FINANCIAL ABUSE IN RELATIONSHIPS

I stumbled across this article by David Koch and I feel strongly that it is such an important discussion and needs to be shared. 

Sadly what David speaks about in this article is far too common either because one party has placed all their trust in the other partner to manage the finances or as in this article the actions of a partner are clearly financial abuse.  

I have also spoken to several women who 1. had no money of their own and I recall one lady telling me she didn’t have access to any of their accounts or credit card and had to call her husband so he could give a salesperson the credit card details to pay for her purchases or were unaware of the debt the other party had accumulated which is often termed as Sexually Transmitted Debt.

Financial abuse in any family or relationship is a powerful and dangerous form of intimidation which is a lot more common in Australia than you think… not just celebrity divorces.

What makes financial abuse even more insidious is that the abuser often justifies their actions as caring.

But the bottom line is that financial abuse can leave the weaker partner extraordinarily exposed.

This sort of abuse often takes the form of a partner in a relationship, or a parent over a child, or an adult child over an elderly parent where the abuser completely controls the finances of the other person and refuses to share any of that responsibility or information.

Financial abuse could be;

. having sole access to bank and online accounts.

. controlling PIN codes

. taking out joint loans without a partner’s consent

. restricting access to insurance, superannuation and estate planning documents.

. limiting access to cash and credit cards

. making investment decisions without consultation

. asking a person to sign financial documents without explaining what they are.

We’re not talking about situations where a couple has agreed one partner takes primary responsibility for running the finances but is always happy to keep the other partner informed.

A financial abuser is a partner which has insisted on controlling the finances, is secretive about what they’re doing and will not share information.

To test which sort of partner you have simply ask for them to explain the state of your finances, provide access to all accounts and show where insurance and investment documents are kept.

If they refuse, you need to worry.

If they say, “you don’t need to worry about it, I have it all under control”. You should worry.

Explain that you’re concerned if they drop dead you’d have no idea where anything was and that is just too risky and you’re feeling vulnerable.

If they refuse after that, you’re in real strife and must do something about it. Your partner either has something to hide or they have such a controlling personality it will put you at risk in the future.

What if your partner does die… or leaves you?

We had friends where the husband walked out of a marriage and left his wife with the comment “you be nice to me or you won’t get a cent”. They owned a family business but she had no idea where they banked, what they earned, investments, insurances, estate planning… nothing.

We put a team of professionals together to help her and she ended up okay. But she should never have been in that position.

Sexually Transmitted Debt is just one of many risks. It’s where one partner in a relationship is lumbered with the debts of the other. You’d be amazed just how common this problem is.

One partner will rack up debts on the joint credit card, refuse to pay or skip out and the other partner is left with the responsibility of paying the whole debt. Joint cards or loans don’t mean you’re responsible for your half. It means both people are responsible for the whole debt if the other can’t pay.

Here are some steps to protect yourself from financial abuse;

  • Base financial decisions on economics, not emotions. If you trust each other then there is no problem with formalising that trust by keeping each other informed about financial decisions.
  • Don’t dismiss it. Read it. When you have to sign papers it is better to be one day late than to lose everything in five years time just because you were too busy to read the small print.
  • Going guarantor: If the bank does not have confidence in the principal applicant, why should you? Remember, when you sign as guarantor, you are indicating you are prepared to take over the debt if the borrower defaults.
  • Know where the money is coming from and where it is going..
  • If you have a joint account with your spouse, make sure the bank does not allow payments above a certain amount unless there is joint agreement.
  • Look carefully at how you buy assets… single names, joint names, their name, your name? It could all be extremely relevant for both tax purposes and if the relationship splits.
  • If you are a director of a family company you have a right to see the books. Insist on the accountant showing them to you. If stopped from doing so, you can take action under the Companies Code.
  • Agree on a financial plan. This way both partners have common goals and know where they are heading.

In our relationship, Libby has always run the day-to-day finances and I’ve run the investments. But each of us has full access to everything and make big financial decisions jointly.

