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**Divorce and Your Money – #1 Divorce Podcast**

If you are currently going through a divorce or soon will be, Divorce and Your Money is the perfect podcast for you. The author, Shawn C. H. Leamon (MBA), is a professional and well-respected financial advisor and Certified Divorce Financial Analyst. His podcast provides real-world practical advice, including tips and checklists to help women and men protect their financial interests and future.

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How to Get Divorce Help Nov 19, 2021

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0232: How Does Spousal Support Work? - Part 2 Oct 27, 2021

0232: How Does Spousal Support Work? - Part 2

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In this episode, we are continuing the series on spousal support/alimony, whatever name you want to call it. And the importance of this episode is to cover the different types of spousal support or alimony available. I'm going to go through five different types, temporary support, permanent support, rehabilitative support, lump sum, and partial lump-sum support. So, let's jump in.

Let's start with temporary support. Temporary support, generally speaking, is - before or during the divorce process - you have a temporary support amount you may be paying or receiving. It's the support you agree upon before the divorce is over. Pretty clear. The important thing to know about temporary agreements, and I say this almost every day on calls or when people are negotiating, whether you're the person about to pay or receive temporary spousal support, be very careful about what you decide. The numbers that you agree upon for temporary support often become the support numbers you use after divorce.

And so, if you agree to a $1,000 a month, oftentimes the agreement after the divorce will be $1,000 a month. There is a lot less flexibility. Generally speaking, once you agree upon a temporary support number that often becomes the final support amount that you use after the divorce process. So, something to be very careful about there. Permanent support. Permanent support is what it sounds like. Permanent support is support for life. It's generally speaking, not as common as it used to be. If you were in a long-term marriage and you didn't work and you're near retirement age, there may be a permanent support amount, but if you are relatively young, then there usually isn't permanent support.

It's not something that's automatic or even expected the way it once used to be. That said, it still exists, and that's something that you should be aware of. Every state, of course, as always has its own circumstances in revolving permanent support. Now, there's something between temporary and permanent support that wasn't on my list that I want to jump in, is there's just what your final support amount is. So, it's just what you negotiate. It doesn't necessarily have a fancy name other than your alimony number. So, if your alimony is $1,000 a month for eight years, either paying or receiving, that's just the amount. That's not temporary, that's not permanent, that's just your amount. So, that is the alimony payment. I just want to make that distinction in there very quickly.

There's something called rehabilitative support. And it's not always known by that name, but I'm going to go through what it means because its meaning is very relevant to many of the discussions that I have, and that you may be thinking about when it comes to thinking about support and what makes sense. So, rehabilitative support is a very simple concept and that is either you or your spouse may need some additional training to get back on their feet and start earning a reasonable living after the divorce process. If they've been out of the workforce for a period of time, or if you've been out of the workforce for a period of time, it might take one, two, five years to get back on your feet or for your spouse to get back on their feet.

And so, in a rehabilitative support model, what often happens is you pay a higher amount of spousal support or receive a higher amount of spousal support for the first few years while that spouse gets their training. So, if they're going to become a paralegal, go back to college, get an advanced degree, some sort of free training, whatever the case may be. Well, you might say, "Well, I'm going to agree to a higher level of support for the first three years that person gets to get back on their feet." And then it's presumed that after those three years, they'll have their certification, they can earn a good living for themselves. And then the support amount declines or goes away or whatever it is that you negotiate. That's what's called rehabilitative support. And it's just there to allow someone to retrain and then start earning funds on their own. So, that's something to think about when it comes to support models.

The last two are lump sum and partial lump-sum support. You'll understand lump sum very clearly. A lump sum is paying all the support in one payment, instead of paying it over time or receiving all of your support in one payment, instead of receiving it over time. It's a topic I've discussed on the podcast before. If you haven't gotten the archives with all the podcast episodes, I encourage you to do that. There are some extensive details on how lump sum support can work and ways to negotiate it in that archive of all of the 200 plus podcast episodes, not all of which are public here.

But what's important about the lump sum support is let's just say, and I like to use simple numbers, you're going to be paying $1,000 a month for five years, which means you are going to be paying 12,000 a year or 60,000 over five years. A $1,000 a month is what it is. Well, the option is instead of paying 60,000 over five years, what if you just wrote a check for $60,000 and you're done paying support? There is no future support. You're separated from your spouse. You don't have to deal with at least that part of your relationship ever again.

Now, conversely, maybe you're on the receiving end. So, you're supposed to get $1,000 a month for five years, so you're supposed to receive $60,000 over five years. Well, maybe you might say, and I'm going to add a wrinkle into this example, you might say, "Well, I want all the money upfront because I don't trust my spouse or I don't want to have to deal with waiting for that monthly $1,000 every month, and I want my money now." So, you might say, "Well, just write me a check for $60,000." But maybe, I don't want to say better yet, but maybe for the sake of negotiation, you're willing to take $55,000 upfront or $50,000 upfront instead of $60,000 over five years. Something that you may want to think about. And so, that would be a lump sum.

And so, you get all your money upfront. You might not get the full value, but you get all the money today instead of, or the day your settlement is over or you come to a settlement, rather. You get all the money in one fell swoop, rather than waiting every month for that direct deposit or check to come in the mail. Now, the partial lump sum is also very simple and that is, it's not always financially feasible for people to pay all their support or alimony in a lump sum amount. It just isn't. And sometimes circumstances just won't allow that to happen. And so, what you can do in that situation is you can have what is a partial lump sum.

So, let's just say maybe you pay or receive three years upfront and then you get the rest over time, or you pay three years upfront or two years upfront and pay the rest over time. The plus side is you get a chunk of change in the short term if you're on the receiving end. The downside is your monthly payments are going to be lower going forward, but that's not really a downside mathematically. It's just a different way to negotiate the agreement. So, that's something to think about. And then sometimes that works too, where you give someone some and if you're the one paying it, you give someone, your ex-spouse, some starter money, and then they get to do that.

And then, in the long run, your payments to them on a monthly basis are much lower. So, something to think about. The reason that a partial lump-sum comes into play is that it's just another tool to have in your toolbox is it may not always be either-or. Sometimes you just can't write a check for a large support amount. It just might not be feasible. So, that's why you might do a partial lump sum. So, something to think about there. So, there are, as I said, different times, types, excuse me, of spousal support to consider. There is temporary support, permanent support. I interjected just what we call support, which is your final agreement, rehabilitative support, or money and more money in the short run for retraining, a lump sum support, and then, of course, a partial lump sum.

A lot of different options to think about when you are negotiating a potential spousal support agreement and different options really can apply really well during, rather I should say, different circumstances. And so you should think about what options may make the most sense for you and your circumstance because it's not always set in stone. There's a lot of ability for some creativity when negotiating support agreements and that creativity can help you actually get this divorce done, rather than extending the process out even further, because you're having a hard time coming to the right support agreements and what is financially feasible and acceptable for all parties involved.

0231: How Does Spousal Support Work? - Part 1 Oct 06, 2021

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All right. Today, I want to talk about a very basic and essential topic that is worth your understanding and understanding the nuances of it, and that is spousal support. And when I talk about spousal support, I also mean alimony in there as well. Spousal support or alimony is the same term used interchangeably. Sometimes I'll refer to it as spousal support, sometimes I might say alimony, but know that they are the exact same thing. There's a lot of details that you should know about alimony or spousal support, and I want to make sure you understand the basics of it.

Let's start with just a simple definition. What it is, is a court-ordered provision of money for one spouse after divorce, or sometimes separation as well. Spousal support is a very important concept. You may be on the paying end of support, you may be on the receiving end. But oftentimes, people ask, "Well, why do I have to pay support?" or, "Shouldn't I be receiving spousal support?" And you should kind of understand why it exists. Very simply, one spouse pays the other money, usually on a semi-regular basis. And the reason it exists is that most of the time, both spouses don't have equal resources.

Usually, one spouse earns more than the other, and to make up for that difference, they have spousal support. Particularly, in a longer marriage where if you've been married for a long time, and if you're getting divorced and one spouse didn't work or barely worked part-time, that income difference can be substantial. Sometimes, in the hundreds of thousands of dollars a year a difference and so spousal support is there to make sure that the lower-earning spouse does not end up without any form of income after the divorce process is over.

Why it came into play, if you look up the history of spousal support, why it even exists, is actually, once upon a time, you could get divorced but oftentimes, if we are assuming traditional gender roles, the wife would be left destitute. The husband who has had some sort of profession many, many decades ago before divorce laws evolved would work the job, the wife would stay at home if you think of the traditional family as it used to be. Before spousal support, if a wife were to get divorced, the wife would have no money and they would have to start over with basically nothing. They would be destitute.

And so, spousal support was enacted by just about every state to minimize that from happening and keep that from happening in this situation of divorce, like other evolutions in divorce include no-fault divorce laws, which I've talked about on the podcast. It used to be the case where you had to prove a reason that you were getting divorced. Now you can get divorced for any reason at all in any state. Look, there are pros and cons and what not to everything, but just want to give a little bit of context there.

Now, the big question that I get asked a lot is, "How much alimony am I going to get?" And the answer to that is it depends. There are numerous factors that are considered. Now, every state has its own nuances to how spousal support is determined. Some of them, it's a little bit more formulaic. More often, it is almost just whatever you and your spouse agree to or whatever a court decides is the amount of support that's going to be paid, and there are very few guidelines. Particularly, for my California listeners... I work with a lot of people in California, a lot of people in New York... Now, I work with people everywhere but in those two states in particular people, the question is, "How much support am I going to pay?" And the answer is, well, we're going to have to figure it out and negotiate it because it's not a hard and fast rule in terms of spousal support.

So there are a lot of nuances to the spousal support question and what financial status means, and trying to give a bunch of examples is a little bit tricky because everyone's situation is different depending on state and income level and savings and earnings, et cetera. So, I won't try and dive into 50 different examples of ways spousal support might be calculated just based on the financial status question, but something to think about.

The next issue is living conditions and lifestyle. Some people who make $500,000 a year spend $600,000 a year, which means they have a lot of debt. I also know families who make $500,000 a year who spend $80,000 a year, and they save a substantial amount of money every year. The point is, is that lifestyles can vary dramatically between families. And if you are in a situation where you or your spouse doesn't spend very much money, there may be the case for lower support amounts going forward. Now, it doesn't apply in every state and every situation, but something to think about.

Earning potential, is a very important topic in terms of how the spousal support conversation can go and one that we do a lot of coaching calls around, and that is, the spouse that's receiving support, what is their educational level? Are they able to earn funds on their own? Sometimes the answer is yes, sometimes the answer is no, or sometimes the answer is, well, after a few years, they may be able to. If you are a younger couple, let's just say, in your 40s is a good example, or younger, and you're getting divorced, it's not very realistic almost anywhere in the country to believe that the spouse who's receiving spousal support is supposed to never work again.

And so, the question becomes, what is that person's earning potential? Now, if you've never graduated college or don't have any formal education, maybe the answer is, "Well, we're going to assume you can earn a minimum wage job and that's your earning potential." But conversely, if you have a master's degree but have only been out of the workforce for three years, and you can probably get a job with a little bit of extra training or something like that, a six-figure job, then that could be factored into the spousal support calculations. So, there's a lot of question in terms of earning potential that needs to be determined by the spouse. I've also talked in the past on the podcast about vocational experts who will, if there's not an agreement about one spouse's earning potential, can come up with an agreement about earning potential and do an analysis of the spouse's possibilities in the job market. That is something that could factor into the spousal support discussion.

Age. Age is very simple. The older you are, usually the more likely that one spouse will be receiving support and also the more likely it is that that support may be longer. And, that the other spouse isn't expected to go find a high-paying job over time. Because if you're 61 and you're getting divorced and you're expecting to receive support, well, it's most likely the case that you will be receiving support for an extended spousal support for an extended period of time, and they're not expecting you to go rejoin the workforce and get a job, particularly if you've been married for a while, which also brings me to the last point, of the length of the marriage.

If you've been married for a long time, 10 years, 20 years, 25 years, 30 years or longer, the longer you have been married, the more likely you're going to receive some form of support and for a longer period of time. Now, it's not always a super clean and easy thing to figure out in terms of timing and how long and how much, but there is a correlation between the length of the marriage and the amount of support you receive. Sometimes I talk to people who've been married for three years or five years, and they want 10 years of support. That is unlikely. You will usually get paid for... Now, every state differs, some states have rules, and you should look up your state's laws, where if you've been married for over 20 years, it's automatically assumed that you're going to get support for the rest of your life. In other states, it's a fraction of the time. But one of the things to think about is how long you've been married and how much support you'll receive.

For planning purposes, I use an estimate. If the state doesn't have a law, I usually estimate around a third to a half of the time you've been married for support for planning purposes, both for the payer and for the person receiving. So if you've been married for 10 years, I assume usually somewhere between three and five years of spousal support. Now, every situation is completely different. But if I were doing just a rough guess, a rough calculation, someone were to come to me and say, "Here's the support agreement that's on the table. The state doesn't really have any real guidelines," if it's somewhere in that third to a half of the amount of time you've been married, assuming the couples are younger so meaning, excuse me, early 50s at the latest, but usually 40s or 30s, that would strike me as a reasonable amount of time. But as I said, every situation is different.

In the next episodes, I want to discuss some new other nuances of spousal support such as the different types of support, and what special circumstances may exist where spousal support might be longer or unchangeable, and some of the pros and cons of those different options.

0230: A Restraining Order to Protect Your Money in Divorce (Automatic Temporary Restraining Order) Aug 03, 2021

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Almost half the people I talk to on a given day or week have yet to file for divorce. And they are in the planning phases and are trying to figure out their options. Now, I'm never an advocate for divorce, but there's one situation in which I encourage people to file sooner over later. And the reason is because, when you file for divorce, you generally have additional protections when it comes to financial decisions that are made. And specifically, most divorce filings include something that's called a temporary restraining order or automatic temporary restraining order, depending upon your state. And what that means is that neither spouse is allowed to make big financial decisions once the divorce is filed.

And the reason that's important is oftentimes I hear people saying, "Well, my spouse is thinking about doing this. Should I go along with it? Or how can I stop this from happening? Or how do I protect myself if my spouse does that?" And oftentimes the only answer is, if this is something you're really worried about, you need to file for divorce now to protect yourself and to prevent your spouse from making this particular financial decision that could be very harmful to your future particularly when divorce is on the horizon. And this temporary restraining order or automatic temporary restraining order, as I said, prevents your spouse and you as well, but your spouse from making big financial moves.

And what are those? Those could be something like selling property, transferring property, borrowing, like taking on a big debt, changing your insurance policies, withdrawing, that's a word I have a lot of trouble with, withdrawing large sums of money from bank accounts, destroying or hiding assets, paying down big debts, taking on big debts, making a big purchase, things like that. And the restraining order, which you get when you file, is there to protect you and to keep your spouse from doing those things. Now, it gets a little complicated because there are two things that are really important notes to think about. The first is that you can still do stuff that's in the normal course of business.

Had a really challenging case lately where the spouses were business owners and they were filing for divorce, and they were trying to figure out how to still continue... They had a very, very successful business, but they buy and sell, I'm just going to use the word property very generally, regularly. I mean, that was basically what the nature of their business is. They buy and sell lots of properties. And so, the question was, under this temporary restraining order, how do we keep running the business the way we need to run the business, given that basically, all they do is large transactions and how to make that work efficiently.

But other times I hear people saying, "My spouse is about to withdraw a bunch of money or transfer a bunch of money to here or there." And that's when that restraining order comes into play. But the point of all of that is just to say, the restraining order’s first important note is that you're still allowed to pay your groceries, pay your bills, pay your mortgage, do the normal things that you do to run a normal life. It's not meant to stop spending completely because that would be unrealistic. The second thing that you should know is that it's not perfect. And what I say by it's not perfect is, just because you have this restraining order in effect doesn't mean that your bank knows, doesn't mean your credit card company knows, doesn't mean that all of the institutions know what's going on.

So even though there may be this restraining order in effect, if your bank doesn't know, your spouse could theoretically make some big transfers to different places. And, yeah, that'll come up later in the discussion, but it is not something that automatically goes in place to every institution that you work with. And so, it's something that you need to be aware of and you need to communicate these things with all of your various service providers to make sure that they follow through with what's on the instructions. Now, of course, there will be or there can be consequences down the line if your spouse violates this restraining order, this temporary restraining order. However, the issue is that you have to deal with that later. Meaning, it could take a month or two or several months to get back what has been taken even after that restraining order.

