Financial Abuse in Divorce What Most Attorneys Miss

(Transcribed by TurboScribe. Go Unlimited to remove this message.)

Hey, everybody. Welcome back to the Dominate Law Podcast, where we empower attorneys as entrepreneurs. I'm your host, Don Adesha.

And today's episode is one every family law attorney needs to sit with, because behind so many divorce cases that look like ordinary conflict over money, there is a very different story hiding in plain sight, a story about controlled fear and restricted autonomy that most intake processes never surface. Before we get into it, a quick word about our sponsor, Equa Marketing. Here is what runs underneath this conversation.

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Across four pillars, we look at the patterns that separate control from disagreement. The intake questions that surface risk earlier, the financial and legal strategy shifts these cases demand, and the professional team every attorney should have on speed dial to guide us three of the most experienced voices in divorce financial planning. Lily Vasilev, President of Wealth Protection Management, Certified Financial Planner, Master Analyst in Financial Forensics, and author of four books on divorce.

Leah Hadley, Founder and CEO of Intentional Wealth Partners and Intentional Divorce Solutions, nearly 20 years of financial services experience. And Stacey Francis, President and CEO of Francis Financial, Certified Financial Planner, Certified Divorce Financial Analyst, and founder of Savvy Ladies. Let's dive in.

In our own family and have normalized it completely. So when we start to just open up and kind of unpack these conversations, we can start to acknowledge, hey, there are some other ways that we could be thinking about these things. Appreciate that, Leah.

Stacey, how do you decide between moving quickly for protection and slowing down to recover missing financial records? Well, every situation is different. And, you know, the most important thing is your physical safety. You know, that's that's really the most important thing.

I've worked with a lot of clients who are in abusive situations and they have, quote unquote, complied and stayed in the situation until they feel like they have as much information as they can garner. Assuming, assuming that they still feel like they're in a safe place. So one client I'm thinking of that I'm working with right now, there was not physical abuse, but there was financial abuse.

When she came to work with us, she had taken pictures on her phone of hundreds of documents, not really knowing what they were. And it was about 300 photos. And that was fantastic, because what she did is she took pictures of the tax return.

She bank statements, credit cards, retirement accounts, life insurance, anything that came to her in the mail or was there available. Over time, she was able to collect a huge amount of information so that when she went into this process, we were able to move forward more quickly by being able to name the assets we knew, which was significant because the statement of net worth that was provided by the husband missed about 18 different financial accounts. And we knew that they were there because we actually had had pictures.

And again, our client didn't know what a lot of these things were, but like even like asking about a premium for a life insurance policy, she didn't know. Now, what I can say is that the more information you have going into a divorce, the more likely you are to get complete information, but it's not worth risking your safety. My grandmother was killed by my grandfather, and she was in a domestic violence situation.

She's the perfect example of a woman who was trapped financially and was not able to leave. And she lost her life because of that. So what is most important is your health, also the health of your children.

Because she stayed, my father was abused as well. And there's no fault and there's no blaming. It's not easy to leave these relationships.

But when you're working with a client that is in this type of situation, you do want to make sure that they can leave in a safe way and that you can help them with some of the support systems to get them out and to be protected. Can I just make one quick comment, because that's such a powerful story. We need to be clear that we understand the impact of working with these individuals.

We only see them for X period of time. They have the whole outside to deal with. And when we propose things like get a separate email or set up a bank account or get your own card, you know, that could be very dangerous for them.

So to your point, Stacey, physical safety and security should be paramount whenever we talk with these individuals. Thank you very much, Stacey. Lily, what separates a financial abuse case from a difficult but typical divorce case during that strategy planning? OK, so financial abuse is very different than just a high conflict divorce.

A high conflict divorce is when people are engaged in endless legal battles or disputes or intense disagreements or there's a lack of cooperation or they just go at it over custody or finances or whatever it is. Right. And that's so traditionally adversarial, should I say.

Financial abuse is a very different situation. It's where behaviors use financial control as a threat, a threat to either the well-being of the spouse or their children or their families even. And it's sometimes less overt at the outset to all of us as professionals.

