Financial Abuse: What It Is & Why It Matters in Divorce

Divorce is a difficult process, made even more challenging if one of the spouses is involved in financially abusive behavior. Below, we will discuss what financial abuse is and how it can affect your divorce case.

What Is Financial Abuse?

Domestic violence encompasses an array of tactics, from emotional intimidation to outright threats and psychological mind games, all wielded to gain or retain power over a partner in a relationship. Acts of domestic violence can fall into different categories, including emotional abuse, sexual abuse, physical abuse, and financial abuse.

Financial abuse, also known as financial exploitation, is a form of domestic abuse. It can be defined as the use of a person’s money or finances without their knowledge or consent in order to gain power and control over them.

This type of abuse is often overlooked because it does not involve physical violence or verbal abuse. Unfortunately, financial abuse can be just as damaging for victims as any other form of domestic violence.

Signs of Financial Abuse

Financial abuse is often difficult to spot because it may appear in many different forms.The first sign of financial abuse is when someone takes control over all aspects of a person’s finances without their consent. This could be anything from taking away access to bank accounts, withholding money, or refusing to allow someone to work or earn an income. Other signs include:

  • forcing someone to use their credit card or loan money without giving anything in return;
  • making threats if the victim does not comply with the abuser’s demands; or
  • using intimidation tactics when discussing finances.

Financial abuse also includes using lies and manipulation tactics to convince the other person to do what they want them to do financially. For example, they may tell the victim that they won’t get any money until they do something specific like opening a bank account in their name or signing up for a credit card. Or they may say something like “If you don’t do xyz then I won’t give you any money this month."

The impact of financial abuse not only wreaks havoc on an individual's mental health and wellbeing, but also effectively traps them in a situation where help is difficult to attain. These tactics are designed to make the victim feel powerless and dependent on the abuser for financial support.

The Impact of Financial Abuse on Divorce Proceedings

Financial abuse can have a significant effect on divorce proceedings, from determining who gets what assets to child support and alimony payments. When one party has been financially abused by their spouse, that party may have had limited access to marital funds and/or a limited understanding of the property/assets both parties have.

While an attorney can help you subpoena information about separate and marital property, if one partner has been controlling the finances throughout the marriage, this person may be able to hide assets or money that should be divided in the divorce settlement. This could involve:

  • setting up offshore accounts,
  • funneling money through businesses they own,
  • or shifting assets into trusts and other accounts that are hidden from view.

If you have been financially abused, you should make your attorney aware as they can connect you with a forensic accountant or other experts who can help with your case. A forensic account can uncover hidden assets and help with financial aspects of your divorce, and other experts like private detectives and asset appraisers can also be of great help.

Financial abuse also affects child support payments due from either parent if there are children involved in the case. A financially abusive parent may attempt to avoid paying child support by hiding income or refusing to disclose certain financial information relevant to calculating payments owed by either parent under state law requirements.

However, experienced family law attorneys can help you take action against someone attempting to avoid paying child support arrears. They can work to uncover evidence of hidden income or other financial misconduct during the discovery process of your case.

California Law Concerning Financial Abuse

California courts are taking a firm stand against domestic violence with a groundbreaking new law implemented in January 2021. This legislation, under California Family Code § 6342.5, targets individuals who financially abuse (or abuse in any way) their spouse or partner, ensuring that they are held accountable for their actions. By allowing the court to mandate restitution for loss of earnings and other expenses, this stride towards justice marks a decisive move in tackling abusive behaviors within marriages professionally and effectively.

Experienced Divorce Attorneys

It is important for victims/survivors of financial abuse to understand their rights and seek legal help if they are being taken advantage of. With the right guidance, victims of financial abuse can get the justice they deserve in divorce proceedings.

The attorneys at The Neshanian Law Firm, Inc are backed by decades of collective legal experience. If you have suffered from financial abuse, we are here to help you understand your legal rights and develop a personalized legal strategy. When you retain our services, you can trust that we can work tirelessly to help you protect your interests.

Learn more about how we can help you by calling (949) 577-7935 or completing our online contact form today.