And I'll give you a scenario that comes up almost every week or two that someone calls me about, is they say, "Hey, my spouse is from a foreign country." It doesn't really matter which country, but another country. "How do I protect myself?" And the big issue is, that spouse could at any moment really, they could take the... Before the divorce is filed, they could just say, "Well, I'm just going to wire all of my money to this country and then I'm going to move there and what are you going to do?" Well, that's a real possibility. And while you're married, and there's no divorce action that's been filed, that's a theoretical possibility and a real one.

But in those types of cases, I'll always say, look, your best hope is to file, or oftentimes your best hope is to file and then also send this order directly to your bank the same day to prevent a big wire transfer from going out that you don't sign off on, and the money disappearing and your spouse disappearing and you're out of luck. So it's something to think about. Another scenario that comes up all the time is, you know that divorce may be on the horizon in a year or two. It may not be immediate, but as I said, about half the people I talk to, some are close to filing, but some are several years off. And a common question is, "Hey, we're thinking about refinancing the house." And I'll say, "Where's the money going to go? Are you going to take money out? Where's that money going to go? Is this going to be a smart decision?"

And I'll walk through a bunch of questions for the individual person, but I'll say, "Hey, if you're taking out $100,000 or $300,000 as part of the refinance, is that going to be a smart move for you? And is that really what you want, particularly if you get divorced a year from now or two years from now, is that going to hurt you financially? And how do we stop your spouse from doing this?" Now, another thing to note is, as I talk about these temporary restraining orders is, if you file for a divorce because you want one of these in place, it doesn't mean that you have to rush the divorce process most of the time. You can file just to have this in place, and then work very, very slowly on the other stuff because you just don't write from a timing perspective.

But in terms of protecting your funds and protecting your money, if you're in a disadvantageous position and you don't want something to happen, or if your spouse is about to, I don't know, go back to school and take on a big student loan. You don't want that to be marital property, or that could be something else, or just take out a big debt. There are lots of different scenarios in which this could come into play. And so, I want to make sure you're aware of the importance of a temporary restraining order. It's almost in every divorce situation, but you need to think about it, know your state's rules, do your research, and it may be a very useful tool for you as you figure out the appropriate timing for filing for divorce. And it may be a good way, a useful way, to protect yourself going forward.

0229: What Date Do You Value Assets in Divorce? Jul 19, 2021

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A question that's been coming up quite a bit is what day or what month do I use to value all of my stuff? What day do I pick to value the house, value the retirement account, use what numbers in the bank account? Is it June of this year? Is it April of last year? Is it when I filed for divorce? And or is it when the trial date is coming up? What day do I use to pick to value all of our stuff? And it's a really important question and a really complicated question because the date that you value all of your stuff can have really important impacts. I'll give you just a few examples so you know what I'm talking about. Let's just say you separated two years ago, and now you're finally getting to the divorce negotiation, which is a very common situation.

Well, two years ago, your house may have been worth $500,000, but let's say now your house is worth $700,000. And you're planning on keeping the house. Do you use the $500,000 valuation from two years ago, or do you use the $700,000 valuation? Or a more complicated subject that I've been dealing with a lot lately is people who have stock options. This one's a very tricky one, but if you have stock options, those options often have certain grant dates where you get more options or certain exercises dates where those options get a lot more liquid or have more value. And so, one of the things that gets complicated is, well, when you're trying to get divorced or you or your spouse has stock options, not only what date do you use to value those options? Because generally speaking, oftentimes those options can fluctuate substantially in value over time, but also how many options are actual marital property versus not?

And trying to figure that out can be very important. And the reason I bring up this subject is it is something that you should be thinking of. And then the third example that actually happens is a very simple one that actually doesn't have a lot of complications, but something you should be thinking about, which is, let's just say, I was talking to someone this morning about this. Let's just say you and your spouse are going to negotiate things yourselves, and it's relatively amicable, all things considered. And you're trying to figure out, well, what day do we use to pick for the bank accounts? Do we use last month? Do we use three months ago, whatever it is? And we just want to make sure that we're all on the same page and that could be a simple situation, but the point is, is that all of your property fluctuates.

Oh, and then one more, sorry, I said that one more example, but if you think about a retirement account or a stock brokerage account or an investment account. Investments in your account fluctuate every day. And so if you were to calculate your investments on April 5th, that same investment account will have a totally different value on April 6th. And it could have a very different value in July of the next year. So there are a lot of things to think about when it comes to what date you pick to value assets. And I just want to give you some things to think about. And the important thing about this episode is to know what date to pick and to be thinking about what date to use. And it may give you some thoughts in terms of what timing you should pursue when it comes to your divorce process.

And another way to think about the date that you value the assets is your separation date. And the goal in your divorce is to have a date where all of your assets, all of your debts are valued as of that date. So there is no confusion. So things go up in the future, that's not something that gets discussed. If things go down in the future, that's not something that really gets discussed either. The goal is to have it consistent going forward. Now, what is extra complicated about this topic is two things. One is that every state has very different laws as to how the separation date or the date that you value assets gets calculated. On top of that, it can change within the divorce process and depending on your state's rules.

And so you need to really understand and talk with an attorney about the ways that your assets may be valued and sometimes revalued. And I'll give you some examples of what the options might be. So in some states, you use the date that you separated. Now, what does separation mean? For some people, it's very clear. The data separation could be the date that one spouse moves out of the house, or I talk to plenty of people where one spouse lives upstairs. The other spouse lives in the basement. And you could use that as the date of separation, but oftentimes you are still living under the same roof, pretty much in the same space. And it's hard to determine what that date of separation is. And sometimes it can be a big fight. And when I say fight, I'll say negotiation about what the date of separation is because whatever date you pick could have a very big impact on how much money each spouse ends up with at the end of the day.

So the date of separation is one option. A second option that comes up all the time is a very clean and easy one to understand, which is the date you filed for divorce, right? So the day you file, that can oftentimes end up being the date that you use to value all of your houses, your bank accounts, your credit card debt, your retirement accounts, et cetera, would be on that date you file for divorce. A third option that can come up as well, is the date, or sometime right before a trial. So oftentimes if you have, or sometimes if you have a trial date set, your state may say, and as I said, all of this is very state-dependent. So you need to figure out the rules in your state, but your state may say that, okay, well, we have a trial coming up in nine months. I'm just going to say the trial for sake of example is going to be in December. So they might say we're going to value everything as of October and use that as the value of all the assets.

And if you're coming up on a trial date, you may have been in this process for a year, two, three years or longer to get to that date. And therefore, that's why they decide to do everything closer to the actual trial date because they know that things have fluctuated quite a bit. And then finally, the last option is oftentimes, or sometimes you can decide upon a date that you want. So if you and your spouse agree that this is the date that we're going to use for separation to value all of our assets, then that's the date that you pick.

And it could be as simple as that, but both of you have to agree. And it's not always super simple to get both of you to agree. So there are lots of options there. Could be the date of separation, could be the date you file for divorce, could be a date right before a trial, or could be a date that you and your spouse agree upon. But an important point to know is the date that you separated, the date that you value all of your assets can have a huge impact on your divorce and how much money each person gets. And one of the places that comes up a lot of times in the coaching discussions and divorce strategy discussions is what date should we be pushing for? And why?

Because if you have stock options that grant in three months, well, maybe you should file for divorce now to protect those options that you get granted to you in three months, right? Because they wouldn't be included in the marital pile. Or maybe the question is, well, we should push for a date later down the line because there are benefits to waiting in your particular situation. It really just depends. And it depends on your situation, depends on your state, but it's a topic for discussion that can oftentimes get overlooked by one party. And I want to make sure that you are aware of it and thinking of it when it comes to determining well, how much is all of this stuff really worth?

0228: How Do You Keep Separate Property Separate? (Or Prove Separate Property is Actually Marital Property?) May 19, 2021

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It's been a few months since I recorded a new episode and not because I haven't been working, but because been working a little too much and got behind on the podcast episode. So apologies for that. Thank you to all 0f the people who I've been speaking to over the past several weeks and months, there've been lots and lots of good questions and, and coaching calls coming in. And I want to get back in helping educate you on the different intricacies of the divorce process. And this episode specifically, I want to talk about some subjects that have been coming up quite a bit.

And the first one I'd like to talk about is how do you keep your separate property separate? And also, how do you know if a separate property or what's being called separate property is actually marital property. And if you've been listening to other episodes, you know what I'm talking about in the context, but the big issue is, let's say you had some money.

When I say property, it could be something like money. It could be a physical property. It could be, a retirement account, a car, whatever. Let's say you had something before you got married. How do you make sure that if you're now, unfortunately, facing divorce, that is still considered separate property? What kind of things can you do? Or should you be doing? And conversely, if your ex-spouse, for instance, is saying, well, this is separate property, but, but you think it's actually something that you should be splitting between the two of you. How do you broach and go down that discussion? It's a very common topic that comes up every, every few days in terms of people that I get to speak with. And there are a few things to consider here.

And let's take it from the perspective of you have some separate property. Maybe you got an inheritance as a, maybe you had something when you got married, there's a lot of different types of separate property. How do you make sure that it stays separate? A few things.

The first is to keep good records. Now keeping good records, doesn't ensure that something is separate, stay separate. However, keeping good records can ensure that you can at least be able to prove the argument one way or another in terms of what is going on. So you need to make sure that you can keep good records. Now it becomes a challenge when sometimes you've been married for, someone called me, I spoke to just the other day, who'd been married for 31 years and there was a separate property question and there's no way to get the records. And so we were talking about some advanced strategies in terms of, getting affidavits from a parent who's still around and, and other siblings who are on the receiving end of this inheritance when everyone got the same amount, et cetera, et cetera. In lieu of being able to have actual records, they had to approach a different direction.

But if you have things like bank accounts or old account's statements, some of these institutions keep account statements for, for a decade or more, or if you walk straight into your bank, sometimes they can pull if you've used the same bank for a long time and they're still around. Oftentimes they have good records that go back further than what you may build, ask or access online, or just to get when you stroll in, if you just talk to a casual person at the bank. But anything you can do to get old records, old communications that indicate when you received some form of property and how much it was at the time it can bolster your case.

The second thing is to avoid co-mingling is a term that if you listen to the podcast, you should've heard before. But co-mingling is just the idea that you may mix your separate assets with your marital assets. Simple as that. And what does that mean? Well, let's just say you got an inheritance and then you got an inheritance of $100 and you put 50 of it into your joint checking account. Well, now you have co-mingled that money. And then you spend that $50 on groceries. Well, is that still separate property? And the answer is it gets really tough and you're probably dealing with marital property at that point. And there's not much for you to do. But if you keep that a hundred dollars that you got as an inheritance in its own bank account, and you didn't ever put your spouse's name on it and you didn't touch it, if for, for normal family purposes, then you will have a much better shot at keeping that account separate.

Now, of course, you always need to have your records and you need to always keep that account in your name. And if you're adding in some tracking to that account, all of a sudden the math gets messy unless you have those records, but it is something that is doable. And the cleaner you keep that separate property, the easier it'll be to prove that it is separate property in the context of divorce.

And conversely, I said I was taking this from the perspective of the person who has separate property. Well, if your spouse is the one who's claiming it's separate property and they don't have these things that present a good case for you to say, well, hold on a second, maybe this isn't separate property, this should probably, or may need to be considered marital property. And so for these different issues or different tips, I'm giving, if you're the person who's on the other side of this, these are the things that you should be thinking about, bringing up to advocate for yourself to make that separate property marital. Particularly if some of these things don't exist.

So one is good, keep good records. Two is to avoid co-mingling. The third thing is to keep track of income and dividends from separate property. And now this is a very tricky one, and this is very state-specific. And I always say, when someone calls, I say, this is technical. And when I say this is technical, I mean, each state can be very different in how they interpret this. And so you really need to have a knowledgeable lawyer in terms of understanding what I mean by this point.

Keep your income and dividend separate. Well, let's just say you have a bank account with $100 in it and you get 1% interest a year on that account. Well, with that 1% interest, you're earning $1 a year. Well, that $100 that is in, in some states, the $100 is, is almost always going to be separate property. However, that $1 in interest in some states is considered marital property. So if you're earning interest on an account, the $100 is separate, but $1 is marital. And if you think about that over time, where after a year or two, you have a little bit over $102, year three, et cetera, et cetera.

Well, if you think about those earnings over time, that can add up to become a substantial amount. I'm just using the context of a simple savings account, but some of you have retirement accounts to pay a lot of dividends and interest, and there's a lot of appreciation in them. And you need to really have a discussion with your attorney as to, well, is it all separate or all marital, or is there some combination of the two? Because sometimes it is sometimes that separate property that you thought you did everything right. Well, that income and dividends may actually be marital property that you have to split. And now all of a sudden the picture certainly shifts for you.

So something to really think about and know the laws in your specific state on that one. And, and it gets tricky. And so what you may want to do if you're thinking about, or if you have separate property, I should say using my example of you have $100 in separate property and you get $1 in interest a year. Well, maybe you want to put that $1 in interest always goes to a different account now that different account, might still just have your name on it, that different account you might not touch anyways. However, from an accounting perspective and trying to figure out what's part of the marital pool later down the line, having that separate account is a good way to pursue that and to figure that out.

The fourth thing I want to discuss is to consider getting a postnuptial agreement. Now, look, postnuptial agreements are very tough. Now, sometimes you may have a prenup which deals with these things, but if you're listening to this podcast, getting a prenup is a little too late. But if your state allows for postnuptial agreements, that may be a way to keep separate property separate. Now not every state allows for postnuptial agreements, but if your state does, and your spouse is willing to negotiate with you on it, then that is something to consider that can make the math. And at least simplify part of, this part of the divorce discussion later down the line. Now postnuptial agreements can happen in a few different circumstances that I see most commonly. It's hard to be married for eight years. And then in year nine, you say, I want a postnup. That's, that's a tricky proposition. I mean, if you can do it then great, but that's normally not the situation in which I see postnuptial agreements.

In one of the situations, I see postnuptial agreements a lot is right at the time of separation. So, if, if there's something going on, for example, I'll give you an example of something that happened recently as a business owner separating from their spouse. The only thing the business owner wanted is that if that business owner does some sort of deal with the business after the time of the separation, that the spouse isn't entitled to that now. The spouse still gets any portion of the business before they separated in their value, their fair share. But in this case, this business person wanted to, keep things separate and, and that's going to enable this person to, to run their business as they see fit for as long as they're separated. I mean, it's, it's a question of they're, they're still trying to work things out so they may get back together. They may get divorced. They don't know. But as long as they're living separately, they got a postnup.

Or, another time I see postnups is, is after a new marriage when you're older. I mean, there's a window of time where it's acceptable to ask for a postnup, but there are, if you are in a position where a postnup makes sense, and you may be able to ask for it, a consultant attorney, and it's a good time to think and helps can help keep separate property separate.

So those are just some things to think about in terms of keeping separate property separate. Or as I said, if you're the person and your spouse are arguing, well, this is separate property and they can't provide some base level information or provide the details on some of these things. Then it may not totally be separate. It may actually be marital property that you're, you're entitled to a sheriff.

Now, the last thing I want to mention on this point, that's, that's very relevant is that sometimes things aren't clear and there are shades of gray. And so oftentimes separate property is not 100% separate and there is a marital component to it. I'll give you a very common example. Let's just say you had a house before you got married and that house you, you, you bought before you got married. And then, a few years later, you get married. Your spouse moves into that house. You have your kids, blah, blah, blah, blah, blah. Now let's say that you decide to renovate the house or put an addition on the house you put in a new deck or a new roof, or a new, a new floor or, another add-on, addition to the house, whatever the case may be.

And that addition to the house substantially improves the home's value. Well, under that case, oftentimes maybe I'm just making up these numbers, but 70% of the house might be separate property, but the 30% of the house value may be meritable property because of some of those additions you made to it in some co-mingling and gray areas. It is a very tough and confusing and complicated area of family law that applies all the time. And so, the goal I always talk about with people is, all right, well, let's figure out all the ways we can argue that this is going to be separate property, or if it's your spouse, all the ways we can argue this should actually be meritable marital property. And let's just make the best case for you. Because oftentimes, it's not going to be 100% in one person's bucket or 100% in the other person's bucket. And there are a lot of shades of gray when it comes to separate property and keeping separate property separate and, and marital property.