But as both Leah and Stacey were commenting, financial abuse is about control. It's a leading indicator of domestic violence. It's dominating, manipulating, using guilt or fear or past abuse to push identities are completely taken away.

And they're in a divorce from a very different place than a high conflict divorce, where these two might be equally empowered and they're just going at it. This is a complete imbalance of power. I think you said that, Leah, where you have a spouse that is truly in a place of desperation and dire straits, and they're coming at this with very little resources, very little control.

And sometimes it is masked by this facade of compliance, which Stacey talked about, or someone who simply is agreeing to get through it, to get to the finish line so they can be free and free of this or what they think they'll be free. So it's a very different situation. Oops.

Lily, what should the council do when each spouse accuses the other of financial control? Have there been times you've seen this? Um, it's an interesting situation. And again, it is case by case. And it also depends on sort of the legal process.

I mean, if you're in mediation, you're a little bit more at risk because there's no compelling force behind you to produce documents. It's a voluntary process, right? And that leads to a very different kind of strategy by financial abusers altogether. But in the sense of looking at how to weigh what the strategy is on this intake and really work with these individuals, I think you have to measure whether or not there's an opportunity to deal with the controlled spouse on a private basis for some period of time to do that more gentle but intense intake and screening to see whether or not their compliance is compliance to get through this divorce or if it's the real key to a financial abuse case.

And I think everything that Leah was commenting about earlier really plays into that. How sensitive you are to listening, how you pick up on financial cues, I mean, not financial, physical cues, and just really measuring the pace of what's happening in front of you. And it takes a lot to do that, to be patient with it.

As well as knowing those particular signals, what you're looking out for, right? Absolutely. Thank you, Lili. Leah, how do you balance client autonomy with urgent interventions when money access, housing, or safety is unstable? Well, first and foremost, like Stacey, I think, Emily commented on as well, physical safety has to be the top priority.

So we always start there. And, you know, potentially bringing in a domestic violence advocate can be a fantastic resource depending on the nature of the situation and whether or not that's a resource available in your particular geography. But that can be tremendously valuable in helping kind of figure out what is the right pace in terms of developing that autonomy and really giving that support that might be needed.

You know, obviously, there's some legal strategies that really need to be considered. You know, for those who reach out to us first before reaching out to an attorney, I always, always encourage if there's any inkling that there might be financial abuse involved, that they immediately consult with an attorney and get somebody on their team. Because a lot of times we do need to file temporary support.

You know, we need to get funds in hand to be able to actually have them be able to have some autonomy. I mean, one of the things that's really hard about these abusive situations is they are so often isolated from their friends and family. And so there's often not somebody they can easily reach out to in order to ask for support, or at least they have come to be conditioned to believe that there's not somebody who they can easily reach out to for support.

And so making sure that whatever legal process needs to take place in order to prioritize basic needs, nothing else can happen. Nobody can think clearly if their basic needs are not taken care of. And so it's really critical that, you know, especially if they're working with a financial professional, a lot of times they do reach out to us first, that we can really collaborate as a team with their attorney to make sure that, you know, whatever motions need to be filed to get them protected and secured, that that is definitely going to be the top priority.

Leah, what if the client declines the team's strongest recommendation despite these obvious risks? You know, that happens. That happens probably more than I would like. But here's the thing.

I think it's really important to recognize when somebody's been living in a situation like this, and oftentimes we're talking for decades. Yeah, sometimes it might be months or years, but a lot of the cases that we're seeing, this has been going on for decades. And so this isn't something that, you know, this person is taking lightly in terms of making this decision to come out of this situation.

And I respect whatever timeline they are on, even if it doesn't agree with my advice. I think they've had enough people in their lives, enough of a person in their life who's really trying to control them. Sometimes it's whole families that we see, you know, financial abuse and controlling situations.

And so I'm certainly not going to add to that, right? And so recognizing that this is an individual who is facing the next chapter of their life. And if they decide to go against advice, acknowledging that, you know, you're trying to provide the best advice that they can, but you absolutely respect their decision. Appreciate it.

You know, often it takes time, though, too. I mean, they listen to you and they can't absorb it until much later. And then they kind of revisit it gingerly to come back and ask you the same questions over and over again, right? It doesn't happen.

