Financial Abuse, Narcissists & Money: A Divorce Lawyer’s Perspective

What is financial abuse? What are examples of financial abuse? Financial control can be part of a nefarious plot and key part of making the victim feel impotent, dependent, and isolated. Because financial abuse is so damaging, it must be addressed in the divorce. Why does financial abuse happen? How do you identify financial abuse in a relationship?

For more information, see Divorcing the Narcissist.

Whether the pain inflicted on a spouse is physical, verbal, or emotional, domestic violence brings sadness, grief, and fear to families and communities.  Domestic financial abuse may be less talked about, but it’s just as frequent. In fact, many domestic violence victims also suffer financial abuse. This makes it even harder for them to escape an abusive situation. Financial abuse can be devastating to the victim and the children.

Financial abuse is something every divorcing spouse should know about. The damage can be extensive and must be brought to light in court.
With assistance of counsel and an expert financial investigator, the playing field can be leveled for a fair and equitable outcome in the divorce.

WHAT IS FINANCIAL ABUSE?
Financial abuse is the use of finances to threaten, frighten, manipulate, and control the victim. Control is power. As with other forms of domestic abuse, the abuser dominates the other spouse. Most victims are women. And financial abuse can ruin the victim’s life. Financial abuse is not limited to controlling the other spouse, it’s used against the children, too. Unfortunately, financial abuse is not a rare event in divorce.

Understand. There’s a difference between spouses agreeing that one of them is better suited to managing the monthly bills and budget. That’s not what I’m talking about. Financial abuse goes way beyond keeping track of budgeting concerns.

Financial control can be part of a nefarious plot and key part of making the victim feel impotent, dependent, and isolated. Financial abuse is economic and psychological. The victim knows little about their personal finances.  Because the controlling spouse is so secretive, some victims never know the extent of the abuse. They just know they’re trapped. At first, there may have been a rational basis for one spouse taking primary responsibility for overseeing family economics. But the relationship morphed into an abusive one.

Financial abuse happens at all ages, educational levels, ethnic groups, and income levels. A gilded cage is still a cage. That’s because domestic financial abuse is about control. It’s an insidious trap.

Financial abuse may or may not be the only form of abuse and can further trap the victim in an abusive marriage. Financial bullying isn’t always obvious either. It can be “in your face” or hidden along with secret assets.

Because financial abuse is so damaging, it must be addressed in the divorce. The victim cannot be left at the mercy of the dominant spouse or without economic options. When the dominant spouse has controlled their finances for a long time, possibly the entire marriage, the threat that “If you divorce me, I’ll make sure you never get a dime,” has a profound impact. That threat can dissuade the victim from consulting an attorney and getting help. The victim of financial abuse may find it impossible to leave and find new housing. Or to support the children and obtain legal representation.

WHAT MOTIVATES THE ABUSER?
Why do some spouses feel the need to be in absolute control of the family finances?  Some fear being broke.  It can be rooted in culture or religion.
Some have personality disorders, such as narcissistic personality disorder.  Someone with NPD lacks empathy and has a sense of entitlement, among other characteristics. Whatever personality type the abuser might be, he or she is typically calculating and manipulative.

WHAT TO LOOK FOR
Clues to financial abuse all stem from the need of one party to be in control. Financial control could include using legitimate financial tools designed to prevent fraud, for the abusive purpose of tracking the other spouse. Allowing continuous auditing and monitoring. For instance, using online banking to track the victim’s deposits and withdrawals on a daily basis. Cyber-stalking, spying, and cyber-harassment can accompany financial abuse. Tracking the victim’s social media posts and pictures. Spying on the victim’s emails. And using apps to track the victim’s whereabouts 24/7.

Here are some examples of things the controlling spouse may do to the victim:

• Conceal assets to prevent an equitable property division in divorce.
• Dole out small amounts of money as an allowance (or no money at all).
• Make the victim account for every nickel spent.
• Make the victim sign legal papers without knowing what they are.
• Steal the victim’s money.
• Take the other spouse’s paychecks without discussion or explanation.
• Prevent the victim’s career advancement. Even sabotaging employment by making the other spouse miss work.
• Object to any cash paying job because the victim could keep some of the money.
• Making it more difficult for the controlling spouse to track every penny.
• Prevent the victim from working outside the home.
• The abuser may keep the other spouse in absolute darkness as to marital resources and debts.
• Prohibiting the victim from using credit cards, writing checks, and accessing marital accounts.
• Criticizing and demoralizing the other spouse for poor spending habits, wasting money, and stupid purchases.
• Accusing the victim of wasting marital resources on a paramour, on gambling or a drinking problem. Even when there’s no basis to the allegation (or it happened once over a decade ago.

Lack of communication is an issue for many couples facing divorce.  But the controlling spouse may never discuss finances with the victim. Financial abuse can include putting the victim in a position of never being believed. Always made to look small and incompetent. As the years of financial abuse go on, the more persuasive this statement is. The victim really has no idea what is going on.  It’s a self-fulfilling prophecy.