So those are the four things just to think about and keep on the top of your list is the top of your mind, as you're thinking about separate and marital property and the best ways to keep it separate or prove that it's not separate. First is having good records. The second is to avoid co-mingling. The third is keep track of the income and dividends. And finally is a postnuptial agreement if that is available, or if you had one in place.

0227: Infidelity, Divorce, and How to Prepare - Interview with Dr. Marie Murphy, Relationship Coach Feb 16, 2021

0227 - Infidelity, Divorce, and How to Prepare - Interview with Dr. Marie Murphy, Relationship Coach

In this episode, we have an interview with Dr. Marie Murphy, Relationship Coach, and Host of Your Secret is Safe With Me podcast, a non-judgmental talk about infidelity. Learn more aboutMarien here: https://www.mariemurphyphd.com/about.

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

Dr. Marie Murphy: Hi, everyone. I'm Dr. Marie Murphy. This podcast is all about expanding the conversation around infidelity. I'm a relationship coach and I specialize in helping people who are having affairs make decisions about how to move forward that are truly right for them. On this show, we feature tools and guidance from my coaching practice, as well as advice from other professionals whose work pertains to the sometimes complicated business of romantic relationships.

Today, I have the pleasure of talking with Shawn Leamon, host of the Divorce and Your Money podcast. Shawn received his Bachelor's degree in economics and philosophy from Dartmouth College and his M.B.A. from the I.E. Business School in Madrid, Spain. Shawn is a certified divorce financial analyst and provides financial advice for people who are divorced podcast and his work with one-on-one clients. You can learn more about Shawn's services at DivorceAndYourMoney.com.

In his personal life, Shawn loves to push his physical and mental limits as an ultra-endurance athlete, and as an avid traveler, Shawn spends his time between his offices in Dallas, New York City, and Hanover, New Hampshire. He can often be found wandering the globe, and of the more than 20 countries he has visited, Brazil and Monaco are two of his favorites.

Before we get to today's episode, I want to let you that today's show is brought to you by Marie Murphy, Ph.D. Relationship Coaching. That's me. I provide shame-free, blame-free, non-judgmental relationship coaching. You can talk to me about the things that seem too messy or weird or stigmatized to share with your best friend or your spouse, or even your therapist, including but not limited to matters related to infidelity. To learn more about my work, go to MarieMurphyPhD.com.

Now, today's episode. Shawn, welcome, it's great to have you here!

Shawn Leamon: Hi, Marie! Thank you for having me.

Dr. Marie Murphy: It's a pleasure. You have an awesome book that is called Divorce and Your Money, if I'm not mistaken.

Shawn Leamon: That's right.

Dr. Marie Murphy: Right? Yeah, okay, great. I recommend this book to anyone who is staring down the barrel of divorce. It is clear and packed with hopeful guidance, and one of the things that's really interesting that you talk about is the value, and often the necessity, of having a really good divorce lawyer, but you also talk about the limits of what attorneys provide clients who are going through divorces. I think you quoted an attorney that you know as saying, "We attorneys went to law school so we wouldn't have to do math," and I can certainly relate to that, even though I'm not an attorney.

Can you say more about the limits of what attorneys provide, and why it's important to have a financial advisor, as well?

Shawn Leamon: Most certainly. I think at a high level, there's three major issues that go on in divorce. One is, of course, the emotional side: the relationship, your own emotions, emotions of your spouse, kids, et cetera. Of course, you should have help with that aspect.

The other element is divorce is, by nature, a legal transaction. Marriage is a piece of paper. Divorce, conversely, is another piece of paper that says that you're divorced. There are a lot of legalities to how to split up a couple and all that entails, and that's where having a good lawyer will help you.

Then on the other side of it is the third part of the financial element, which is all of your money. You're talking about houses, retirement accounts, how much support someone may pay or receive; what you're going to work later in life; are you going to move? How are you going to provide for the kids long-term? Is there a college fund or a retirement that may be derailed because of this process?

So, there are always many, many, many financial considerations in the divorce process, and it's very good, both during the divorce process, but also after the process, to work with a financial advisor because the things that your attorney is going to be negotiating for you, or at least many of the things the attorney is going to be negotiating for you, are going to affect you for a long period of time, perhaps many decades. So, getting those key financial pieces right and knowing what you should be thinking about during the process is very important so that you have a good financial future afterwards.

Dr. Marie Murphy: Yeah, cool.

Now, one of the things that I hear from clients fairly often, which you may hear as well, is their fears around divorce. Often, I hear people telling me, well, this isn't the right time for me to get divorced, and when I hear that, it's often because someone is saying that they really just don't want to deal with the discomfort and disruption that will probably inevitably come if they decide to go through with the divorce. What I always tell people is, look, you have a choice. You never have to get divorced. Even if you're unhappy in your relationship, even if you want to leave your marriage, you still don't have to do anything about that.

I work with people on the emotional side of these kinds of challenges, which is critical, but often what I find is that folks who are in this position of really resisting the idea of divorce or fearing the idea of divorce, even though they want to leave a marriage, is that they don't really know what all goes into the practical concerns, and so they're intimidated by what they don't know about the practical elements of the process.

One of the things that I found really interesting in your book is that you talk about why it might be a good time versus a less good time to get divorced. What are some of the financial reasons that make a better or worse time to go through a divorce, or initiate a divorce, I guess?

Shawn Leamon: It's one of the hardest questions and issues to deal with, is when to start this process. There is a lot that goes into ending a relationship. You mentioned some people might not know what's there or be ready to deal with some of the complications and hassles and everything else that is associated with it, and even if you don't know quite whether or not you're ready, or at least you're in the throes of things, one of the things that's very common with me, and with an attorney, as well, is doing your research and starting to figure out, all right, well, here's how this process may look. Here are some of the big questions I may be thinking about and starting to get some preliminary answers.

I'll give a financial version of that, which also gets to my broader question and some of the broader financial things. I always ask someone, "What do you want?" Let's assume... what do you want your future to look like? If you're in your 50s, for instance, you're probably going to live another 30 or 40 years. That's a long amount of time. Do you want to stay in the relationship as is? Do you want to make modifications to it? I'm not going to make any judgments because that decision is very personal and there is a lot of intricacies to that, but what is it that we're aiming for in how you want the rest of your life to play out? If you're even younger than that, if you're in your 30s or 40s, there's a lot of life left to live, regardless of your age.

So, the question in terms of financial things to be thinking about... well, there's a lot of considerations, one of which is there's two people who are part of this relationship, and so, if one person wants one thing... and I'm speaking from a financial perspective, as well, when I answer this... if one person wants one thing and you want something else, how are you going to figure that out? Sometimes divorce is the only option in that scenario, but there are sometimes alternatives.

The other thing is, hey, some states... and this is where I also say do your homework and start thinking about it... some states have some very potentially severe... I don't want to call them penalties, because that's not quite the right word... but there are milestones in a marriage that can affect how assets are split, how much money gets paid, how long money gets paid, what happens with kids. If we're thinking about... if you have kids who are, generally speaking, under 18, though that varies depending upon your state, there's a child support consideration, versus kids who are off in college where you don't really have to discuss that as much as part of the divorce process. If you want to move states... I mean, there's so many different things to start thinking about when it comes to that when decision, but you really have to... and I encourage everyone... is just do the homework.

A lot of times, if you do a lot of research upfront... and I talk to people who may not be getting divorced for five years, but because... maybe they want to stay together and stick around for the kids until the kids are out of the house. But they may be thinking, well, hey, if we get to that 20 year mark in our marriage and we're in a state where that 20 year mark could mean the difference between temporary alimony or spousal support and permanent spousal support, that becomes a really big deal in terms of doing things sooner or delaying things, depending on if you're receiving or paying.

There's a lot to think about when it comes to that decision from a variety of things.

Dr. Marie Murphy: Yeah, for sure.

What do you say to people who come to you who really want to be done with their marriage and done with their spouse, but their circumstances are such that it might not really be an ideal time to go through the bureaucratic process of divorce?

Shawn Leamon: There are options. One of the things that's important is having a clear agreement as to when things are supposed to be split, because one of the important financial considerations is, when do you stop the clock in terms of assets and valuing assets? What I mean by that is, if you have... a common example is, let's say you're contributing $1,000 a month to a retirement account. We'll try and keep math very simple, particularly in a verbal conversation.

Let's just say you're contributing $1,000 a month to a retirement account, and you're married. Well, 500 of that 1,000 is going to probably be your spouse's property when you split. So, if the clock is perpetually ticking, then you're continually contributing assets to that merit of accrual. But if you come up with a separation date or a separation agreement, and work out some logistics with your spouse, if it's possible... it's not always possible to do so without filing... you may be able to save yourself some funds in that category, and sometimes people do that for years. It's very much a question of when does the clock stop? A lot of times, the clock keeps running, and from a financial perspective, if you're getting a big bonus at the end of the year or the early phase of a new year, or if an asset is about to appreciate, or if you're... I know this is kind of a slight tangent, but if you're getting inheritance or a big gift, inheritance is generally excluded, but making sure that you handle those things properly is very important in that perspective, as well.

Dr. Marie Murphy: Yeah, so what it sounds like you're saying is even though you may have all kinds of emotional reasons for avoiding the divorce process, or delaying, I guess you could say, the divorce process, there may be some very sound pragmatic reasons for being proactive rather than resistant to acting.

Shawn Leamon: Yes, and I'll also give kind of a weird one, but it actually affects a lot of people, which is what people's work schedules are... not work schedules, but actual jobs. If two people are working and have reasonable incomes, that can have a big effect on terms of how much support is paid or received, but if one person has been out of the workforce for a long time, or recently got laid off and prospects aren't good, that can affect how much support gets paid or received be someone. There is a timing element to that, too, or if someone is graduate school and they're about to finish up, and they're going to have the capacity to earn a good amount of money, there's some things to consider, or re-training considerations where if someone... let's just say the kids are finally graduating, and in two years, you're going to go back to school and get a degree, or your spouse is, that could be an important financial decision to keep in mind in terms of when to separate or when not to if we're just talking numbers.

Dr. Marie Murphy: Yeah, interesting.

Okay, let's talk about infidelity. Since a lot of my clients are the one in the marriage who is cheating, there is often some concern about how infidelity will bear upon the divorce. Again, I think the folks that I work with have varying levels of knowledge about what this means in their state and what this means in the nitty gritty details of the division of assets, so tell us what this looks like.

Shawn Leamon: There's good news and some bad news, and it really depends on where you live. That's the other thing to keep in mind for people listening. Every state has different laws. There's general frameworks that are true for most states, but still, there are unique instances in a lot of states.

Now, the good news is all states have no-fault divorce laws, which just means that you can get divorced for any reason, and you don't have to prove anything, and even if someone does prove something, usually it's not a huge effect when we're talking infidelity. I say usually because there are particularly a handful of Southern states, is where you see this most commonly, where there can be some additional impacts if you can prove infidelity, and that can affect the asset split and can affect some other things. Now, it doesn't mean that a split is going to become 100% lopsided or something crazy, but it does affect things on the margin for some places.

Now, on the other side of that, probably 45 out of the 50 states, it has zero impact... almost who cares? There's a very practical reason for that, and the reason is up until 20 years ago, roughly... and of course, this evolved over time over a longer period... but if you had to prove infidelity or disprove infidelity, that was a huge part of the divorce process. Many, many thousands of dollars and hours and time were spent in the '50s, '60s, '70s, and '80s, and to some extent, the '90s, of who did what and trying to prove that, and that adds, on top of everything else that happens in divorce, another layer of complications, so... there was a movement.

Dr. Marie Murphy: That's a lot of legal discovery.

Shawn Leamon: Yeah, so there was a movement that every state was basically like, this is not a productive use of court time, and we're just going to say you can get divorced for whatever purpose rather than having to prove it.

Now, to take it a slightly different direction, here's what can come up can affect you, and it has to do with... the technical term is dissipation of marital assets, and that is if you have a girlfriend or boyfriend, and you are taking marital funds... or in between... but if you are taking marital funds and you are spending them on lavish vacations, gifts, cars, apartments, or a house, or whatever that is, and that's marital money you're spending, and your spouse finds out about it or can prove it, you can end up having to repay that money to your spouse later down the line.

Now, the good and the bad... if I'm being quite frank, this is very hard to prove, and it's very expensive to prove, but I've seen people who have spent hundreds of thousands of dollars on... sometimes it's something as simple as, and I don't mean to use the word simple, but as straightforward as an escort. I've seen people spend tons of money on escorts before, and that comes up, because that's relatively easy to trace when it gets into the hundreds of thousands of dollars. But if it's $10,000 here or a $1,000 there on a business trip, it's complicated. It's doable, but there comes a point, too, in this whole process, with anything in divorce, where it's like, hey, is it really worth getting a forensic accountant... is this worth spending $20,000 on a forensic accountant to find $20,000 in money that may or may not have been spent on an affair?

There's intricacies to it, but it is something to be aware of, that if you are spending a bunch of money on an affair... or another version of it; I know it's a little bit outside the context of your expertise, but if someone is a big gambler, that's another version of dissipation of funds, and that's going to Vegas every weekend and blowing lots of money; same idea as infidelity. You can get penalized for that in part of the divorce process.

Dr. Marie Murphy: Interesting, yeah. That makes sense.

Let's kind of step back from the infidelity thing and talk about the general pragmatic concerns for anybody who thinks they're potentially going to be getting divorced or is definitely about to be getting divorced. Where does one start? Let's say you're pretty sure it's happening. Where do you begin? How do you start to get organized? What are the key things that you need to do first?

Shawn Leamon: There's a few things. The two main things I would do... one is, regardless of how this process goes, get all of your financial documentation together that you have access to. Tax returns, just your home information, your retirement account information, bank accounts... whatever you know of that you have from a financial perspective, get it, because it's going to come up as part of the divorce process, and if you don't necessarily have it, because I work with a ton of people who may not have been involved in the finances, while you're still under the same roof, or somewhat under the same roof, or have access to things, put as many clues together as you can, because that can be very helpful for you further down the line.

The second thing I would do is consult with an attorney. Now, an attorney is going to ask for all the financial information, which is why I say gather that first. You're going to want to make sure that... and there's a lot of discussion about attorneys and what the appropriate attorney is, and who you should pick for your situation... but you should be very aware at a high level of the legal aspects that are going to apply to you and your situation.

It could be child support amounts and duration. It could be how things are going to be split. It could be something as fundamental as, there's actually multiple ways to get divorced and different divorce processes. So, having an attorney guide you through those options so that you can start thinking about them will be very good. It doesn't mean you necessarily have to hire that attorney day one. You may end up consulting with multiple attorneys, but you do need to understand the basics of what you're looking at and going to be dealing with so you can prepare yourself for what's to come, because it's going to be, for most people, a long, a difficult, a challenging process.

The other thing to be considering about all of that is, like to say, divorce is going to be over one day, and you're going be living alone or separately or in a new form, and so, if I were to add a third thing to that, it would be to start formulating what that life looks like in a post-divorce world so you can make the right decisions now to set yourself up for the future.

Dr. Marie Murphy: Yeah, I think that's so important. What is it they say? Begin with the end in mind. Have a vision of the future that you want to experience, even if it probably isn't going to be your reality tomorrow or next week or next month. Start to cultivate the vision of what you want your life to be like going forward. I think that's so important.

Shawn Leamon: Just one little, small, small actually addition to that... sorry to cut you off.

Dr. Marie Murphy: No, no, please.

Shawn Leamon: That is one of the most important things. I talk to people every day across the country about divorce issues. The question I ask pretty much 100% of the time is, "What do you want?" What do you want your life to look like? I can provide some commentary here and there, but ultimately, you're going to be living your life, and we just want to make sure that all parties, be it therapists or emotional, legal, and financial, that we mentioned before, are guiding you in the right direction given what you want.

Dr. Marie Murphy: Yeah, totally. I don't know if you encounter this with your clients, but something that I see fairly often is, people have a pretty good idea of what they don't want. They're pretty well aware of what isn't working for them, but the vision of what they might want instead is often pretty underdeveloped. I see all kinds of reasons for this. People have lived for decades believing that they have to do things in a certain way, or that it's not really okay for them to pursue their own desires, or that it's selfish for them to want things other than what their partner or soon-to-be-ex-spouse thinks they should want, et cetera. Do you see that, too?

