets and their liabilities. Therefore, it is not surprising people are rarely discussing the topic of financial abuse. While spotting financial abuse may be difficult particularly in high-net worth-marriages, it certainly exists. In my New York family law practice, I frequently deal with cases involving financial abuse. How can you spot if you or someone you care about is being financially abused? The tell-tale signs may be hidden in the details. For example, have your passwords suddenly stopped working? Are you unable to have visibility to credit card accounts, savings, checking and brokerage accounts? If you are a secondary card holder on a credit card, has your spending limit been cut so low that you can’t maintain the status quo spending? Are you told to authorize the filing of tax returns without having the opportunity to review the tax returns? Are you being told that the finances are too complicated to explain and that you don’t need to know about the finances or even worse that it is none of your business? Worse yet, are you having difficulty accessing the monies you earn as they are automatically deposited into accounts for which you have no control? While some of these issues may have innocent explanations, taken as a whole, they demonstrate a pattern of financial abuse.
In my New York practice focused on high stakes divorce, I often represent people who are intelligent, capable, and deeply aware of their surroundings. Yet many didn’t realize that they were being financially abused. At some point, however, they realized that they needed to understand their finances. Perhaps, they were being asked to transfer monies into a trust or to sign documents that made them feel uneasy. Perhaps, they realized that their finances were being controlled by a spouse and they no longer felt they could trust that person. The financial abuse may even have led to emotional or physical abuse and enough was enough. They were asking questions but receiving no answers and soon they found themselves too afraid to even ask the questions. When they did summon up the courage to ask, they were met with other forms of abuse or even the silent treatment. That is how financial control appears and manifests. It creeps up on you slowly and without warning. It becomes part of the relationship and you didn’t even notice this has become your norm. And in high-net-worth families, where finances often include equity compensation, RSUs, businesses, trusts, and multiple properties, the imbalance of control over finances can be deep and complex. When you are shut out and shut down, it is time to be concerned.
Below are some important take-aways regarding financial abuse.
What are the signs of financial abuse in high-net-worth marriages
Financial abuse is not just about taking money away, restricting your access or even worse, hiding the money or transferring it overseas to unknown people. Those may be the last signs to occur. That may be the end of the cycle. The signs at the beginning of the financial abuse cycle are far more subtle. It is the fact that you are restricted from accessing marital and even perhaps your separate funds. It is a loss of control, a lack of transparency about your finances and most importantly, a feeling that you no longer have autonomy in your life. You may not be able to make a move financially without your spouse knowing as you had to ask permission before spending any money. In marriages with significant assets, the signs may be almost invisible. It may be subtle because the financial picture is so inherently complex. You may not notice at first because there is money to spend but then your spending is cut, the transparency diminished so that you have virtually no visibility. You are literally stonewalled when it comes to the family finances. Shut out and shut down.
Perhaps in the beginning of the cycle, you viewed the financial abuser spouse as being protective, smarter, able to manage finances better than you. Perhaps you were told not to worry or even not to waste your time attending sessions with an accountant or financial advisor. You may have been busy working, taking care of the children and felt that your spouse could take care of the finances. Over time, the financial advisor and the accountant no longer included you in the communications between them and your spouse. You were no longer even invited to the meetings. The financial abuser stopped filling you in about the meetings and in fact stopped telling you when the meetings were scheduled. When you asked about the finances, they said it was complex or that there was plenty there or that I will always take care of you. You became more and more reliant until you had little to no autonomy. You were being controlled. The financial abuser had the money and the power. You had neither.
Sign 1: You no longer have access to the full financial picture
You used to have access to the important financial documents and information but now you have little to no access. This is the first sign. You no longer have access to view the most basic documents as follows:
- tax returns have gone missing
- your spouse’s RSU or stock option vesting schedules
- Bank and brokerage statements
- Trust agreements you are not allowed to review
- Business records or valuations withheld
Most significantly, new passwords guard the access to visibility on bank accounts, brokerage accounts, credit card accounts and even retirement accounts. The passwords were changed and no matter how, or how many times you ask, the passwords are not made available to you.
These changes aren’t likely a mistake or coincidence. You are being shut out and these are the signs that transparency to your financial affairs is slipping away.
Sign 2: Your spouse is controlling the spending, but only yours
If your spending is being controlled, you need to ask yourself why? It is certainly reasonable to have a family budget but when the only person placed on a budget is you and your spouse is spending without any transparency, then that isn’t planning – it is controlling. What are the signs of being financially controlled?
- You are being interrogated about making the routine purchases for the household
- Your credit card limit has been lowered or even cut off
- Your spouse refuses to share their credit card statements while reducing your spending limit.
- You are suddenly and unilaterally placed on an allowance
- Your spouse’s spending continues unabated with money available for their trips without you, luxury items such as watches, expensive cars and boats
You recognize things have grown out of control and you are growing increasingly concerned.