If you would love to have a quick chat with Jenny about anything, even your favourite wine, click here to arrange a time

Show Me The Money! The Only Way To Mediate Property Settlement.

When couples separate, there are financial issues which need to be discussed and resolved. Usually issues regarding payment of expenses, income and property. Some are urgent and need immediate attention and others are longer term decisions about how to separate the financial arrangements on a permanent and final basis. Making these decisions can be emotionally draining and complex. This is where the mediation process can prove extremely helpful and mutually beneficial. Negotiating property and financial matters can be stressful and overwhelming especially where there are short term financial pressures to pay bills and conflict about how to fairly distribute any assets. It can even be distressing if the other person has been in control of the finances and you feel in the dark.

Here are some things to think about to prepare yourself for the mediation process regarding money.

  1. Make a list of all your bills that are coming up.
  2. Even if you can’t prepare a cashflow of your family and personal expenses and when they fall due just make a list of all the expenses you know about on an annual, monthly and weekly basis. Mediation can address the urgent issues first so that everyone has peace of mind to focus on the long term division of the property.
  3. Identifying what is included in the property pool.

Property of a relationship will include:

All assets (things you own) held by you and your former partner in joint or separate names such as:

  • Family home, holiday home or rental properties
  • Investments like shares and companies
  • Cars and boats
  • Furniture and household effects from stereos to cups and saucers that you want to keep
  • Personal items like jewellery and musical instruments that you want to keep.

All assets in your own or your former partner’s control such as:

  • any business, company or trust
  • superannuation
  • a share in an extended family business or investment property.

All debts in joint or separate names such as:

  • mortgage debts
  • credit cards
  • hire purchase agreements.

It needs to include everything including any property held in your own name prior to entering into the relationship, or property you have acquired since separation.

Negotiating the division of the pool by way of a property agreement.

The best way to divide your assets is through a mutually negotiated property agreement in mediation. This allows you to be part of the decision making process and helps to minimise the cost of lawyers and avoid a negative outcome through court. It will be much quicker and less emotional for you and your children, helping you to move on quickly with less to deal with.

Think about your main concerns and wishes about your property division, consider who has contributed what to your property and life together and your personal future financial needs right now and tomorrow for you and any children. Your mediator will ask you questions about your financial circumstances and financial needs. You will need to prepare for the joint session of mediation to resolve your property agreement. You may wish to break it into separate parts or deal with everything on the one day. How that is done will be designed by you with the mediator. The preparation will involve further gathering of information, exchanging documentations and starting to weigh up your options before the joint session.

Formalising the agreement to achieve a property settlement.

Once you have agreed on how the expenses are to be paid and a property settlement it is still the law to have the financial agreement legally formalised. It is not generally possible to change your mind and seek a different property agreement once it is done and dusted. Once you are satisfied with the outcome, you can sign the financial agreement as a Deed or file the documents with the Court if you are signing Consent Orders. This is the milestone to moving forward.

Reaching a mutually agreeable property settlement should be your main aim when you attend mediation. Approaching your mediation with an open mind and an attitude of willingness to reach an agreement will assist the process of settlement to progress with as little angst or as few roadblocks as possible. No one wants the issues of a financial arrangement to be more difficult or emotional than it already is, so with preparation, co-operation and some thought concerning your part in the process it will go a long way towards reaching the agreement which is mutually beneficial and helpful in moving forward without Court.

Is it time to get creative about how you mediate your money disputes?
Contact SHAW Mediation and let’s talk about how we can help you.

Shaw Mediation Services

Level 36 Riparian Plaza
71 Eagle Street
Brisbane QLD 4000
Phone: 1300 768 496
mediate@shawmediation.com.au

Level 30/91 King William Street
Adelaide SA 5000
Phone: 1300 768 496
mediate@shawmediation.com.au

Level 26, 44 Market St
Sydney NSW 2000
Phone: 1300 768 496
mediate@shawmediation.com.au