Guarding Against Financial Infidelity: When Secrets Threaten Your Financial Stability

Financial fidelity is the backbone of any healthy marital or partnership relationship. Like emotional trust, the trust we place in our partner’s financial decisions significantly affects the overall health of our relationship. When that trust is broken, the effects can be lasting and deeply damaging.

In her years at Fidelity, advanced planner Kelly Quinlan has encountered myriad cases of couples in financial distress. “Every relationship is different,” Quinlan notes. But certain phrases echo across these experiences, like: ‘My wife doesn’t know about this account,’ or ‘We manage our finances separately, so I’m unsure about my spouse’s assets.’

Identifying Financial Infidelity

Often, when we think of financial infidelity, we picture hidden bank accounts or secret splurges. While these are certainly red flags, financial infidelity isn’t always deliberate. Sometimes, it’s a simple oversight, such as neglecting to discuss future financial goals or wanting to control family finances without malicious intent. However, the impact on the uninformed spouse can be severe.

The Ideal Financial Relationship

For a partnership to thrive, financial transparency is paramount. Both parties should be informed, making joint decisions and planning for their financial future. Each person should be assured of present security and future financial stability, says Quinlan.

But how do we ensure such transparency, especially if our partner is less forthcoming? Here are six steps to protect yourself from financial oversights and secrecy:

1. Annual ‘Financial Summit’

All couples should conduct a yearly financial review, discussing their budget, account details, beneficiary designations, and any professionals involved in their financial management. This annual check-in offers a comprehensive view of your combined finances.

2. Access and Authorization

Ensure you have access to all accounts and, if needed, secure the right to manage them. If your name isn’t on crucial accounts, get it added or ensure you have a durable power of attorney for financial affairs. Know how your assets are held and what this means in case of an emergency.

3. Divide and Conquer

Take charge of certain financial responsibilities. Paying bills, liaising with insurance agents, or other financial tasks not only ensures transparency but also promotes financial dialogue in the relationship.

4. Active Participation

Always attend meetings with financial advisors together. It helps you stay informed, voice your concerns, and forge a relationship with the advisor, ensuring seamless management in unforeseen circumstances.

5. Asset Transfer Clarity

Understand how assets will transfer in case of emergencies. Quinlan stresses, “The only reference your family has after you pass away are your estate planning documents.” Ensure they are clear and comprehensive.

6. The Bigger Picture

Understand all factors, like past relationships or children, that could affect your shared assets. For instance, a divorce decree might dictate certain financial commitments, or a previous wish might be at odds with a current estate plan.

Driving From the Back Seat

Financial infidelity, intentional or otherwise, can erode the trust in a relationship. Quinlan’s final advice is poignant: “Delegating tasks is part of every marriage or partnership, but don’t be complacent or take a back seat when it comes to your finances.”

If you sense resistance to financial dialogue from your partner, it might be time to consult a financial professional or attorney. They can provide clarity on your rights and guide you in ensuring your financial security.

Remember, open communication is the linchpin of a secure financial future.