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Ten years have passed, and Lisa*, now 60, still asks herself, Why didn't I see it coming?
At the time, she and her husband, Andrew, were living well: a spacious home in a Chicago suburb, overseas travel, a kid in private school.
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For more than 15 years, Lisa, a successful doctor, had trusted the family finances to Andrew. Money was her husband's domain, she made clear to their financial adviser.
Divorce lawyers and a fraud expert share tips for spotting financial infidelity
William Beslow, attorney (Clients include Nicole Kidman)
"You suddenly see that bank account statements are no longer being sent to your residence. Or your spouse has established a post office box to which credit card statements are being sent."
Raoul Felder, attorney (Clients include Rudy Giuliani)
"If the financial statements come in and he says, ‘I'll take care of it.’ I can see the husband not wanting to give a wife anxieties about money … but you have to let everything [be seen]."
Laura Wasser, attorney (Clients include Angelina Jolie)
"Your spouse doesn't let you have contact with your accountant. You would be absolutely floored to know how many people I have seen in their 50s who have never signed a tax return, yet they've been filing joint tax returns for the entirety of their marriage."
Pamela Meyer, fraud examiner (Author of Liespotting)
"Your passwords are changed for your online accounts and your spouse doesn't tell you."
Donald Schiller, attorney (Clients include Robert Pritzker)
"Things that are out of the ordinary. Unusual transactions you wouldn't be expecting, such as large cash withdrawals, or if your spouse sets up new accounts in their name alone."
— by Emily Paulin
Which is probably why that adviser waited until their finances were a dumpster fire before he called: “Lisa, do you know what your husband is doing?” Andrew had spent huge chunks of their savings on cars, guitars and charitable gifts. He had borrowed against their home and run up $250,000 in credit card debt. Very quietly, he had nearly wiped them out.
Deceits Partners Admit They Commit
24% Hiding purchases or receipts
23% Lying about a price paid
22% Spending money on children behind a spouse's back
19% Saying a purchase was on sale after paying full price
11% Secretly withdrawing money from savings
11% Secretly getting a new credit card
7% Covering up debt
4% Hiding a raise or bonus
Source: “Financial Infidelity in Couple Relationships,” Journal of Financial Therapy, 2018. Subjects were 414 partnered U.S. residents.
Lisa divorced him. The two remained civil. But last year Andrew went to Lisa with a request. He had $60,000 in credit card debt and might have to sell one of his prized guitars. Could she spare some cash to tide him over?
"My jaw was on the floor,” Lisa says. “I thought, Can I divorce him again?”
When we think of infidelity, our minds go straight to the bedroom. But infidelity can hit the pocketbook and wallet, too, when one spouse spends, borrows, withholds or hides money without telling his or her partner. Such financial infidelity can damage a marriage just as much as the sexual type, if not more so. As one woman, 70, recalls about going nuclear on her husband for secretly borrowing tens of thousands of dollars: “He said to me, ‘Don't I get credit for being faithful to you?’ And I said, ‘No! I would have much rather you had sex with an intern. At least that I would have understood!’ “
You may think that the older you are and the longer you're married, the harder it is to hide a big financial secret. But no: A recent major study in the Journal of Consumer Research — one that surveyed people ages 19 to 83 — found similar rates of financial infidelity among young and old. (Infidelity was consistent across genders and wealth also.) “I just spoke to a 61-year-old client whose husband of 28 years quit his job and traveled with funds he had moved from their joint investments to a PayPal account in his name,” says Jan G. Valecka, a financial planner in Dallas. “He also inherited money from his mother in 2015, and my client never knew."
Technology has made financial infidelity easier, says Indiana University marketing professor Jenny Olson, coauthor of the new study. Mobile banking can be done with no paper trail of statements; online shopping results in emailed receipts, not hard copies. “Examples are plentiful,” she notes.
Older Americans are particularly vulnerable if their partner is dishonest about money. “There's less time to make up savings,” says Lili Vasileff, a financial planner in Greenwich, Connecticut, who specializes in divorce-related finances. “And, of course, you're probably closer to retirement."
Financial infidelity — call it FI for short — appears to be widespread. A 2018 Harris Poll survey found that 41 percent of Americans who combine their finances with a spouse or partner admit to some form of misbehavior. An even bigger proportion of partnered people, about 75 percent, say that a relationship has been affected by financial deception.
Some stealth might not qualify as FI — say, the daily Frappuccino you don't tell your spouse about. Other occasional indulgences might merely be misdemeanors. “I definitely took shoes out of the shoebox before my husband came home so he wouldn't know I'd been shopping,” admits Moira Lawson, 60, a health-policy executive in Baltimore.
At the other end of the spectrum are major offenses — actions that, when they blow up, threaten a couple's financial security. That could mean borrowing or spending thousands of dollars, or cheating on taxes without a spouse's knowledge. It could even mean scheming to undermine a current spouse's future finances, says one financial adviser. Some of her female clients’ husbands secretly established residency in states with no minimums for child support or alimony, so if the marriage went south, they wouldn't have to pay up.