• Financial abuse can involve keeping the other spouse’s name off the title to marital property.
• Making the victim serve as the sole source of family support. Even when the abuser is able to work.
• Making the victim retire early on Social Security. Or pull money out early from an IRA, 401K, or pension. Despite the penalty for early withdrawal.
• Abusive behavior includes paying the bills by using all of the victim’s separate money first.
• Damaging the victim’s credit score when he or she doesn’t control bill payment.
• Holding the purse strings, but not providing sufficient funds for necessities like food, clothing, medicine, and decent housing.
• And purposefully delaying court proceedings to make the victim suffer while waiting for family support orders and property division.

Financial abuse can also involve:

• Gambling away the other spouse’s money.
• Spending marital resources to maintain a drug or alcohol abuse problem.
• Or supporting a paramour with marital funds while denying necessities to the victim and children.

CRIMINAL

Financial abuse can be criminal, too. As with fraud, embezzlement, and extortion.

• For example, using an extramarital affair to extort money from the victim’s professional practice.
• Embezzling money from the family business and threatening to blame the theft on the victim.
• Or forcing the victim to commit financial fraud, another form of abuse. An example is forcing the victim to defraud Social Security for disability benefits or food stamps.

PROVING FINANCIAL ABUSE IN COURT

How is financial abuse proved in court? Divorce proceedings involving property division, alimony, or child support, should bring any financial abuse to the forefront.

Proving financial abuse can be challenging.  Full disclosure of assets and debts is required of both parties in the early stages of divorce.  A forensic accountant, an expert witness, may be needed to identify document anomalies, incorrect valuations, and concealed assets. The controlling spouse may argue the victim is bad with money. Pointing to something that happened a long time ago as proof of incompetent money-handling.
Because of the abuse, the victim is fearful of discussing anything related to finances with the controlling spouse. Therefore, it’s important to obtain victim testimony describing the abuse and how incompetent, bad, or weak it made the victim feel.

It’s important to provide documentation of the abuse. Assets hidden by the controlling spouse could be discovered by a forensic accountant’s valuation of assets, lifestyle analysis, and other techniques. That’s along with a private investigator’s involvement in the case.

Documents, correspondence, emails, and text messages can show the controlling spouse’s abusive tactics. This can prove the victim was denied access to credit card accounts, bank accounts, investment accounts, and so on, when those accounts are marital in nature. Marital accounts are not legitimately the controlling spouse’s sole and separate property.

Witnesses may also testify to what they know firsthand. Such as a sibling who has seen the controlling spouse berate the victim about spending a small sum of money on something insignificant.

What should you do?

Any relationship has the potential to involve financial abuse, that’s how prevalent this is. If you believe you’re the victim of financial abuse, then you need to take steps to secure your marital rights. Get safe. Get counseling. And get financial advice. Understanding the scope of the financial abuse is the first step in obtaining an equitable and fair outcome in the divorce.

To extricate yourself from a financially abusive marriage you need to retake control of your finances. This means educating yourself and financial planning. Learn what your legal rights are by consulting a competent divorce attorney. This could involve tagging specific incidents of abuse so the case for recovery can be made in court.

Whether you plan to remain in the marital home or leave, you will need to gather important documents and records. Make copies and store them in a secure place that’s inaccessible to your spouse. Has your spouse hidden all the important documents and records from you? Get what you can safely. Financial forensic analysis will almost always be helpful to ferret out the facts.

MANDATORY INJUNCTION
When the divorce complaint is filed, Tennessee’s mandatory injunction goes into effect. Among other things, the injunction prohibits either spouse from transferring, diminishing, selling, or doing things that affect marital assets and debts. Violating the order can lead to a finding of contempt with sanctions.

If your spouse attempts to sell property, hide assets, or do anything that violates the injunction, tell your attorney about it immediately. Not only can this result in sanctions and jail time for the violator. But the court will likely scrutinize the violator’s demeanor and character for truthfulness during the rest of the proceedings.

Please like and share this video. Let’s get the word out about this problem.

View our series, The Complete Guide to Divorcing a Narcissist:

1. Stages of Divorcing a Narcissist
2. Divorce with Narcissistic Personality Disorder
3. How To Divorce a Narcissist and Win
4. Financial Strategies for Divorcing a Narcissist
5. How to Negotiate a Divorce Settlement with a Narcissist
6. Divorcing a Narcissist with Child Custody Disputed
7. Divorcing a Female Narcissist

More resources on Divorcing a Narcissist:

1. Divorcing the Narcissist – Our original post describing the clinical definition and general introduction.
2. Financial Abuse, Narcissists & Money: A Divorce Lawyer’s Perspective – Mason’s popular video sharing his experiences and thoughts.
3. Divorcing a Narcissist: Six Family Lawyers’ Advice – Six nationally recognized family lawyers discuss their experiences and advice.
4. Finding a Divorce Lawyer Who Can Handle Opposing a Narcissist – Mason’s thoughts on what divorcing spouses should look for.