Shawn Leamon: Unquestionably, and deciding what you want is not an easy thing and that's beyond my expertise, but what I do tell people, and I have this conversation multiple times a day every day, is I say, "Give me your top three, top three things you want, and give me your bottom three. What are the three things you don't want? Let's just start with that. We can figure out the rest later."

I'm just very quantitative. I can't help you through all of figuring that out, but give me three things that we can work towards and three things we should try and avoid, and we'll go from there.

Dr. Marie Murphy: Yeah, I love it. That's a nice, concrete starting place.

I, of course, am very qualitative. One of the things that I do do with clients is help figure out what they actually want. What would you choose? What would it be like if it were possible for you to believe that it's okay for you to want things, and that you can want whatever you want? That's part of the joy in the work that I do, but quite frankly, for a lot of people, that's hard, and that is where more of the work ends up being than actually the nuts and bolts of getting through a process like divorce where there are specific things that you have to take care of.

It's great. In a sense, it's challenging to change your conceptions of what's possible for you and what's possible in your life. Getting beyond our self-imposed limits can be quite a task, but it's so worth it. I'm sure you see this, too. I'm sure you see people coming out the other end of the divorce process and surviving and thriving in ways they never could have imagined.

Shawn Leamon: Everyone is going to come out of the other end of the divorce process, which is great. That's one of the most encouraging things, is I always joke, but I'm dead serious with people... the day we never speak again is a great day, because you're done with your divorce process and you get to live the rest of your life. But also because of that, you are going to be forced to deal with the nuts and the bolts, and you just have to deal with them.

There is an element of not facing reality, or at least not wanting to, because it's very, very difficult. I'm not saying it's easy, and it may take a lot of time to wrap your head around what's going on, sometimes years. But at a certain point, divorce papers are going to be signed; you're going to be living your independent life. You're going to have to deal with them, so do it sooner over later is just the way that I always put that.

Dr. Marie Murphy: Yeah. Yeah. I love that you emphasize at some point or another, you just have to accept that this is reality, however unexpected or painful or inconvenient it may seem. Yeah.

All right, let's talk about what you mentioned a little while back, about the actual options for the divorce process. What are your options? What are the different ways that you can approach this?

Shawn Leamon: There's a lot of different options in the divorce process, but what it really comes down to... and I'll give you a few examples... but what it really comes down to is how much you and your spouse are willing to work together without added conflict, right? There's no question that you're getting divorced for a reason. I understand that. Everyone understands that. The real question is, are you civil and reasonable given that situation, or are you going to make this an all-out fight?

To the extent possible, I strongly encourage people to be civil. It's not always possible. There are plenty of very difficult situations. But if you are civil, you have different options. There are versions... on an extreme case, if you're civil, you don't have a lot of assets, you don't have kids or complicated custody issues to worry about, then you can actually do a lot of the divorce process yourself, and what that looks like is you and your spouse sit around the proverbial kitchen table; you work out what's going to happen; you can do it online or go to an attorney and just say, "Draft it up for me." It gets drafted from an attorney or a paralegal, you have your agreement, you move on, and that's all there is to the process, and a percentage of people do it that way.

There are collaborative divorce processes and mediation processes where you... a little bit different, but the short version is with an attorney, with a neutral party, you and your spouse keep it relatively simple. You put all your cards on the table. It could be one session, it could be multiple sessions, depending upon the technicalities of the process that you're going through, where you all work it out on a room... or these days, via Zoom.

Dr. Marie Murphy: In the Zoom room.

Shawn Leamon: Yeah, you can do a Zoom mediation with a neutral third party or an attorney, and be a collaborative divorce process or a mediation process, and work out all the issues, and then someone translates that and takes it and creates an agreement.

Now, the more complicated process if I were just keeping it... the traditional divorce process is actually the toughest, because in that process, it's adversarial by nature. So, one person is the person basically suing the other person, and we have a plaintiff and a respondent, and the paperwork looks very, very formal, and one person is basically suing the other, and you have to go through some very complicated, often times very nasty, emails with attorneys, with the discovery process, which is just gathering all the financial information, figuring out how much things are worth.

But every step of the way can be a fight, and so, if someone is asking for... I'll give an example that just came up yesterday. Someone has a basic house. I don't know, it's $400,000, let's just say, approximately; nice house, not extravagant, but they're fighting over the value of the house. One person gets an appraiser, the other person gets an appraiser. Both appraisers have to fight out the valuation, and we're now $7,000 in legal fees on the value of the house. Now, you multiply that by absolutely everything that could be an issue, and you can see why that process can become very expensive and very complicated.

Now, unfortunately, one, this is common, and two, there are some couples that just can't resolve their issues, in which case, that's just the nature the process has to go, but there is a larger percentage of people who may end up going a more adversarial process that don't have to or don't need to.

When it comes to options, I always say, hey, see if something like collaborative divorce works, and look for a collaborative divorce attorney if you're halfway in decent terms with your spouse. Look for someone who's a mediator. See if that may work with your spouse. Look for someone who may just help you negotiate a couple of small issues; sometimes you agree on 80%, but need to work it out on 20%, or sometimes just one thing.

If you're in a position where you can go through the divorce process like that, then you should, and if not, when all else fails, you kind of have to go the traditional route where both of you hire attorneys who aren't generally very pleasant... and good luck.

Dr. Marie Murphy: Yeah. In the book, you talk about going to court and why it's so important to avoid it if at all possible. What are some of the reasons why you might have to go to court, and what should you keep in mind if you do?

Shawn Leamon: Let's talk about why you don't want to go to court first.

Dr. Marie Murphy: Sure.

Shawn Leamon: In most people's minds, because at least I am a big fan of crime dramas and have watched probably many lifetimes of Law and Order episodes, you envision some grand person talking on your behalf, and then you get to advocate, and there's great speeches, and the lighting is awesome, and people are cutting away to you, and this and that. No, sadly, that's not what really happens.

Most judges in most parts of the country are overwhelmed. They have hundreds, if not thousands, of people they have to deal with on their docket. Some courts in some counties... and a lot of this is very county by county, not even state by state... some counties, your judge may have just done eight traffic tickets in the morning, and then by the time, in your 11:00 AM right before lunch spot, they're dealing with your family law issue for 45 minutes, then they're going to lunch; then, they're dealing with a business litigation dispute. It's not the way it feels like, and they don't know you. I'm not going to say they don't care.

Dr. Marie Murphy: They're just thinking about lunch!

Shawn Leamon: Yeah, but judges are just people like us. They have a very important responsibility, but they aren't going to necessarily be able to get into every little detail of a case in your life the way that you think they will. They have hundreds of other people to deal with, and like every profession in the world, there are great judges. There are bad judges. There are great judges who have bad days. There are judges who like men. There are judges who don't like men. There are judges who like a woman in a blue dress. There might be a female judge who doesn't like women who wear blue dresses. Who knows?

It's not as fair as people may think it as.

Dr. Marie Murphy: Neutral.

Shawn Leamon: Neutral, right, exactly, as you may think... but, all that said, sometimes you have to go to court if you can't resolve things on your own. One of the things that happens is that every state has their own divorce process. You get assigned a judge, and a judge may ask... and it depends on your local divorce process; it's another reason to make sure you work with a good attorney... but part of the divorce process is let's have a preliminary hearing or preliminary meeting on one of these two things or three things or whatever, where the judge might say... so you might show up with your attorney and present the issues, and the judge will say, okay, well, we're going to set a trial for four months from now, but you're expected to have mediation in advance, or blah blah blah blah blah, and we'll set some conditions to get there. He or she will say, well, I hope you don't actually show up in four months. You should get this resolved beforehand, but we have this court date as a backstop.

A judge may say, oh, we need to make a ruling on a temporary support issue, so if there is some child support of spousal support that needs to be paid pending the divorce finalization... and when I say pending the divorce finalization, that could be a couple of years in many cases... then that's why you might be going in front of a judge.

But the real goal is, if you can avoid it, avoid it. But it is necessary in some points, and you'll need to be prepared if that is just part of your process.

Dr. Marie Murphy: Yeah, sure.

Were there any other options for the divorce process that we didn't touch on that you wanted to discuss?

Shawn Leamon: Those are the main ones. Broadly speaking, you can negotiate yourself or with partners, or just fight it out every step of the way. There's different ways you can negotiate it, be it do it yourself, divorce, or mediation, or collaborative divorce, or in some places, even arbitration, or even just around the kitchen table, as I said. You can do those, or you just say, "Let's fight."

Dr. Marie Murphy: Sure. Yeah. You talk about something in the book that I think is so important, not only when it comes to divorce, but in terms of any challenging situation in life, and that is figuring out what your least bad option is, or your least bad options are. Can you say a little bit about what you mean by that and why it's so important?

Shawn Leamon: Yeah, look, there is... and we touched on this a little bit before... there is a reality, and in my version of this, which I like numbers, sometimes there's only so much money to be split. You may look back and say, oh, I wish we had more here, or I wish we saved more, or I wish we didn't take this really expensive vacation every year, or whatever your wishes may have been... or he should be paying me more. She should be paying me more, or the system isn't fair because of X, Y, and Z. So?

That doesn't get us anywhere. You can complain all you want. You can wish all you want, but if you have... and I'm just going to make up this number... if you have $100,000 to split, and $50,000 is going to go to one person and $50,000 is going to go to the other person, then that just is. You can't say, well, I wish we had $350,000 to split. I wish you did, too!

Dr. Marie Murphy: It's not hopeful at this point, people.

Shawn Leamon: Yeah, I wish you did, too, but the reality is this. You need to make sure... and one of the biggest things I have conversations about is just accept reality. There are sometimes only two or three options in this process. They might not be great options. They might not feel fair to you. They may not feel good to you, but if these are the only options, and this is how things are going to play themselves out, you're going to have to just make the best one given the circumstances.

Dr. Marie Murphy: Yeah, for sure. This is something that I talk with people about all the time, whether it's related to relationships or job stuff or other life stuff. There is so much freedom that comes from realizing that some things in life are non-negotiable, but no matter what, you get to choose how you respond to those non-negotiables.

It's weird, because we want... by we, I mean collectively... people tend to want external circumstances to change so that we can feel happier, but that's not how it works. It's just not the way it is. That's not the option. The option is to change our internal response to the things that exist out there.

Shawn Leamon: I think that's a very good point. The best conversations I have with people are those who have figured out, or at least have a very good understanding of their internal responses, and have worked through all of that.

When I talk about... one of my big things from a financial perspective is... I hate to put it so harshly, because it sounds harsher than it is... I don't care how you feel. I just want you to make the right business decision given the circumstances, and you should treat this like you're the CEO of your life, because you are. There are some numbers, and there is some money that has to go here or there, or not go here or there. I don't care if you like it or dislike it.

It is the reality, and so, you go through it, but when people have done that internal work, or are working on that and have made a significant progress, it makes this process a lot easier, because one of the biggest things that's extra hard about divorce and the financial intertwining is that you're living it. There's a lot of emotion that's attached to that retirement account. Something I hear from guys all the time, mostly, is, well, I've been working for 25 years for that retirement account; she can't touch it! I'm like, well, that's not how the rules work!

This is, of course, a very traditional example I'm presenting, but maybe if your wife in this ultra-traditional example sounds... if your wife was raising your three kids who are now great adults and you're super proud of, even though there isn't dollar signs attached to that contribution, that was the partnership that you had and that's equally... I mean, I don't know how you value that, but it's just as valuable even though it's not a retirement account.

So, you have to just accept and work through those things. I just had a great conversation with someone yesterday who has been working... she had just come from her therapist's office, actually, before we spoke, but she had such a better understanding of... she was laughing at how absurd some of the things that were going on were, and of course, it doesn't make it easy, but she had a much better approach because she's been working on that internal stuff every day and every week.

Dr. Marie Murphy: Yeah. We could have an hour-long conversation about each of the things you just mentioned. I think the sort of bigger, overarching point is there is so much to be learned from interrogating our beliefs about money and what we're entitled to, and what it means for us to let go of our money, or share our money, or ask for money sometimes. That is really big stuff in our society, and I would suggest, always an opportunity for immense personal transformation and growth. It may not be the growth that you thought you wanted in your life at this particular point, but when you take that stuff on, so much change is possible.

What I see is that the more you're willing to reckon with whatever difficulties are facing you in the present, the better chance you have of being able to create a future that you're really excited about.

Shawn Leamon: 100% agree.

Dr. Marie Murphy: Yeah.

All right, Shawn, as you know, this show is all about expanding the conversation around infidelity, so I would love it if you could tell us about a time when you have been unfaithful to someone... maybe yourself, maybe another person, or to something.

Dr. Marie Murphy: Yeah, always a tough question. It flashes back to a time... I don't know, six, seven years ago... for context, I grew up in a military family and still have a lot of family members in the military. My dad was, and many other people in my family are now active. I didn't go, and I've always felt bad about that.

A few years back, I was driving in the car. I've always kind of regretted not going and thinking about part of my destiny, but it took a long time to figure out, that just isn't my life path. It doesn't burden me the way it used to, because I assumed that I was, I don't know, lesser than a lot of people in my family for that reason, and I let go of that as a terms of a piece of my identity.

Do I still miss it some? Yeah, of course, but I realized that sometimes it just isn't... it wasn't me. It wasn't my path, and it took a long time, a long time, to come to that conclusion.

Dr. Marie Murphy: Yeah. Yeah. I love that. Sometimes the hardest thing to do is to allow ourselves to be who we are.

When you said... I think you said, I still miss it sometimes, what do you mean by that?

Shawn Leamon: It's hard to describe without being around me a lot, but there's an element of me that... I love a lot of parts of the military. Some of those are just being a proud American, but also some of those are I like the challenge aspect; that's why I like the endurance... you mentioned very briefly at the beginning the endurance athletes... I find it incredibly inspiring, the people who sacrifice everything, and not necessarily death all the time, but are willing to put in every ounce of energy for a cause, or that cause could be the person next to them; that cause could be the country; that cause could be their family. Those who give it all, or at least willing to sacrifice some discomfort in something greater than them... and so, any way I can get a small piece of that makes me feel... and it is always just going to be a small piece, unfortunately, in my case, but just tasting that is something that I try to replicate in my life as often as I can.

Dr. Marie Murphy: That's so cool. Yeah, that's something we could talk forever about, too, but I bet you engage in elements of that in your work in all kinds of ways, maybe some that you recognize and some that maybe you don't.

Shawn Leamon: Yeah, now, that is an interesting conversation that I have never thought about before, so yeah, that would be something to think about.

Dr. Marie Murphy: Yeah. Yeah. All right. Well, we'll save that for another time, I guess. Reluctantly, we'll put that on the table.

Shawn Leamon: Next time!

Dr. Marie Murphy: Shawn, remind everybody where they can go to learn more about you and your work.

Shawn Leamon: Sure. Everything is at DivorceAndYourMoney.com, or if you ever just search Divorce and Your Money, you'll see lots of resources. I have a free podcast, a book, and lots of other just information that you can find just by searching Divorce and Your Money.

Dr. Marie Murphy: Awesome. Thanks, everyone, for listening. If you enjoyed today's episode, we would sure appreciate it if you would go on over to iTunes and rate and review this show. Thanks so much for listening, and Shawn, thank you so much for being here today.

Shawn Leamon: Thank you for having me. I really enjoyed it.

Dr. Marie Murphy: Awesome! Bye, everybody!

Thanks for listening to Your Secret is Safe With me, with Dr. Marie Murphy. Make sure to click Subscribe to get updates on our latest episodes.

0226: All About Divorce Mediation with Monica Mazzei, Mediator & Family Law Attorney in California Jan 17, 2021

In this episode, we interview Monica Mazzei, a top family law attorney in California with almost 20 years of experience. She will give us the ins and outs of mediation - and how it can be a great tool to resolve even the most complex divorces. To reach Monica directly, here is her contact information:

Monica Mazzei

Sideman & Bancroft

415.392.1960

mmazzei@sideman.com

https://www.sideman.com/professionals/monica-mazzei/

San Francisco, CA

Find the full transcript of the episode below.

Shawn Leamon: In this episode, I get to interview Monica Mazzei. And she is one of the top family lawyers in California. She’s worked on dozens if not hundreds of really impressive cases with some super successful people in California. And in our episode, she is going to talk to us all about mediation, the ins and outs, how it works, how to make sure it’s a good fit for you, how to get the most out of it. And why mediation may be really useful for your situation and why it’s something that you should consider, particularly in a world in which many courts are still closed, or at least are extra slow in a pandemic world.