Yeah. And I think that knowing that sharing your door is always open. The woman that I was speaking of, we met over five years ago.

Yeah. And there was a process that she had to go through to be ready mentally and physically to go through the divorce because she knew it was going to be very difficult, which FY it is. And, you know, understanding that we are here, we are here to support you, giving as many resources as we possibly can to them so that they feel comfortable coming back, that this is a journey and everybody has a different timeline and that's OK.

And wherever you are in that timeline, we are here to embrace you. We are here to hold you up because there's also a lot of shame with the person who's being abused feels. And when I always think of abuse, I think of my grandmother.

I think of a woman. But I want to tell you that is not always the case. We have a lovely gentleman who was financially abused by his breadwinning, earning, high-powered wife, who is still recovering.

And so realizing that often we, I think of women, many of us think of women, but we see this, men and women, and also we see this in same-sex marriages, too. I'm glad you said that because I think people forget that, that it's not really gender biased. It can happen.

And I think men are almost more afraid to even admit it to themselves. 100%. And that's a really hard place to go for these individuals.

I mean, everyone going through a divorce needs time to really prepare themselves to go through it. But this is a whole different level, right? I mean, financial abuse is an entirely different level coming through this process. And I think if you give them baby steps to test whether or not they can actually act for themselves is really helpful.

Change your password, create a new password, or have a new email. It's like, I never thought of that. I don't know if I can do that, right? Give them little tiny steps.

And maybe in the five years they come back and they go, you know what I did? I opened a bank account, like, oh my God. Okay, great. But it helps.

It helps to have them feel like they can make a little bit of progress until they're really ready. I just want to quickly add because you guys were mentioning how it isn't gender specific. It's also across socioeconomic classes as well.

And I think that's really important to remember. It really truly happens everywhere, across races, cultures, everywhere. And I think a lot of times there are misconceptions around where we may see financial abuse.

I actually had a case that was very high net worth case. This goes on a long time ago. And this woman had no money, literally no cash, no cash at all.

She was given credit cards. And to get cash to pay for the professionals, to retain them for her divorce, she would take back all her designer clothes. This used to be when you could get cash back for returning things by credit card purchases.

And she started doing it that way. I mean, you don't know. You really don't know what's under the hood in anybody's life until you get to talking with them.

Love, love this discussion. Thank you very much. Really, what a wonderful discussion that was.

Right, before I share the next opportunity, consider this. If someone experiencing financial control visited your website tonight, would they immediately understand that your firm recognizes what they're going through? That's a good question. Right.

Now, earlier we looked at what financial control client needs once they enter your firm. But before that happens, they have to find you and feel confident enough that you understand what they're experiencing, like the cases that Lily, Leah, and Stacey have mentioned. And that is where Echo Marketing can help.

For more than 18 years, Echo has helped professional practices strengthen their online visibility, website trust, content, and path from inquiry to consultation. As a thank you for joining us tonight, Echo is offering family law firm owners and managing partners a complimentary 60-minute marketing strategy session. Before the meeting, the team will review your current digital presence.

During the conversation, you will identify where right fit clients may be failing to find you, losing confidence, or dropping out before consultation. And you will leave with the clear priorities for what to improve next. There is no cost, no obligation.

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Right. Thank you very much. Let's come back to our conversation.

In fact, we will get into a bit of a ask me anything session here. So if you have any specific questions, go ahead and drop them into the Q&A box, or you can even use the chat. It's just that the chat is a little bit busy sometimes.

But nevertheless, we appreciate your engagement. We're just going to pause here for around 10 minutes and address some of the concerns that have been raised from our attendees and registrants. So I actually picked out a couple of questions from our registrants that I would like to prompt now.

Okay, here we go. This is a free for all. Please feel free to join in.

Lily, Leah, Stacey, no problem. Kim Brown asks, when a spouse may be hiding income from side jobs, what discovery and financial analysis steps help the council build a fuller picture? Lily, maybe you can start us off on this. Good question.

It said cash, correct? Okay. So one thing is that I think spouses underestimate their own ability to target what should be looked at. So for example, if you know your spouse has other jobs and is taking in cash, one, you can... Lily, they mentioned income, so cash and maybe other lines as well possible.

