How to Spot Financial Abuse by Anthony Viola
One of the most difficult roles we serve as accountants, is to “mediate” financial matters as it relates to spouses, partners, and other emotionally tied relationships. While the safe and the correct way to handle such matters is to just tell the truth and to give our honest assessments of the situation at hand, we also have a responsibility to bring compassion and understanding into our presentation in delivering the truth.
All too often, as we have seen over the years, one side of the relationship is contributing financially to the household, while the other is either contributing little in the way of dollars, or not at all. This, in of itself, does not create the problems that relationships may face. The issues occur when one is contributing, and one is not only not contributing, but taking advantage of the financial availability to spend. To be clear, the contributor of the finances to the household can also be the abuser of the finances as well. This is the crux of identifying what is reasonable and recognizing what is considered to be abusive.
Here are some “red flags” that might indicate financial abuse of the relationship’s financial circumstances:
- Excessive spending beyond the household’s monthly income on a continuous basis.
- Spending that appears to be “frivolous” and unnecessary.
- Constant trips to the bank’s ATM, to withdraw cash on a regular basis.
- Lack of acknowledgement that the financial support of the household is coming from one side.
- “Bragging” of how well they live to family, friends, business associates, etc.
- Lack of appreciation for what the household has, as far as assets are concerned, both tangibly (house, furniture, cars, etc.) and intangibly (cash, investments, etc.).
- Lack of appreciation for what the household has, as far as assets are concerned, both tangibly (house, furniture, cars, etc.) and intangibly (cash, investments, etc.).
- No desire to contribute to the household or to help pay for the partners’ lifestyle.
These are just some things to look for in a relationship for possible financial abuse. The steps to correct such a situation is to #1) identify that there is an issue, and #2) try to do something to correct the issue.
The latter is easier said than done. How many times does someone say, “I know what’s going on, but I don’t want to rock the boat.” Clearly a recipe for disaster, financially, emotionally, etc. It usually takes an emotionally strong person to rectify a situation that they know is wrong within their relationship. Financial issues are never pleasant. They can cause long-term financial harm to both partners (increasing debt on a monthly basis via loans, credit cards, etc.) and they can lead to the dissolution of such that relationship.
Getting a financial professional to “interject” is the best way to confront such a terrible financial situation. An accountant, a financial planner, or some sort of professional that is well versed in financial matters, can play “the bad guy” in mediating the issue to, hopefully, an amicable and an attainable result and/or long-term financial plan.
|
© 2019 KVLSM LLP - CERTIFIED PUBLIC ACCOUNTANTS AND ADVISORS - NEW YORK
This e-mail and any attachments are intended exclusively for the individual or entity to which it is addressed. It may be confidential or legally privileged. If you received this
message in error or are not the intended recipient, you should destroy the e-mail message and any attachments or copies, and you are prohibited from retaining,
distributing, disclosing or using any information contained herein. Please inform us of the erroneous delivery by return e-mail. Thank you for your cooperation.
|