And mediation may be one of the only ways you can get your divorce resolved in a reasonable timeframe. And it’s a much faster process. It is a more private process and Monica is going to walk us through all of the details of that. And for you listeners in California as well, as an added bonus she may be a good fit for you. So just something to think about. Without further ado here’s my interview with Monica. So today on the show I have with me Monica Mazzei. An attorney and partner at Simon and Bancroft based in San Francisco. Monica, welcome to the show.

Monica Mazzei: Why thank you. Happy to be here.

Shawn Leamon: Why don’t you tell us a little bit about yourself, where you are, where you’re from, your legal background, before we get into the meat of today’s episode which is all about mediation.

Monica Mazzei: So my name is Monica Mazzei. I have been practicing family law exclusively for nearly 20 years. I started practicing family law in Beverly Hills. And for the last 15 years my practice has been in San Francisco and Silicon Valley. I handle the financial part of the divorce, but I don’t handle any child custody. So I have a pretty unusual practice in that way. And being in the Bay Area as you can imagine, I work with a lot of technology companies, high net worth clients, and really enjoy practicing family law.

Shawn Leamon: And I want to get into mediation in a moment, but is mediation the focus of your practice or have you done other things in the past? I just want to get a feel and set the audience up for a little bit of your legal background and expertise.

Monica Mazzei: So my practice over the last year has been transitioning from representing clients in a traditional way in the divorce, representing one party either in settlement conferences or in litigation. Now transitioning to serving as a mediator. So I work with both parties to help facilitate an agreement. Those parties usually have their own independent attorneys that they consult with. But I’m there as a neutral third party to tell them what the law is, identify the issues, brainstorm ideas, and help them work out an agreement outside the court system.

Shawn Leamon: So let’s talk about the mechanics of that. And I think it’s very useful to have had the background from the traditional perspective that now you get to work with both sides and come with creative solutions. Why don’t you tell us a little bit more of just what is mediation and how does it work? And it’s a topic that everyone knows about in concept, but a lot of people don’t really know the details of what is mediation like. You said you’re the neutral person, but you also mentioned something about people also have their own attorneys. So can you kind of set up the background on the basics of mediation for us?

Monica Mazzei: Sure. So traditional mediation is when two parties meet with the mediator, nowadays it’s all by Zoom. In the pre-COVID world it was in-person with just husband and wife and the mediator in the room. And the mediator doesn’t represent either person. The mediator’s job is to tell you what the law is, identify the issues and give you some ideas about how you could come to a compromise that will work for both people. That’s a traditional mediation. Another version of mediation is where the parties show up and they each have an attorney with them. And so it’s kind of a group effort, a group mediation. And that you see in cases where there might be more complicated issues or very high net worth estates. Might be more of a group mediation with the attorneys. But I would say the most common and the traditional way is just the parties and the mediator, the three people.

Shawn Leamon: What you see most of the time it sounds like so they show up for a session and you’re the neutral person. And then it’s the two people talking it out. Can you tell us just what a session is like? You said it’s by Zoom, but kind of paint the picture. So are there breakout rooms or is everyone on the same Zoom these days? Just give us the mechanics of that.

Monica Mazzei: Sure. So typically we’ll start out with everyone in the same Zoom room and talk about what the issues are to discuss that day, how the day is going to work. And then typically we will be in breakout rooms. So each person will have their own Zoom room and I will shuttle back and forth in between. Really depending on the couple, sometimes we convene throughout the day the three of us again. But a lot of people really like having their own space, their own Zoom rooms feel freer to say what they want to say or ask questions. So I find that I think the most productive way is for people to at least part of the day have some space in their own Zoom rooms. Sometimes a mediation will last from 9:00 AM to five, six, seven, 8:00 PM and we’re able to resolve everything in one day. In other cases it might take two or three mediation sessions that maybe don’t go quite as long to reach an agreement.

So really depends on what the issues are. Mediation takes two people that are at least willing to come to the table and have a discussion and a compromise. I think mediation has become very, very popular in family law over the last decade. But with COVID and the courts being enclosed I think I’m seeing a flood of new mediation cases. People realizing that the courts might not even be accessible and this might be the most efficient way to get their divorce resolved or their premarital agreement. I don’t always just mediate divorces but premarital agreements as well. And I think people are really recognizing the value in mediation. Not only the cost savings but the emotional toll that a long strung out litigated divorce could take. And are just becoming more conscious of how they’re handling the unwinding of the relationship in general.

Shawn Leamon: Yeah. Let’s talk about some of those last points. We don’t need to get into all the details of the cost and what that may look like, but can you compare why it may be less expensive than the traditional route?

Monica Mazzei: Well, in mediation you’re paying the mediators hourly rate one typically the mediator is an attorney. If going the non-mediation route, you’re each paying separate attorneys. You’re litigating which is expensive. It’s a very slow process because the courts are so backlogged. They are not very accessible. Even in pre-COVID days, you may have to wait months to get in front of a judge if you have an issue that you need heard. It’s just really not an efficient way to handle a divorce. And I think that many, many more people are going to be turning to mediation in the next couple of years.

Shawn Leamon: Well, let’s talk about the speed issue because that’s a very important one because we all know that divorces can drag on a year or seven sometimes depending upon the situation. Hopefully not that long, but it certainly does happen. If someone is in a situation and I know lots of people who are listening are in the preparation phase and they’re trying to figure out a lot of things, but one of them is how do I go about this process? And cost is always a consideration, time to get everything resolved is a consideration. But if someone’s just starting the process and they think they can go the mediation route with their spouse, how long does it take assuming they can work through their issues in a few sessions? Kind of start to finish what does that look like for someone and walk us all the way through?

Monica Mazzei: Sure. I mean I think generally if there’s not overly complicated financial issues, I think three to four months is a fair timeline in a mediation. You have to choose your mediator and that entails both people agreeing on the mediator to use. So as you can imagine if two people are divorcing, making a decision about what mediator to use could take a few tries. Both people have to have a consultation with the mediator together and make sure they’re both comfortable with that person and they both want to work with that person. And then it’s scheduling the mediation and there’s some paperwork also involved and getting the divorce process started.

But the great thing about mediation and now doing it online is it’s much easier to work around people’s schedules, the work schedules of the parties. I do many mediations that are after 5:00 PM because people have kids and Zoom school and jobs. So it’s a very flexible alternative. So I would say generally three to four months from start to finish from choosing the mediator, getting the paperwork in order and having a couple sessions and getting a settlement agreement.

Shawn Leamon: Versus a traditional agreement, which takes what do you see on average with your cases if you were just going to go the litigated route? A year, two years, how long does that go?

Monica Mazzei: I would say two years is a good average for my litigated cases. The longest case that I had was eight years. That went on eight years but yeah, I think the average is two years.

Shawn Leamon: Got it. No, I think that’s great. You brought up something that was interesting in your answer which was that the couple has to agree upon the mediator and choose a mediator that will work for them. It’s a big decision, how does someone choose a mediator? One is find a mediator, of course it’s hard to find a mediator. It’s a topic that we discuss a lot on the podcast. But how do they find one, how do they choose one? And if someone is… And kind of third part of that, if someone finds someone they like you, how do you convince your spouse to also show up to that person and take the appointment?

Monica Mazzei: Well, finding a mediator now we have all these resources online. There’s a great website called mediate.com that has a lot of family law mediators listed on it. It’s a great resource, there’s a lot of good family law mediators on that website. Word of mouth is also another good way. If you have a friend and they liked their mediator definitely check that person out. I think choosing at least two people to have a consult with or interview is a good idea so you have something to compare and contrast to. You both have to be really comfortable talking to this person, talking about intimate details of your marriage or finances.

So I always advise people interview two mediators. You want to make sure that the mediator that you choose has experience in the issues you need to address. So for example if someone has a really complicated custody issue, I’m probably not your person because I haven’t handled any custody issues in over a decade. But if you’ve got issues with stock options or private equity or just private investments, I have a lot of experience in how to divide those assets and value them.

So you want to make sure the mediator has experience with whatever your issues are. Maybe you own a family business together and has the mediator ever dealt with that before? You want to ask those questions of the mediator. You want someone that’s familiar with your issues. Because the great thing about mediation is when I’m mediating a case for example that involves a family-owned business, I’ve had to handle that issue in divorce cases so many times that I can give the parties a whole bunch of ideas about what other people did and how they resolved it. And it just kind of helps for people to hear what creative options are out there and what other people have done.

Shawn Leamon: It sounds like one of the questions to ask is have you dealt with situations like mine or do you deal a lot with situations like mine? Are there other characteristics to look out for in a mediator? One that may be simple which I don’t know the answer to is are all mediators former attorneys or attorneys active attorneys or judges or what other kinds of things should someone be looking out for as they make their mediator selection? And also are there any red flags that you may want to look out for as someone looks at different mediator options?

Monica Mazzei: So, in California you actually don’t have to be an attorney to be a mediator. So in family law you get a mixed bag of mediators. Most I would say are attorneys or were and others are more mental health professionals or therapists. I think it depends on what your issue is. If you have a lot of custody issues maybe having a mediator that has a background in child therapy or behavioral therapy is a good choice. If you’ve got some financial issues I think having an attorney that has experience in those issues is probably the way to go. Not all mediators are created equally. I think a red flag would be a mediator who doesn’t have any experience in family law that mediate personal injury cases and this is their first family law mediation. You might not want to be the guinea pig for that mediation. So someone that has handled family law mediations before.

Shawn Leamon: And to that point, I mean if you were to have a therapist help with the mediation or something like that, how in your experience do people actually write up the resolution to a mediation session? Because I imagine you’re going to come to an agreement at some point in the process, but then what happens?

Monica Mazzei: So if you have an attorney mediator like myself, the attorney mediator typically prepares the settlement agreement. So that’s what I do, once the parties have reached an agreement I’m the one that prepares the settlement agreement. I always advise the parties that they should each have an independent attorney review it before they sign it. And I would prefer that, but that’s up to the parties. So if it’s a non attorney mediator one of the parties is going to have to have an attorney prepare the settlement agreement.

Shawn Leamon: Yeah, you mentioned other attorneys involved and I want to shift gears and discuss that for a bit. Is so in your examples normally there’s of course the two people who are actively in the mediation session, the people getting divorced or negotiating a prenup or whatever the situation may be. But they may have their own attorneys as well. Can you describe how that interaction and interplay works between what now seems like five people I suppose in this example?

Monica Mazzei: Sure. So when we have a mediation where both parties have their attorneys actively involved in the mediation session, it looks pretty similar. So for example if we’re on Zoom, we start in one Zoom room altogether and typically talk about how the day is going to be broken up or what we’re there to discuss. And then each party will go to a separate breakout room with their attorney with them. And I shuttle back and forth between the rooms. Cases where an attorney… The parties might want their attorneys to be involved, sometimes if there is a big disparity in experience, if one person has been running a business or is very financially savvy and the other person is not, maybe that is a good place to have attorneys present. Because again, the mediator doesn’t represent the parties. So if there’s a big disparity that might be really helpful to have attorneys there. In family law cases sadly, there is more common than I would hope abuse issues do arise, domestic abuse issues.

That’s another case where perhaps it’s appropriate for the attorneys to be involved when there’s that dynamic going on, just to make sure that the victim, the abuse victim, is feeling properly represented and someone is there to make sure that they’re being advocated for. And then I think the third situation would be really complicated financial issues. Any divorce case involving a hedge fund, a venture capital fund, a private equity fund, those cases typically attorneys are going to be more involved because they’re very detailed financial issues that at least one of the parties might not be familiar with. Those cases typically the attorneys are going to be involved during the mediation and present for them.

Shawn Leamon: That’s a good segue. I know some attorneys who aren’t big fans of mediation sometimes and they’ll say, no, no, no, no, no, no, no, no, no. If you have complicated issues and you can’t deal with them in mediation, we got to subpoena this and fight that and do this order and that whatever. How do you handle complex issues in mediation? And is it a good forum? How does that work itself out? Because I know some people rightly or wrongly may think it’s not applicable or not feasible in a mediation session to come up with solutions for some of these things.

Monica Mazzei: It all depends who the mediator is. I think that mediation is a great way to resolve cases involving those types of businesses and those types of compensation. If everyone involved has the same experience level including the mediator, you can really cut through a lot of the education of a public sitting judge, for example who doesn’t know how hedge fund managers get paid and doesn’t know what carried interest is. If you have a mediator that you don’t have to educate that knows how everything works, you can hit the ground running and start negotiating a lot sooner than you would ever get in the court system. And there’s also accountants involved and in those cases, there’s a big team of people, but it is a great way to settle cases involving those businesses. If the mediator is financially savvy enough and has experience, it really is efficient and you can really come up with some creative out of the box solutions.

Shawn Leamon: And so it sounds like even though mediation can be faster and there’s a lot of benefits to it, it sounds like you can still bring in a lot of the traditional divorce resources that you would use perhaps in a litigated manner but it’s just not the same atmosphere in which you may have valuations, you may have different things you have to do with stock options or figuring out what’s going on with the hedge fund or private equity fund. And you may need to bring in some other financial professionals, it’s just the context. And the way that you end up at a resolution is just different and a lot more efficient and streamlined.

Monica Mazzei: Yes, more efficient, less adversarial. But I think there’s a misperception sometimes in the public that mediation is like everyone’s sitting around the table, holding hands, singing songs and it’s too touchy feely, how can you possibly resolve a complex case with a hedge fund that way? And it doesn’t really work that way. Mediation can definitely deal with high level complex issues. Just because it’s mediation doesn’t mean that we are throwing out all the rules and how things work and it’s just reaching an agreement. One, that works for everyone and two, is a lot more efficient.

Shawn Leamon: When coming up with an agreement a lot of times you’ll hear or someone will say well, the judge will say this and that’s the guiding principle for how people come up with a resolution. Is that the case in mediation? What I’m getting at is there’s the letter of the law, but the letter of the law isn’t always clear, but a lot of times people say, “Well, what would the judge say? What if we just took it out?” And that’s kind of their position. Or is there some flexibility in mediation? How does that dynamic play itself out?

Monica Mazzei: Well, the great thing about mediation is people can agree to anything that works for them. When you go to court and you go before a judge and in family law in California we don’t have juries and family law. So you have one judge that makes the decision. In my experience, both people leave the courtroom not happy with the decision. Both people, they have no say in shaping it. Sometimes you get a judge who woke up on the wrong side of the bed or who didn’t understand what the issues were and totally got it wrong. Mediation gives the parties an opportunity to have a say in the resolution. And they often will say well, what would happen if we went to court? And so I do give my opinion. Well, the law says this.

But I always like to follow it up with, but let me tell you what some other people have done in mediation with the same issue and give them some ideas to start thinking outside of the box and a way from maybe just what the law provides. The law is not flexible, it doesn’t conform to the differences in families and how a particular family works. And it’s very cookie cutter. And I don’t think that necessarily works in a divorce situation. In mediation you can really get creative. As long as we’re staying within the tax code and things like that, we really can come up with anything that works for that particular couple.

Shawn Leamon: And on the other side, what about privacy? I imagine that in a mediated session you don’t have to just… I mean you disclose things with your party as part of the process, but what kind of public information gets disclosed in mediation versus a traditional process?

Monica Mazzei: Everything in mediation is confidential. So unlike if you’re in court, you’re in a public forum. Sometimes there could be 30 to 40 people sitting in the courtroom, hearing all about where you live and how much money you have and your kids’ names. It’s a very public way to go through a divorce. In mediation, no one is there except for the two of you and your mediator and perhaps your attorneys and everything that you say in the mediation is confidential. And there is very little paperwork that has to be filed with the court if you’re in mediation. So the petition to start the process and we’re even able to submit a confidential settlement agreement to the court. So very, very limited paperwork in the court system. But I think more importantly you’re not in a public forum and you’re in a conference room or on Zoom with the mediator.

Shawn Leamon: And so we’ve gone through a lot of the basics of mediation and I want to get to a couple of concluding questions. The first is what happens if mediation doesn’t work, what happens then?

Monica Mazzei: Well, if mediation doesn’t work then the parties will have to each get an attorney if they don’t already have one and decide what their next step is. Are they going to try to just negotiate through the attorneys and not use the mediator at all? Or are they going to go the court route? Which to me is always a last resort. I think the cases that fall out of mediation are the cases that were just not good cases for mediation to begin with.