Sign 3: Financial complexity becomes a shield for secrecy
High-net-worth families often have a complex asset structure. Even your spouse’s compensation may be complex. Complexity isn’t the issue – the problem is that complexity becomes the excuse for a lack of transparency. Problems arise when complexity is used to avoid transparency.
- Deferred compensation that is never explained
- RSUs or stock option vesting schedules are stated to be too complicated
- Carried interest or equity stakes withheld
- Business entity tax returns that you are no longer or even ever allowed to review
- Trust structures that you are told exist to protect you and the children but you weren’t part of the planning
These are exactly the spaces where financial abuse lurks.
How the DeJesus formula reveals concealed value
In New York, the DeJesus formula helps determine which portion of restricted stock units or deferred compensation is marital property. It is especially important when one spouse insists future compensation is off-limits. It is also imperative to review the award letters and grant documents as the equity awards may be for work already performed in the past and therefore DeJesus does not apply.
The DeJesus formula helps identify:
- The marital share of equity awards
- The portion tied to work performed during the marriage
- The separate property portion for work to be performed
This formula often exposes compensation that a controlling spouse hoped to keep hidden. Take a look at my DeJesus calculator found on my lisazeiderman.com blog.
Sign 4: You feel stressed and anxious about questioning your spouse about finances
Anxiety around asking financial questions is one of the strongest indicators of an imbalance. What are the signs?
- You feel too nervous about your spouse’s reaction to ask to see the tax returns so you just sign them or authorize their filing
- You feel that you aren’t entitled to ask about their bonus
- You are being told that it’s too hard to explain
- You are afraid of your spouse’s anger when you ask to see credit card statements
- You are being dismissed when it comes to financial transparency
- You are being stonewalled about the finances and you are too afraid to push the topic for fear that your spouse will explode or even cut you off further
- Feeling nervous to ask about taxes or bonuses
Healthy marriages allow for discussion about finances. Financially abusive spouses punish those who ask questions.
Sign 5: You Have Been Shut Out of Major Financial Decisions and Planning
If you are being excluded from planning for your own or your family’s financial future, then you may have just spotted a significant red flag. Following are some signs in the road that should serve as warnings that you are being financially controlled:
- Real estate is not titled in your name although marital funds were used for the purchase and the running of the property
- Transferring large sums of money without your knowledge or consent
- Closing accounts
- Opening new accounts and failing to provide information
- Funding trusts without your consent
- Transferring monies between business entities Moving money between business entities
- Opening new credit cards and taking on new loans without your knowledge
- Changing investment strategies
Even beneficial decisions become problematic when they exclude you completely.
Sign 6: Your spouse restricts your ability to work or earn
This is critical. Being financially independent is critical to keeping yourself and your family safe. If someone is placing limitations on your ability to be financially independent, that is concerning. It makes you unsafe and vulnerable. Financial independence is a form of safety. Limiting your financial independence can create vulnerability. The road signs are pretty clear – take a look below:
- Pressuring you to stop working
- Telling you that you can’t make as much as the child care provider
- Refusing to provide funds for child care so you can work
- Telling you that your career isn’t worth pursuing
- Making you financially dependent by refusing to support your interest in working
Over time, this restricts your autonomy and diminishes leverage in a divorce.
Sign 7: You have found the secret breadcrumbs to financial infidelity
Transparency around money isn’t about maintaining privacy—it is about a financial partnership. If your spouse is committing financial infidelity, it doesn’t necessarily mean that they are having an affair but it definitely shows that your financial partnership is imbalanced. Following are some signs of financial infidelity:
- Credit cards opened without your knowledge
- Cryptocurrency holdings not disclosed
- Money transferred to family or friends
- Business accounts used for personal expenses
- Loans taken out in your name without your consent or knowledge
- Savings or investments you were never told about
These discoveries often reveal a long-standing pattern.
How we uncover the truth in complex financial abuse cases
High-net-worth finances require careful and sophisticated investigation and discovery. When financial abuse is suspected, I work collaboratively with a team of forensic accountants to find the assets, find the hidden income, unpack the spending and come up with a settlement that targets these issues. We discover, depose and prepare.
These investigators help us:
- Trace funds across multiple entities
- Reconstruct incomplete or altered records
- Identify hidden accounts or transfers
- Analyze RSUs, bonuses, and deferred compensation
- Evaluate business cash flow when financial information is withheld
- Apply the DeJesus formula to determine the marital share of equity awards
You do not have to do this alone. You need trusted professionals who can advocate for you and obtain a clear picture of your finances.
What to do if you recognize these signs
You do not need to confront anyone to begin protecting yourself. Start quietly gathering what you can, such as tax returns, bank statements, compensation documents, or closing papers. Even limited information is valuable.
Schedule a consultation with a trusted attorney so you can start to protect yourself and your children. If financial abuse may be occurring, you deserve information, protection, and a plan.
If you have questions about financial abuse, complex compensation, or hidden assets in a high-net-worth New York marriage, contract a trusted New York family attorney and schedule your consultation.
Most importantly, stay emotionally and physically safe.
Lisa Zeiderman, Esq., CFL