Keeping financial secrets from spouse can be destructive

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Like infidelity, financial secrets can erode trust and spell doom for spouses or partners who love each other.Some people will hide bank accounts and other assets from their partners, while some obtain credit cards, loans from their 401(k)s and even home equity loans without informing their significant other. Some partners lie to each other to cover up embarrassing addictions to gambling or drugs, or compulsive shopping and spending.It's no wonder conflicts over money top the list of issues contributing to divorce."The secrecy will eventually manifest itself," said Bruce Bickel, a senior vice president at PNC Wealth Management in Pittsburgh.That is because "money has a huge emotional connection to our lives," said Daisy Miller, chief clinical officer at Hollywood Pavilion, a psychological treatment center for women in Hollywood, Fla."Married couples and partners depend on each other to a certain degree for emotional and physical needs, and money touches on both. Financial infidelity takes on all those connotations" that sexually cheating would, Miller said.As a certified divorce financial analyst, Barbara Shapiro knows firsthand how common financial secrets can be in failed relationships.Too often, financial deceit can place a family in peril, especially if one partner handles the finances while the other has either blind trust or a total lack of interest in household money matters, said Shapiro, vice president of HMS Financial Group in Dedham, Mass.She recently had a female client who said she called the bank to see how much she and her husband owed on their house only to discover he had taken out a second mortgage. He got her to sign the documents without explaining what they were. His business was failing and he was using the home equity line of credit to support the family."Regardless of who pays the bills or runs the household or physically writes the checks and does the investments, the other partner should not abdicate responsibility," Shapiro saidAccording to a study released by The Hartford insurance company and the Massachusetts Institute of Technology's "AgeLab," which included telephone interviews with 837 older couples, financial communication appears to be a typical problem.Roughly a third of couples (36 percent) reported that one spouse is the dominant financial manager. Of this group, the "Drivers" (17 percent) handle all financial matters of the household while the "Passengers" (19 percent) are either minimally involved or completely hands off regarding the family finances.Just over half (53 percent) of the respondents said they were part of a couple where both partners are equally involved in all aspects of household money management, making every financial decision and taking every action together.A relatively small percentage (11 percent) practiced a division-of-labor approach. The "Divide and Conquer" couples had one partner take the lead on some aspects of the household finances, but play a secondary role on others.The researchers concluded that couples using the "Divide and Conquer" management style were most likely to have considered important questions related to the death of a spouse: how would this impact the monthly income of the remaining spouse; how an expensive illness of the dying spouse would affect the remaining spouse's assets; and how prepared the surviving spouse would be to manage the household when one partner dies.Experts suggest that it's healthy for married couples to have separate checking and savings accounts, but they should also have a joint checking and savings account for the household.Single people living alone don't have to discuss their spending with anyone. Their finances -- good or bad -- are their own little secret. When they either marry or otherwise move in with a romantic partner, they may hold onto old attitudes and habits."They feel 'because I have worked for this money I have a right to use it as I want at the expense of my relationship,' " said PNC's Bickel. "I try to counsel couples to use finances as a means of developing a relationship of trust ..."Herb Vest, CEO of True.com, a scientifically based online relationship service, said couples can't underestimate the importance of discussing their finances.A big saver may come to resent a big-spending partner. The free spirit also will tire of a penny-pinching spouse who doesn't allow the spender to have any fun with the money they've earned."I do not believe any romantic relationship can (survive) if there are major secrets between couples," Vest said. "It will eventually cause problems."(E-mail Tim Grant at tgrant(at)post-gazette.com.)(Distributed by Scripps Howard News Service, www.scrippsnews.com.)