Shawn Leamon: And I think that’s a great transition to my last question or one of my last questions is someone’s thinking about mediation, I think it’s a very compelling and I believe a lot of people after hearing this will say this is a really compelling option. If someone is thinking about it, how would they know if they’re a good candidate for it? Why don’t you just kind of go over those key points to say like yeah if you’re in this situation here’s how you know that mediation may work for you or may not work for you, but can you kind of go through that?

Monica Mazzei: Mediation takes two people. You can’t force someone to participate in it. So that is going to be the big telltale sign. Is, are you both like-minded? Do both people want to go the mediation route and are they both going to be engaged in the process? If you feel like you’re dragging someone to mediation kicking and screaming, that’s probably not a good case for mediation. Both people have to be willing to say, “This is horrible, going through a divorce is horrible, but we both don’t want to go to court. So let’s pick a mediator and use this alternative. I still don’t like you, but I’m willing to go to mediation.” So fundamentally that’s not going to be the situation for everyone. If you’re met with resistance, then you’re not going to have an option. And in my experience trying to force someone or cajole them into mediation you’re just setting yourself up for failure and probably a waste of time.

Shawn Leamon: So mediation doesn’t have to be easy, but both people are going to need to agree to it?

Monica Mazzei: Yes.

Shawn Leamon: Well, Monica if people want to reach you, particularly the California listeners, what’s the best way for them to do that.

Monica Mazzei: They can email me at mmazzei@sideman.com.

Shawn Leamon: Excellent. And do you work all over the state in the Zoom world?

Monica Mazzei: Mainly just California, I’m only licensed to practice in California. I can handle mediations outside of California, but I wouldn’t be able to prepare the settlement agreement.

0225: Understanding Commingling In Divorce - And How to Protect Yourself Dec 27, 2020

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In this episode, I want to discuss an important term called co-mingling. That is the process in which you can inadvertently make separate property, marital property. Co-mingling is a very important term when it comes to divorce, and I'm going to use an example of an inheritance because it's a very common example.

Let's just say you receive an inheritance from your mom, I'm just going to make it up, and let's just say you received $100,000 from your mom because unfortunately, she passed away. Well, if you receive that money, the perfect circumstance or the ideal circumstance is you deposit that money into a separate bank account and you never move it to your joint bank account and you only track and... In a perfect world, you don't even spend that money. You save it for a rainy day. But let's just say you have to use some of it for a down payment on a house, and so you use that money for a down payment on a house. You and your spouse now have both of your names on the house, but that down payment came from that inheritance. That's a common example that I hear almost every week. Or even you needed the funds for daily living expenses and you started mixing those funds in and you move that money to a joint account. Well, when it comes to the time of divorce, you have to say, "Well, hey, is that money, is it separate property or is it marital property?" And it starts to get really complicated because it depends.

Now, if you got that money first, and let's just say you used it for life expenses, and you used that money and you put it in a joint account from that inheritance money into a joint account. Well, those funds may have become marital assets, inadvertently, because of that. Or if you used those funds for a down payment on a jointly owned house, does it immediately become marital property? Now it gets a little bit more complicated. This subject is very complicated and it depends on your individual circumstances, but I want to give you the highlights as to what you're going to be thinking about if this is an issue in your divorce.

Conversely, you could be on the other side of this situation too, where your spouse got an inheritance, and sometimes it's a pretty substantial amount, and you're trying to figure out, "Well, hey, we used some of that inheritance for these one, two and three things. Does he or she get credit for that money? Does that money come back? Is that joint property? What's the deal? What do we get to do with that?" So that is where this process becomes very important to understand from both sides of the spectrum.

So the first part, and the term that I'm going to introduce to start, is called tracing. So the first word is co-mingling, and that's the process of making a separate property, marital, broadly speaking. Now, tracing is a very important term, and that is figuring out where the money came from. Simple as that. So if you had, let's just say, a gift from a parent, and let's just say that gift came or that inheritance came eight years ago, and then five years ago you used that money to buy a house. And then now fast forward five years, you're facing a divorce situation. Well, you want to keep that inheritance separate, is my guess, and you don't want to split the funds that your parent gave you. So how do you figure out and prove, basically, that that inheritance is separate property? And conversely, if you're the one who's contesting this situation, you're going to have to make your spouse illustrate where all of that money came from and have the records for it.

So that's where tracing comes into play. Very simply, it's just figuring out where the money came from and going through that process of, "Hey, eight years ago, those funds were deposited into this account. And then five years ago, it was wired to this company for the down payment on the house." And you need to go through that process and have all the steps involved, and it's not an easy one oftentimes. So here's where one of the most important things you'll hear me always talk about is having good documentation. That's the problem and that's really the biggest challenge with co-mingling is having the documentation.

If you've been married for a long time, and I speak to people who've been married 20, 30, 40 years oftentimes, and you may not have clean records for where every dollar went. It's something that's very important to think about because state rules can vary on the subject in terms of what you should do in those situations. And one of the things you're going to really need to focus on is gathering documentation. Because sometimes in a state, the burden is, and really you need to talk to your attorney about this point because there are a lot of nuances on the burden, but some states will say, "Hey, unless it can be proved it's separate property, it's automatically marital property." Other states have a little less restrictive or a little bit more flexible burden on that very point.

So you really need to understand what's happening, but the clean way to figure things out is to have records. So to get records, you can... The first thing is that even if an account is old, you might not be able to log into your Bank of America account or Chase account and see records more than two or three years old. But if you walk into your local Chase branch, or you set up an appointment, you may be able to get records from the time you've had the account. I've been in banks with clients before where you go and you figure out, "All right, well, here's the time that we had the account" and they'll go back and they can go to the bank and get 10 years of records. It might take a couple of hours, but it is a very doable thing to do when you go into the bank.

Now, it can be tough and you still may not have all of the records, but also look for old correspondence. If you've had the same email account, or if you have any mail, or if you keep a safe or a file cabinet with important documentation. Or sometimes if it's related to an inheritance, you may have or you may need to contact the old attorney who handled the paperwork if an attorney handled it. Or your sibling, sometimes maybe you don't have it, but if you have a brother or sister or something, you might be able to contact them and figure out what kind of shreds of evidence sometimes it is, particularly, we're talking about something 10 years or eight years in the past, you may have to keep things clean. Now, sometimes it's not a big issue when it comes to documentation and you have everything there. But if you don't, those are some tips I would suggest for you.

Now, let's just say not all things are clean and smooth, and let's just say this is going to become a big issue between you and your spouse as part of the divorce process. What do you do? That is you're going to have to bring in some experts. There are forensic accountants and CPAs who do this work and can help figure out, "All right, what part is separate? What part is marital?" And sometimes they may even come up with estimates. But if you get a good accountant, they will look at what of information that you have or that your spouse has, and they will say, "Okay, well, I can see 70% of the picture" and they'll say, "Okay, well, from my best judgment, I think this amount of money is separate property and this amount of money is marital property." They can sometimes estimate or even trace with imperfect information where funds came and went.

So if you have a lot of money at stake, and sometimes it is, if you're dealing with hundreds of thousands, if not millions of dollars that you're trying to figure out, "Hey, what is separate property? Hey, what is marital property?" Then you should strongly consider getting an accountant or a forensic accountant to help you.

Now in a perfect world, and I always say this about hiring experts who do valuation or forensic accounting, et cetera, is in a perfect world, and we're talking about divorce so almost nothing is perfect, you would get a neutral person to look at all of the available documentation that you and your spouse agree upon. And will have that person analyze everything, prepare a report, and those are the numbers that you use to determine separate or marital property. Now, that's not always the case. Certainly, I see all the time where one person is hired by you, one person is hired by your spouse, and they come up with very different valuations of what is separate property and what is marital property from the co-mingling and the tracing that they do. And you have to basically fight it out, unfortunately, or come up with a middle ground.

So something to think about, but as I said in the previous episode is really to the extent that you can keep things separate and avoid making things separate, or making separate property marital, you should. Now, not all the time are you walking around your life and thinking that I'm going to get divorced tomorrow and therefore I need to have done these things eight years in advance. I understand that life doesn't work that way and so you shouldn't necessarily feel bad because you've made the wrong decision, but you do need to... Or you didn't have the records, or you didn't keep things as cleanly as you would like. But even despite that is you need to get on top of and start collecting and getting the information on all the records that you don't have and start planning for the future and putting yourself... I always say this is even in an imperfect situation and imperfect world, you need to start putting yourself in a very good or the best situation you can for the future to ensure, or at least to help ensure, that things are going the way that they should through the divorce process.

And if you gather up as much documentation as you can, you gather up some of the records, you might not be able to get 100% of the money back or prove 100% is one way or the other, but hey, if you get 80% of the way there or 70% of the way there, you are still in a much better position than before.

So the important term for this episode is co-mingling. And if you are thinking about your individual circumstance, this is a really complicated term, both legally and involving individual circumstances, and involving your state's laws, but I would type in co-mingling in your state and I would look at some attorney websites. I would contact your attorney and figure out, "Hey, what do I need to be thinking about both good or bad when it comes to co-mingling in my situation?" Because it can mean the difference in many thousands, hundreds of thousands, or in some cases, millions of dollars that go from one person to another.

0224: How to Handle Inheritances and Gifts in Divorce Dec 03, 2020

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It's been a little while since I have done an episode and it's been a very busy couple of months, so apologies about that. But I want to discuss a topic that's been coming up quite a bit in the coaching calls.

And that is how you handle inheritances and gifts during a divorce. It's a tricky question. And it's an important question because oftentimes your parents, or someone, will leave you a substantial sum and you want to protect that during the divorce process. Sometimes that inheritance money comes at a poorly time to time where you can't control it. Someone passes away, unfortunately, and you receive some money maybe right before a divorce or during the divorce process. And you're trying to figure out, well, what should you do?

I just spoke with someone the other day who had filed for divorce and then, unfortunately, a parent passed away, eight months into the divorce process And they were wondering, "Well, how do we handle this new inheritance that arose, and what to do about that?" And so in this episode, I want to give you some tips when it comes to handling gifts or inheritances and how to protect that property. And really, the main thing is how do you prevent it from becoming a community property, which is the property that is subject to, or that you're going to end up having to split as part of the divorce process.

So let's go through a few quick tips.

The first thing is if you receive an inheritance, or you receive a gift from someone, keep that stuff in your name only. Meaning, if you get some money, let's just say a hundred thousand dollars, because I'm going to use that as an easy example. If the parent passes away and gives you a hundred thousand dollars, don't deposit that into a joint bank account. Set up a separate bank account that's in your name only. And we're going to call it your inherited funds account. And so put the money in that bank account separately so that it doesn't get commingled with the other assets. And that could get complicated because not always is an inheritance a gift. Sometimes it may be a home or a car or any other type of property. Whatever it is, make sure to title it in your name only.

The second thing is don't let your spouse make any contributions to that gift or that inheritance. And the house is the easiest way to illustrate that. If you inherit a house and let's just say it's been run down for a little and it needs some repairs to get it up to speed. Well, one of the things that you should do is don't let your spouse contribute financially to those repairs because the value increase of that house, or even the whole house itself, depending upon where you are, could now come into question as part of the divorce process. And sometimes this may be a house that you maybe just made renovations or adjustments on a few years ago, and now the divorce process is happening. And now you're wondering, "Well, is any part of that house marital property, because my spouse helped renovate the master bathroom and bedroom in there?" And so if that's your situation, be very careful and think through what you're going to do with that inherited property. And if you can keep your spouse from making contributions to it, financial or labor even, then you should do so.

The third thing is to consider transferring that inheritance or gift to a trust. Now, oftentimes a parent who was savvy in estate planning, or at least inheritance is most commonly from parents, which is why I use that example, are very savvy in their estate planning. And so oftentimes as part of their estate is they will give you that property, be it cash or the home or whatever, jewelry or whatever it may be, and they might require it to be put in a trust as part of the process. But if that wasn't the case for you, I would consider setting up a trust.

Now there are lots of complications and nuances to having a trust set up for you. But what I would do is if you have an inheritance coming, or you recently got one, or you're thinking about it, I would go and look for an attorney called an estate planning attorney or a trust attorney. And they're kind of one and the same and they can illustrate options for you to set up a trust. Now, usually, there are some fees involved, of course, we're talking about legal work, but it can be worth a little bit of trust set up in the short term to protect you in the long-term.

And then the last thing I would strongly suggest is to keep really good records about where the inheritance came from, how much money was in there, where the funds went, et cetera, et cetera. One of the most common things that I deal with and see people make a mistake with is not keeping track of the money and keeping track of the details of an inheritance. And so what can happen is, let's just say you got an inheritance seven years ago and you knew it was approximately $123,000 but you don't remember the exact math that was there. Well, one of the things that you can do, error the exact amount that was in there because seven years have passed and you want to know. Well, if you don't know what that amount was and your spouse is going to contest it in terms of how much was actually in that inheritance, you could be setting yourself up for a world of potential hurt in that you may end up losing part of your inheritance in the divorce process since you didn't keep accurate records.

And so, one of the things that is most important to do is make sure that you keep track of the paperwork. Keep track of any emails. Keep track of any bank statements. Keep track of any lawyer's correspondence or documentation to ensure that the information that you have from the inheritance is kept and kept track of over time and kept cleanly. Because one of the things that can happen is, let's just say, hypothetically, you've received an inheritance of that $123,000, and the next year you purchased the house with your spouse and use those funds as a down payment. That's something that's very common. And then three or four or five years or 10 years, whatever the amount is, goes by and now you're facing divorce. And you're like, "Well, I contributed $123,000 to that down payment of the house from this inherited gift."

Well, the good news is that even though you may not have followed my initial steps or initial tips, my tips one, two, and three, that you still may be able to get credit for that money as part of the divorce process and consider it still separate property if you have accurate records. But you need to make sure that you have very accurate records of where every dollar came from and where that inheritance money went. On the other hand, if you didn't keep accurate records, you may lose those funds and it may become a costly issue. And it's something that you want to be very careful about. So it's one of those things where you need to make sure that you find every piece of documentation that you have related to that.

Now I've been talking mostly in the context of inheritances because that's the most common, but oftentimes I also see a parent give a gift to you and or your spouse. And what can happen is some money flows in, it's usually pretty informal, gifts around $14,000 or so are not taxed. But sometimes they're bigger gifts. And you forget, because of the size of the gift, to go through all of the steps and document everything. You may have just had a phone call with your mom or dad and your mom or dad just said, "Oh, I'm writing you a check for, here's a $10,000 check for some spending money." And if you're fortunate enough to have parents who are in that position and then you're like, "Oh great. This is a good check." And you use it for something important, but you want those funds back as part of the divorce process because you feel it's appropriate given the situation.

Well, one of the things you should make sure that you do is you need to have a list of documentation from your parents. Your parents, your mom or dad should say, "Hey, I wrote you this check for $10,000." You should have some emails from the time of the check. You should have other correspondence from that time. And you should indicate that all of that stuff happened and happened smoothly because that way you can prove where those funds came from. But just because it's casual or just because you may not be thinking about it at the time and divorce may not have even been on your radar at the time of the gift, which is okay, but you need to make sure that whenever money is coming in from a source, particularly a family member, that those transactions are documented and you gather that documentation.

So the four most important tips for protecting your inheritance or gifts in divorce. And I'll just go through them quickly. One is to keep inheritances or gifts in your name only. The second is don't let your spouse make any contributions to that account or that property to ensure that it stays separate. The third is to consider contacting an estate planner and transferring that inheritance or that gift to a trust. And fourth is to keep really good records as to where that inheritance or gift came from.

0223: How Much Will Divorce Cost? (Answer: It Can Be Expensive!) Sep 21, 2020

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One of the most common questions I get, and one of the biggest anxiety producing questions I get, is how much is divorce going to cost? How much should I expect to spend on the divorce process? And if you're going to ask your attorney how much divorce is going to cost, they're going to say it depends. And I've never known an attorney to give a straight answer when it comes to the cost of divorce.

And so in this particular episode, I want to go through some considerations in terms of how much the divorce may end up costing you in terms of the financial check that you might have to write. So I'm going to just give some ranges and some considerations and things to think about as it comes to the divorce process.

