Limiting the Gambler’s Access to Money


Restricting or severely limiting the problem gambler’s access and custody of household finances and assets is a common recommendation that can benefit both the gambler and the family. Money is the fuel for a gambling habit, and the ability of a spouse, partner, parent, trusted friend or relative to create a roadblock to access can be helpful. The blocking of access to financial resources can range from simply giving the problem gambler an allowance to more extensive measures, such as transferring legal control of all assets to a spouse, partner, loved one or even a trust. However, these are rather extreme steps, and it’s best for those involved to seek professional help from financial, tax and legal experts before they become necessary.

Establishing Controls to Ensure Household Bills Are Paid
A good starting point in the effort to control a problem gambler’s spending is for someone else, such as a spouse or parent, to manage household expenditures. The gambler can be part of this process but should be included only with supervision.

The gambler’s loved ones should be encouraged to handle financial transactions automatically through a bank or other financial institution whenever possible. This includes payments into savings and investment accounts as well as income from paychecks, Social Security and pension payments. When income checks cannot be deposited automatically, the gambler should be encouraged to give them to a trusted non-gambler who can make the deposit.

It’s important that credit cards are closed for the accounts on which the problem gambler is a signer. This includes personal credit cards, jointly owned cards and those used for work. To make sure this happens, advise the gambler or loved one to obtain written confirmation of closed accounts. If a credit card is deemed necessary, the non-gambling individual should open the account.

The problem gambler may be best served by living on a set cash amount each week that’s sufficient for common out-of-pocket expenses such as food. The non-gambler can supervise the distribution of this money and ask the gambler to account for expenses before additional cash is provided.

NEVER restrict or cut off the gambler’s access to financial resources if there is concern that the gambler will become physically or emotionally abusive in their desire to obtain money. When desperate, gamblers have been known to assault spouses, partners or other loved ones. Gamblers sometimes threaten suicide if they don’t get the money or use children as ransom.

Legal Transfer of Assets
The transfer of legal ownership of assets from a gambler to a non-gambler is something that should be not taken without consideration of ramifications. Transfer of assets can create problems in the event of divorce, separation, physical or mental incapacity, or death. Still, it may become necessary.

There are a variety of ways to transfer ownership or otherwise restrict a gambler’s access to household finances. The exact strategy to employ varies based on the gambler, their financial situation and their obligations to the family. The gambler should be encouraged to discuss the best tactic with a lawyer or financial planner before transferring legal ownership.

Some of the ways that asset ownership can be transferred include the following:

    • Close all joint checking, savings, and investment accounts and reopen them in the sole name of the non-gambler spouse, partner or relative. Even accounts that currently require dual signatures should be closed as some gamblers will forge signatures.

    • All income – paychecks, pension payments and other income – should be automatically deposited in these accounts when possible. (Social Security payments can’t be deposited in accounts that don’t contain the recipient’s name.)

    • Transfer of property such as homes, cars, vacation property and other personal property may be necessary so the gambler can’t convert them to cash. However, this is considered an extreme step by most treatment professionals and may be more emotionally damaging than productive.

    • Transfers of ownership that are considered gifts by the IRS may be subject to tax. In general, gifts between spouses are not considerable taxable. Gifts to children and other non-spouses (such as partners, relatives or friends) that exceed a certain value ($13,000 in 2012) may be subject to tax. The use of a trust can help eliminate tax consequences.

    • Ownership of retirement accounts and IRAs cannot be transferred. Under certain circumstances, a gambler can withdraw money from IRAs and similar accounts and transfer it into the name of another individual or trust. Such a transfer, however, means the funds would no longer grow in a tax-free fashion and likely be subject to taxation and possibly penalties. This should be considered a drastic and potentially expensive action, and only appropriate when the possibility of a gambler spending retirement money is high.

    • In instances when spouses or partners are gamblers, control of assets may be best transferred to a relative or adult child.

Use of Trusts
A trust is a legal arrangement that allows a third party, or trustee, to control assets on behalf of a beneficiary or beneficiaries. For example, a gambler might place assets, such as stocks or cash, into an irrevocable trust, meaning the gambler permanently relinquishes control of the assets. A spouse, partner, trusted friend or relative might serve as trustee, who would manage the assets for the beneficiary, such as the gambler’s family. This arrangement could be used in the case of a child who is a problem gambler when parents want to ensure an inheritance won’t be gambled away all at once.

For gamblers who have been isolated from family and friends, third-party trustees, such as a trust department, attorney or financial planner, can be used.

Using trusts to protect assets from problem gamblers should be seen as an advanced solution. They can be complicated and costly; however, in some situations they may be appropriate.

Problems and Risks of Shifting Ownership
Transferring ownership and control of assets is not a simple process that should be done without much deliberation. There are risks for both parties as situations can change. A gambler’s spouse may file for divorce or die, putting into question whether the gambler will have a right to put property into the spouse’s name. Other unanticipated problems can arise. For these reasons, it’s important to encourage the gambler to discuss transfers with all involved, including legal counsel. A knowledgeable lawyer will understand the risks of shifting ownership of assets and address them with appropriate strategies.

It’s important that the gambler and their loved ones understand property ownership laws in their state. The gambler should also learn more about ownership transfers, power of attorney and similar strategies from banks, brokerage firms, mortgage companies, financial institutions and others.1

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