One of the buzzwords in the family office world is open abuse. Economic abuse often involves monitoring spending by a partner or controlling spending by limiting access to funds and cancelling credit cards. A family office professional can help protect a loved one from this type of economic abuse by monitoring their spending, controlling the flow of money, and ensuring that the relationship is not abused. This type of abuse is common and can involve an elderly parent, child, spouse, or other family members.
When a family office member controls the money in an account, he or she can move those assets around or limit spousal access to them. Likewise, assets in pre-existing trusts and inheritances are likely to be excluded from marital property calculations. This is why family offices are committed to protecting marital assets and may even seek a worldwide freeze order on all assets if there is suspicion of abuse.
Economic abuse occurs when a family member has access to an asset that is not available to the other party. For this reason, family offices should use strict disclosure guidelines to ensure that financial data is completely and accurately disclosed. While financial information should be kept confidential, it should be made accessible to all family members. In addition, financial disclosure guidelines should be in place, because many courts will require that full financial disclosures be provided in high-net-worth divorces.