Now everyone's situation is different. Divorce can cost more whether you live in a city, versus a suburb, versus a small town. Divorce can cost a lot depending upon what assets you have, what needs to be done. There's a lot of variations, but I'm just going to give you a range. And so on the low end, from what I see per person, I see the minimum, minimum, minimum, most people are going to spend on their divorce is about $5,000. And that's for one person. And so it'd be $10,000 as a couple. And that's assuming that everything goes smoothly in divorce, and yes, there are ways to make divorce go smoothly, but that's your best-case scenario.

Now, the normal range I see for people is usually in the 20 to I'd say 35 or $40,000 range per person. Sometimes it's closer to 15. Sometimes it's closer to 50, but that unfortunately is not uncommon when it comes to the divorce process. And sometimes if there's just a lot of fighting, a lot of complication, the process is going to drag on for several years, the bills can get into the hundreds of thousands of dollars, and I've seen that too.

And so what I want to go through is first to be aware of the cost of the divorce, and if you're going to be going down this path. I mean, that's why you're listening to this episode. There is a big expense, and you have to really think about what's worth it, and what's not when it comes to investing in the divorce process. And I want to go through a few ways in terms of explaining both how you could control the cost of divorce, and also how to figure out just a few quick methods on how to pay for it.

When it comes to minimizing or controlling the cost of divorce, really the biggest expense when it comes to divorce cost is how much you and your spouse disagree on certain items. To put it a different way, is if you and your spouse can come up with solutions on your own, and come up with as much of an agreement as you can between the two of you and not involve attorneys, the cheaper the divorce will be, the less expensive it will be.

And so if everything is a fight, and I use an extreme example all the time, is I grew up with a middle-class family. They did well for themselves, saved, and they had several hundred thousand dollars of savings, and a house and the normal stuff. And they spent 100% of their money and then some fighting over everything, from not just the big items like houses and retirement accounts, but all the way to who gets the dining room set. And unfortunately, they ended up in the divorce process, they spent hundreds of thousands of dollars on legal fees, and that was all the money that they had.

On other examples, I know billionaires who've gotten divorced for less than $20,000, and that's because they came up with an agreement ahead of time with their spouse. And yeah, maybe the check they're writing to their spouse is going to be pretty substantial, but they knew what they were going to do. They were smart about legal fees, and they did a very good job with it. And so really it just depends on how much fighting there is.

And just some other costs to think about is if you go the full litigation process, where you get an attorney, your spouse has an attorney, and you're going to discuss and fight about every detail. That's going to start at a minimum of $10,000 a person. Every time you have to hire an expert, be it someone to do an appraisal for a business, do an appraisal for a house, do a forensic accountant. Each time one of those experts get brought in, expect that to be another 10 to $25,000 each, in addition to legal costs on top of that from analyzing the reports and discussing it. And if you were to take that to trial, that check just keeps getting larger and larger.

Divorce attorneys are very expensive. I mean, on the low end, I think a good attorney can be 250, $300 an hour. And on the high end, I know attorneys who are 900 to $1,000 per hour of their time. Imagine that. So a 15-minute conversation can cost you $150 sometimes, with your attorney, or sometimes just sending a one-off email. And so you need to be very smart about how you interact with your attorney, and how you use that attorney.

I already mentioned other professionals, but there are also court fees. You have to think about an attorney's full team, paralegals, assistants, et cetera. There's a lot that can go into a divorce and divorce fees. And so one of the questions that you should be thinking about, and one of the most important things we talk about in the divorce process, or I talk about on coaching calls, is how are you going to pay for this? That's one of the most important questions that I get from people all the time.

And I'm going to go through just a couple of quick items to think about. If you have money in a joint account, generally speaking, you're entitled to half of those funds. Generally speaking. So if you need to withdraw half those funds to start putting your little war chest together for attorney's fees, then you should do so.

Now by doing so, you're also going to definitely be tipping your hand in the divorce process, but that's something that may be necessary, particularly if you didn't originally have funds to go through the divorce process. If you have savings, then you can consider using your savings. If you have savings in your own name, if you need to borrow funds from a friend or a family member to make the initial retainer for an attorney, then borrow funds from an attorney.

And then there's also retirement accounts and home equity lines, and other things like that you should be thinking about. But when you walk into an attorney's office and say, "Hey, I want to hire you for my case", you should be expecting to write a check for anywhere between five and $25,000. The day you hire that attorney and anywhere within that is very much normal range.

And so I just want you to be really cognizant of the cost of divorce, and the things that you can be thinking of. The biggest factor as I said is acrimony. And so if you can come to, and I work with a lot of people in this situation, where you and your spouse, let's just say, there's 10 issues that you're discussing and have to fight over, if you can get to an agreement on eight of them, and then you only have to work out two issues, then that can save you a lot of money in your divorce because there are only two things that need to be discussed versus starting from scratch with all 10.

And so things like that can help you save money in divorce, and maybe it can be a small thing like, hey, if you can start a negotiation when possible with your spouse, it's not always possible to negotiate with them. But if you're in a situation where you can say, "Well, I think we're going to both keep our cars." Well, you've already started an agreement on that.

And that's one less thing you can check off the list, and just getting the cars agreement set in stone before having attorneys have to negotiate over it could end up saving you a few thousand dollars. So sometimes even a smaller items that you can come up with a can help you, but if you continue to drag out the process and every attorney wants to beef up there, I won't say every attorney, but it doesn't hurt the attorneys when you have more to fight about. It's something to be aware of as you go through the divorce process.

So just as a quick recap, on the low end, divorce can be five or $10,000 a person to get things done. If you have an attorney involved, and on the high end, it can go, I'd say the average is usually around the 25 to $50,000 range. But if you are fighting about everything and this goes to trial and you have money to take it all the way to trial, legal fees can get to $100,000 or more. So be very wary and very well prepared when it comes to figuring out what's the right investment that you need to make for your case.

And sometimes I'll tell people like, "Hey, I don't know if you want to spend an extra $10,000 on this issue, because it may not be worth it for you," but other times I'll say, "Yeah, you know what? You should spend $25,000 on this issue because if you get $300,000 in return, that's a useful return on investment to invest in legal fees."

Every situation is different and there are always lots of complications depending upon what's going on, but be prepared for the cost of divorce if you're going in that direction, and go in with eyes wide open. Regardless, it's going to be an expensive check that you're going to write, and it's up to you to be prepared for it, and determine what really is appropriate given my circumstances that you're willing to put into this process to secure your future and get through it in one piece.

0222: Divorce Funding with Nicole Noonan, CEO of New Chapter Capital, Inc. Aug 10, 2020

To get in touch with Nicole Noonan, visit newchaptercapital.com or call (212) 404-7807. Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

Shawn Leamon: All right. Today we have Nicole Noonan. She is the CEO of New Chapter Capital, which is a firm that deals with a topic we haven't covered in a while, but a very important one, which is divorce funding. Nicole, welcome to the show.

Nicole Noonan: Thanks so much. Happy to be here. Yeah.

Shawn Leamon: Why don't you tell us what New Chapter Capital does? What is divorce funding? What does that mean?

Nicole Noonan: So New Chapter Capital and divorce funding provides liquidity for individuals going through a divorce, that would not otherwise have access to it. So we provide an advance against the potential settlement. And the advance can be used for legal fees, expert costs, and for living expenses.

Nicole Noonan: And this is something that I saw, in my own practice, a real need for, where one spouse had more money than the other. And they cut up their credit cards, and try to back them into taking a settlement less than what they're entitled to.

Shawn Leamon: And so, to simplify, I mean, liquidity is money. So you're giving them the funds to get through the divorce process.

Nicole Noonan: Exactly. Yeah.

Shawn Leamon: And the objective then is to level the playing field, it sounds like.

Nicole Noonan: Right, right. So they can go out and hire the right attorneys, the right experts. We don't want someone to have, I'm going to use a generalization, their husbands go out. They're the money, the bread earners. They're going to go hire top counsel for the divorce.

Nicole Noonan: And the wife is going to have to go borrow money from friends or family and go hire someone who's fresh out of law school. And this is their first divorce case. We don't want that. We want them to have equal representation. And that's what they're entitled to.

Shawn Leamon: Yeah. So I think a lot of people, I mean, anyone who's not the primary breadwinner in the house, if there is one, probably is at a pretty significant disadvantage, at least from my experience, in terms of having the available money to go and start paying legal fees.

Shawn Leamon: I was just talking to someone yesterday. And they had some money in savings, but basically drained all of it within the first month or so of the process. How does someone know that they'll be a good candidate? How do you figure out whether they should contact you? Kind of gives me the overview, as someone should evaluate kind of this divorce funding, versus using credit cards, or borrowing from family and friends, as you mentioned. How does someone think about that?

Nicole Noonan: Yeah, no. So, we always say, people save for their wedding. You plan for the wedding, the dress, the cake, the caterers, the band. So when it comes time to divorce, no one's sitting there planning for a rainy day divorce. So if you don't have access to your own money, you're going to have to go to friends or family, potentially, or you're going to have to take out credit cards.

Nicole Noonan: Now, that being said, not everyone needs to have an attorney. Not everyone needs full-blown litigation. I always say, it's best to sit down with your spouse, if you can, open up a bottle of wine, have dinner. And say, "Hey, these are my 10 non-negotiables. What are your 10?" And hash it out as much as possible. Because you'd rather send your child to college than send your attorney's child's at college.

Nicole Noonan: But that's not always a possibility. That being said, if you're fighting over ... There's case law, very interesting things. I get it for animals. People want to fight over animals. But fighting over your baseball card collection, or your Nintendo set. Or fighting over something with no value, it's really not worth putting a fight on something like that.

Nicole Noonan: So what we say is, if there's an asset, usually it's a house, and how it's going to be divided. And if you can't work it out, or if there's a custody dispute, and you can't work it out, then you're probably going to need to retain some sort of expert, whether it's an attorney or a mediator. And at that point, it's going to be divided. The money's going to be divided.

Nicole Noonan: And that's when we come in. That's where we can say, "Hey, okay, let's figure out what you're going to be entitled to, and what we can potentially advance you." So you can go in and, unfortunately, sometimes have that fight with the attorneys, and the accountants and whatnot.

Shawn Leamon: So what stage then are people normally coming to you, or do you normally help people? Are these people who are at the beginning stages of the divorce? So still literally may be at the kitchen table, and haven't really started the process yet, in some cases. Or are they generally kind of early or midway through the process? How does someone know the timing, in terms of when to contact you?

Nicole Noonan: Yeah. Shawn, I've been doing this for 15 years, between my own practice, mediation, and for divorce funding. So I get people from all over the country at all stages of the divorce, whether they're looking to say, "Hey, I'm looking to hire an attorney in California. Who would you recommend?" Now, I don't give them one. I give them a list of people.

Nicole Noonan: And then they may come back to us and say, "Hey, you know what? I want to hire Joe something such, and I want your funding. Let's start an application." There are also the people that are on the eve of trial. And I get a call from an attorney saying, "Hey, we thought this was going to be a $10,000 case. Looks like going to cost another $30,000 to take it to trial, because no one's settling at the courthouse steps." That's when we come in. So, really, it depends on the case.

Shawn Leamon: And does someone need to have an attorney as part of this? Or if I'm going through the process representing myself, or more or less by myself, am I a candidate for funding?

Nicole Noonan: Yeah, no. You have to have an attorney. We don't represent any people that are representing themselves. Yeah.

Shawn Leamon: Okay. No, no. Fair enough. So let's say I figure out that there may be an option for me to get some funding. How does the process work?

Nicole Noonan: Try to make it as simple as possible. Because, honestly, money is stressful. Divorce is stressful. So talking about money and divorce is super stressful. So we send an application to the firm, to work with the client and the firm, of what they're looking for in terms of funding, and what the marital asset pool is. And the reason we send it to the firm is it's not their first rodeo, but it's potentially the client's first rodeo.

Nicole Noonan: Documents are sent to us. It goes to our underwriters. We try to make a decision as quickly as possible, again, because it's a stressful time. So usually within three business days, unless we're asking for more documentation. And, of course, the more complex the divorce, the longer it may take. But, traditionally, it's three business days.

Nicole Noonan: Once the client's approved, documents are sent to the client. We do ask the client to review it with an independent counsel. So it does not need to be a matrimonial attorney, cannot be the matrimonial attorney you're using, but it can be any attorney that's practicing within your state. Documents are then sent back to us. And the whole process can be done in as little as two weeks.

Nicole Noonan: Usually, the longest portion of it takes place when we're trying to find counsel to review the documents with you and get them in, especially in light of the time we're living in right now.

Shawn Leamon: And I'm going to make up a very low number, but just for the sake of example, if you were to lend me $100 ... The divorce process could be another month, or it could be another for three years. When do I have to pay that money back?

Nicole Noonan: When you settle. So we get it. Unlike a credit card, we have to worry about monthly payments. We understand. I mean, I've been doing this for a very long time. And the people I work with have been doing this for a very long time. It may take two years to sell a house right now. So you may decide, "I'm going to get 50% of the house. You're going to get 50% of the house." And we'll have to wait until you get the house sold.

Nicole Noonan: Unlike a law firm, where they're not really willing to wait. And if they are, it's also not great. And as an attorney who's done this before, where we would say, "Okay, well, we'll carry this case. And hopefully, at trial, at settlement, we'll get repaid." And it takes another two years, three years, especially during the housing crisis, for us to get repaid. So it's not great business for law firms.

Nicole Noonan: But let them do what they do best, let them represent you. And let us fund you, so you take the pressure off them and the pressure off yourself.

Shawn Leamon: And then is there an interest rate? Or is it a fee? Or how do you kind of charge someone? How do you make money, basically, is what I'm asking? How's this all work?

Nicole Noonan: No, I'd love to do this as a charity. And honestly, that's my next chapter, and my new chapter is hopefully being able to give back. Because I just think that there's such a need for this, for people who don't have a lot of assets, but that really need funding to get them to their new chapter and move on.

Nicole Noonan: But we do. We have a monthly fee. But nothing is due until you get to settlement. So they don't have to stress about that. No.

Shawn Leamon: Got it. And so when do you finally get to a settlement, or there's an order or something, the papers are signed, and as the assets are getting moved from one place to another, is when your repayment?

Nicole Noonan: Exactly.

Shawn Leamon: Got it. How does someone know if they're ... One of the common issues that comes up with a lot of my clients, is people have different levels of their credit, let's just say. Some people have done a great job, over time, maintaining that credit. Others are in between. How do you manage or navigate that process, if I'm kind of looking at my options?

Nicole Noonan: Yeah. So we do do a credit check. That being said, we get it. I mean, we get that not everyone has built up their own credit history, because their spouse was the one who did all the banking, was the main breadwinner, and was the main signee on their credit cards.

Nicole Noonan: We do have other people that have been experiencing job losses or unemployment right now, and they just can't maintain that level of credit. Again, we get it. So it's not something that is our main decision-making standard, for divorce funding.

Shawn Leamon: And you mentioned something important, is oftentimes if you need funding for your legal fees, you may also need funding just to sustain life. Does your funding include or allow for use for fees that are outside of your attorney?

Nicole Noonan: Yeah. No, absolutely. So we understand. First and foremost, we want to make sure you're able to get this divorce done. So we want to make sure that your attorney and your experts are paid. So whether that's a forensic accountant, anyone that you're going to need, an appraiser, someone who you're going to need to get your divorce settled.

Nicole Noonan: But we also fund for living expenses for clients. So we want to make sure that, based on what our assessment is, you're going to need X amount. And if there's anything left over, we'll say, "Okay, if you would like to draw down, we will fund for living expenses as well." Because some people just need to move out. And they need to get a new apartment. Or they need to have money to go back to school, so they can start their new chapter.

Nicole Noonan: Sometimes the most rewarding fundings that we do is people come back to me and say, "Hey, I went back to school. I got a degree. And I'm starting a new job. And I'm on my own two feet. And I'm never again going to let someone maintain a bank account, and know nothing about my finances." So those are really sometimes my favorite fundings that we do.

Shawn Leamon: You're based in New York. Right?

Nicole Noonan: Correct.

Shawn Leamon: Yep. I'm in Texas myself, as many of the listeners know. But we have people from all over the country. Where do you work? Can any state apply, or almost any state?

Nicole Noonan: Yep. We're all over the US. So we're both East Coast, West Coast, Midwest. We're there. And my biggest hurdle is for people to know that we're there,

Shawn Leamon: And what's the best way for someone to contact you?