Okay. So I look for deposits. I look for cash in the house.

I follow somebody if you need to to find out where they go when they are supposed to be working somewhere or you don't know where they are. It's always trickier, but it's not impossible, right? I mean, that's the good news. And I think the more you are aware of your other spouse's behaviors and perhaps even spending, where are they spending it from? I mean, where do they get the monies to spend? You've raised the red flag.

You say, hey, this guy went out and bought a boat and we have nothing. So how does that help? Okay. Stacey, Leah, do you have anything to add to that by any chance? Go ahead, Leah.

I was just going to add that, you know, we're always looking at if there's a mismatch, right? So, you know, like Lily just said, like if there's a random boat, right? If there is spending, but there's no income, then there's some missing piece of the equation. And so then we solve for that missing piece of the equation. But we definitely look at both sides because sometimes it can be hard to figure out exactly what's going on.

And sometimes the spending actually gives us a lot more clues to be able to dig deeper. Yeah, no, Leah, 100%, you know, and I just sold my boat two weeks ago. So I know very personally how expensive boats are.

But yeah, looking at the lifestyle, and that's something that all of our clients can do is really try and track, you know, the money that's going out and trying to get a handle on that. Because based on the money going out, there should be a good amount of money coming in. And also, I'm sure Leah and Lily loves this too, of just looking at the tax return.

You know, the tax return, I feel like is one of the documents that it doesn't get as much credit as it really should. Because you can see money being taken out of accounts, sales, additional dollars that might have been sold from cryptocurrency or, you know, receiving crypto for income. You can see distributions from IRAs, from pensions, annuities, you know, rental income.

There's just like a treasure trove of information. And you can request that tax return directly from the IRS so that you know you are looking at the actual real document. Because we are seeing more and more cases where the tax returns that have been submitted by opposing counsel have been made up, and it's not the lawyer, it's the client that is doing that.

So as long as it's a joint tax return, you can get that directly from the IRS so that you can make sure that you get all that information. I'm just looking at the questions in the chat box. I think the spending side of it is going to point you to whether it's being paid for or it's being paid for through debt.

And that's the other side to it too. They could have any number of different credit cards or friends that lend them money, etc. But if you're looking for income and you know it's being paid for by from income, then definitely track the spending.

Okay. So there is a question here in the chat box that goes a bit like this. I'm in a financial abusive marriage.

I'm in the process of getting ready to file for divorce. I have returned to school, got my degree, and would like to open my new business. How do I navigate that while filing for divorce? Leah, perhaps you can start us off on this.

Sure, I would be happy to. First of all, good for you. Sounds like you have a lot of things going on, which is amazing.

And you're setting yourself up for a wonderful next chapter, which is fantastic. I always focus first and foremost on foundation and making sure that you feel like you have a really strong foundation. And so for some people, and I don't know the specifics of your business, that might mean taking that very slowly to allow yourself the time to really build the strength of that foundation.

For some people, you may have a background and be ready to dive right in, and that's fantastic. But I think it is important to acknowledge that divorce takes an incredible amount of time and energy. I think most people underestimate the time and energy that's required to get through the divorce process and that we have to be very realistic with ourselves around our own capacity and setting ourselves up for success going forward.

And that's about knowing yourself and knowing what your limitations are and where you are, what season of life you're in and all of that. But it sounds like you're making amazing progress and I think that's fantastic. But that would just be kind of my thought is maybe just make sure to slow down enough that you feel really confident in every step that you're taking.

I would just jump in too, Leah. That was so beautifully spoken conversation. What money access issues need surfacing before payment, billing or document requests begin? Well, you know, taking money from a credit card, a checking account, that actually can be a very dangerous situation.

There have been many, many times where I am paid with cash. And just so you know, I take and I deposit the cash legally into the bank account. I very gingerly and very carefully walk to the bank.

So, or a family member will give them a loan as well. These are all important things because if there is financial abuse, that spouse is monitoring all of the expenses from credit cards, from checking accounts, even ATM withdrawals. So that is something that I would talk to the professionals you're working with, many professionals, including myself, instead of a large retainer, because that's just not possible in the beginning.

We do with with.

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