Nicole Noonan: So we have a website. It's New, N-E-W, Chapter, C-H-A-P-T-E-R, Capital, C-A-P-I-T-A-L, dot com. You can also find us on LinkedIn. We also have an Instagram, @divorcefunding. We're all over. But yes, New Chapter Capital is probably the best. Or they can call us, at 212-404-7807.

Shawn Leamon: Well, Nicole, thank you very much for coming on. I think it's a great option. It's one of the biggest and most common topics that I speak with people about, is trying to figure out what options they may have, in terms of getting money to fund the legal fees. Particularly, if they have a spouse that has been manipulative or controlling, or just kind of limiting access, as you started the conversation with. So I think it's a great product and service that you offer. And thank you very much for coming onto the show.

Nicole Noonan: Thank you so much. Really had a great time.

0221: Why You Don’t Want the Most “Aggressive” Divorce Attorney Jul 26, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

One of the challenges of picking a divorce attorney is finding the right type of attorney or type of personality of an attorney to work with you and for you during the divorce process. There can be a lot of different styles of attorney. Sometimes you want an attorney that is more there towards working towards a resolution and won't run up your bill, but you also want an attorney who is going to advocate for you and fight for you.

One of the things I want to cover in this particular episode is why you want to avoid hiring the most aggressive divorce attorney. You'll see a lot of attorneys out there who claim to be the dog, the bulldog, the fighter. They're going to go all-in and advocate for you and fight for you on every issue and make sure that you're there to win. In fact, if you think about the way that divorce attorneys are represented in movies, oftentimes the attorney's going to be that pit bull aggressive, sports car driving, fancy suit, 35th floor in a downtown office. An attorney that is there to be aggressive and fight.

But I want to give some considerations when it comes to choosing an attorney as to why that might not be the ideal in terms of picking the most aggressive person. And there are four big topics I want to cover in terms of an aggressive attorney. The first is that going to court is expensive. Second is aggressive does not equal respect in the legal community. The third is aggressive doesn't mean effective. And finally, fourth is that an aggressive attorney can be emotionally draining.

So, I'm going to go through these four points. And just keep in mind when you're thinking about your attorney selection, you're thinking about the divorce process, you're thinking about how these processes go, is ultimately you're going to need to get to a resolution. Most people listening want to get to some form of a settlement, and it requires some negotiating ability.

Now, everything being lopsided, it doesn't mean you cave in and give in to the other side, but you want someone who is there to advocate for you, but help you get to a resolution, not just fight for fighting sake. And so, the first point in this is going to court is expensive. If you get an aggressive attorney, you will constantly be fighting absolutely every issue, there'll be a motion for every issue, you'll have lots and lots of legal work that's done. And anything that your spouse or soon to be ex-spouse brings up, whether it's valid or not, is going to be challenged, even when it's not justified to be challenged. And sometimes it is going to ultimately hurt you, not harm you.

And so, when you have overly aggressive attorneys, oftentimes you don't get to a point where there's a resolution and you end up going to trial or having many, many court dates. And the process takes twice as long and is five times more expensive because you're fighting every issue.

The second point is aggressive attorneys aren't always respected both by judges and the legal community. And remember, when I use the word aggressive, I do mean the person who fights for fighting sake. If you know that someone's always going to fight every particular issue, whether it's big or tiny and irrelevant in the overall process of things, that person starts to lose their credibility.

I mean, imagine, and I use an example that's actually a true example, but let's just say you have $300 worth of dishes at home. You know, you have your plates and your bowls and your cups and whatever else, but seven motions later and 14 hours of legal work later, you have now spent $5,000 or more on trying to get those cups and plates going to your house and not your ex-spouse. And that's kind of the thing, where you would have been better off just letting this issue be rather than fighting over every detail attached to it.

And so, when you're fighting over every little issue, there comes a point where people don't value what you say, because everything is an emergency, everything is a big deal. And then the issues that really are big deals get lost in the overall shuffle because you don't have that credibility to say when there are actual emergencies, there are actual issues because everything is.

The third point is that aggressive doesn't necessarily mean assertive or effective. Now, you want, and one of the most common things that almost everyone wants, and I hear all the time, is you want your attorney to fight for you. That is a fair point and a fair statement. You want to feel like your attorney is on your side, advocating on your behalf, standing up for you through the legal system to make sure that what's going on in this divorce process is right and just. And if there's something incorrect that's going on, that that person is going to advocate and make sure that you walk out with a good settlement or the best that's possible given the circumstances.

Now that said, there are ways to do that without causing unnecessary fights on every issue. And the way I make that distinction is there's a difference between being aggressive and being assertive. And so, there are some people who... Many attorneys I like, some of the ones that I recommend to people when appropriate is they are very assertive, they're always in your corner, and they will always advocate on your behalf, but they aren't overly aggressive on how they do it. They treat themselves as being right.

And so, because they know the law well, they know how to negotiate skillfully, they don't have to yell or cause an unnecessary burden. They can speak in a tone like this, they can write factual statements, they can use the law to their advantage in order to help you versus making every issue an explosion or a blow-up.

And then the last point is that an aggressive attorney is just emotionally draining. I've been on the receiving end of and also seen clients who are on the receiving end of overly aggressive attorneys. And what they say and what they receive and what they communicate is just always something. Whether you said something the right way, or you incorrectly typed something, or whatever the case may be, that the receiving end that they're going to say, they make every issue a five-alarm fire when it may just not even be smoke coming out of the kitchen. They pretend like the whole house is burnt down and we got to rebuild it. And it just becomes overly complicated when it doesn't need to be.

In a perfect world, and there isn't a perfect world in divorce oftentimes, this is divorce that we're talking about, but if there were a perfect world in divorce, you would have two reasonable people, two reasonable attorneys, that say, "Hey, our sole objective is to get to a fair settlement so that everyone can move on with their lives at a reasonable cost and in a reasonable timeframe. That's the goal." And when you have someone who's fighting every issue, either on your behalf or if unfortunately, your spouse picks that aggressive attorney, everything just is a constant fight and it's a battle and it's draining and it isn't productive.

And so, you want to make sure that the attorney that you pick, when you're looking for an attorney, knows how to pick his or her battles on your behalf. So some things are worth fighting, other things are not, and a wise attorney will guide you in the right direction.

And so, in the overall big picture, one of my favorite phrases that I've said on the podcast before is you can't see the forest for the trees. Meaning you look at every individual tree but you can't realize that you're in this big forest and you don't necessarily know what the big picture looks like. Well, that's what it is like working with an overly aggressive attorney as you're fighting and looking at every individual tree, but sometimes you just miss the whole big picture as to why you're here, what your objectives are, and what's the best way to get out of this, all things considered. Picking an overly aggressive attorney can really harm you in that regard.

That's it for this episode. I'm going to continue the series on attorneys because it's one of the most important things that you can do as part of the divorce process.

0220: Do You Need A Divorce Attorney? Jun 19, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

In this episode and the next several episodes, I want to discuss divorce attorneys, and family law attorneys, and the details and choices amongst them. And how you can figure out whether or not you have a good attorney, how to find a good attorney to make sure your attorney is fighting for and advocating for you and the complexities of the attorney selection and just relationship management process. I'm a huge fan of divorce attorneys and having them help represent you, but like in all industries, there are people who are really good at their job and some people who, let's just say, politely, may need some improvement. And attorneys are no different. There are some excellent family law attorneys out there who will do a good job for you at a reasonable price. And there are some attorneys out there who will cause a mess of things, and you end up spending tens of thousands of dollars or more. And on top of that, not getting anything done. And I want you to avoid that scenario.

But in this particular episode, I want to focus on, do you need an attorney? And what situations that might exist where you don't need an attorney to help you. And let's just start with the basics. Do you need one? Well, your attorney is going to have, if you work with one, is probably going to have one of the biggest impacts in terms of how this divorce process goes for you. And same is the selection of the attorney of your spouse. A good attorney or good set of attorneys, will keep things moving forward at a reasonable clip people will, of course, have disagreements, this is divorce, but they'll do them civilly and you won't end up spending more money and time and energy than you have to. And if you get a bad attorney, this process is going to be an additional nightmare on top of nightmares. Not only will you lose a lot in your divorce, and when I say lose a lot, I mean, money, time, energy, but the outcome will likely be pretty poor as well.

And so, you need to be very careful about who you choose as an attorney. And so, it's one of the most important things that you can do when it comes to the divorce process. But some people ask me, I get this question all the time is, "Do I need an attorney or can I do it myself?" And I know a lot of people are hesitant to fork over thousands or tens of thousands of dollars to an attorney to help with their issues. And sometimes, I get people who'll say, "Well, my issues are pretty simple. I think I can handle most of this." And a lot of times I'll talk to you and say, "Yeah, you have a pretty good handle on things, but you should still consult an attorney or at least consider it." And there are other times where people don't really need that much legal help because they and their spouse agree on most of the issues.

And so, can they do it themselves? A few things I tell people when it comes to whether or not they need an attorney. The first thing, of course, is that divorce is complicated. There are a lot of details in order to come up with a divorce settlement, a divorce agreement, or ultimately if you are one of the handful of people who has to go to trial. I mean, there's a lot of details involved even in the simplest of situations. And you need to be prepared to have a handle on that and understand all of those complexities. The second thing is, it's very, very easy to make mistakes in the divorce process. The mistakes that people think of, which are, are they getting the right financial deal for them? Did they structure a custody agreement the right way? Are they doing what's within the bounds of the law when they come up with an agreement? Those are common things.

But there are also issues where did you fill out that divorce paperwork the right way? And is the clerk going to reject it? And you have to reject it after 60 days of it sitting there in the office and say, Oh, you didn't fill this out correctly, and therefore you got to redo it and resubmit everything. And there's a lot of just little details that add up when it comes to the divorce process. The third thing is almost obvious, but it can be really hard to see the big picture when you are going through divorce. You're in it. You are in the middle of this situation. This is happening to you, your life, your family, and everything that related to it. And sometimes it's very hard to de-personalize and just make smart decisions. It's very, very tough to make the best decisions for yourself oftentimes in an emotional process when you're going through the middle of it.

And so, having someone like an attorney can provide you guidance from the outside to help you and keep you on the right path and make the right decisions. And then the last point I'm going to bring up is, regret is powerful. I'm going to bring up two more points. One is, regret is powerful. So this is point number four. What you don't want to happen, and one of the most challenging things after this process is over, is looking back and saying, I wish I did X, Y, or Z. And it's something that's very, very common. Because life is complicated. Divorce is complicated. We all get that. And you want to make sure that you're covering your basis for everything that could happen later down the line and just during the process. So you don't have these regrets six months later, a year later, five years later, when you're looking back as to how you handled certain things in this process.

And one of the things, I'm shifting gears slightly as I make this next comment, but one of the things I talk about in my document review appointments all the time is, making sure the what-ifs are covered. And when I think of some of the best attorneys that I know, I mean, there's a lot of factors that make great attorneys, but one of the defining characteristics is they're really, really good at understanding the what-ifs. So, what if you can't sell a house in the agreed timeframe? What if someone doesn't agree or doesn't follow through on this child support agreement? What if the custody schedule needs changing? What if someone gets sick, or a child gets sick, how is that handled? What if there's an issue with the split of the retirement account? And really good attorneys can anticipate, and plan for, and write in documentation, and help you negotiate, what if, scenarios that are very favorable for you and make the longterm process of this divorce smoother.

And then the last point I'm going to bring up, is that you need to protect yourself. There's just a lot of details, as I've said before, in terms of divorce process, and you don't always know where you might be going wrong, where you could get a better deal, or where it's okay to give up a little bit, this is a negotiation. And you want to make sure that the agreement you are coming to is a fair agreement for all parties. It's not about "screwing your spouse." That's not the goal here. The goal is to come up with a solution that both of you can live with for the rest of your lives. It's not going to be fun. It's not necessarily going to be perfect. But the goal is to get to that point and get to that point sooner over later at a reasonable cost. And a good divorce attorney can help you do that.

So, that was all-pro attorney, of course. And I'm going to be getting into lots of different details to think about when it comes to an attorney. But what situations might you not need an attorney, or need very little legal help? And I have just three scenarios. And even in all three scenarios, if I were writing this down, I'd put a little asterisk next to it, to say, yes, but still, you might want to contact an attorney. But three things to consider, the first is that, if both of you have a very clear picture, both of you as spouses understand your assets and your debts. You have a clear understanding of where the money goes, what's there, you agree upon all the values of things, and there's not going to be a lot of disputes about it, but if you know it, that's a good checkmark that you might not need as much legal help.

The second thing is that you and your spouse don't have complex custody issues. If you have any kind of custody issue or it's going to be a discussion or a potential conflict later, get an attorney to work it out for you. Because there are just so many details. I mean, I'm a financial specialist, by no means am I a custody specialist, but from working with enough attorneys and reading enough agreements, I can tell you there are so many details that attorneys know and have worked through over decades, in terms of getting the right custody schedules, and handling all the complexities of raising kids and co-parenting, that they already have planned that oftentimes someone who's just trying to do it themselves doesn't know. But if you don't have custody issues or the kids have grown, maybe you don't need as much legal help.

And then the last point is, if you and your spouse can work out a reasonable settlement, then, by all means, save the money. I said, for all of those points is there's an asterisk. I'm going to get into some options in future episodes as to different ways you can use attorneys without going all in and necessarily writing a 10, 25,000, $50,000 check for each of you to get the appropriate legal help that you need. But one of the things is, is the more that you can agree upon yourself, between you and your spouse, and the less fighting there is, the less help you'll need from an attorney. And so, that's something to think about as you choose. Now, the nature of this podcast and the nature of what I do, unfortunately, I don't get to work with too many people who are in ideal scenarios.

It happens every week, but the vast majority of people are in very complex financial circumstances and are not in full agreement with their spouse, which is why they're listening to this podcast or you contact me and we do a coaching call. But when you can, particularly for the people who are early in the process or haven't filed yet, I always say like, "Look, if you can work out a lot of this stuff in advance, you can minimize the need for attorneys down the line and the cost you're going to have to pay as it goes through this divorce process." So, a lot of things to consider in just a short amount of time. I also have a great section, not to over-promote my book, but in my book, Divorce and Your Money: How to Avoid Costly Divorce Mistakes, there is a ton of information on how to choose an attorney in there, because it's one of the most important things that you can do during your divorce process. And I will be talking about a lot more in future episodes.

0219: How to Conserve Cash & Save Money During The Pandemic May 23, 2020

EP 0219: How to Conserve Cash & Save Money During The Pandemic

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

In this episode, I want to discuss preparing your finances during a recession and how to conserve as much cash and capital you can during this time period. It's not purely a divorce topic, but it has some general financial discussions in here. And there's some things I want you to think about. As I'm recording this, there's something like almost 30 million American adults out of work. The unemployment rate is high. A lot of states have been locked down, and some are slowly starting to reopen, but the economy has fundamentally changed. And just a few months ago, at the beginning of 2020, there was a great economy, and then that changed in the span of about a week or two. And a lot of people have lost jobs or are on unemployment or some combination of those.

And when you're on a budget, regardless of your lifestyle and your income, oftentimes a big decrease like what has happened recently can completely change your lifestyle, your budgeting, your plans, and it can be hard at a certain point if you've exhausted your savings or are getting close to it to figure out ways to conserve some additional money and give yourself added financial flexibility as you try and keep up with the relevant payments that you may have.

And so I want to go through a few different strategies, five specific strategies to consider when it comes to this environment and some ways to improve your financial picture, particularly if your income is down, but your expenses have remained the same or your expenses have even increased given everything that's going on. And so I'm going to go through five things and I'm just going to start them now.

The first is to check and understand your spending. You should have a very good handle on your expenses. If you haven't completed a financial affidavit or statement of net worth, oftentimes they ask you for your monthly expenses. One of the things you should be doing is really understanding what those expenses are, how they look, what can be cut from your expenses. I look at every transaction every month and I go through and I say, "Hey, do all these transactions look good? Where do I spend too much? Could I cut something here or there to make sure that I'm not spending too much?"

And when your budget is tight, you have to realize that even small things add up. I'll use a very simple example, is if you pay $10 a month for Netflix ... I don't know the exact Netflix price at the moment, but let's just say you pay $10 a month for Netflix, and that's $120 a year over five years, that is $600 of spending on Netflix. I always look at those small subscriptions as a five year commitment, and you can realize that $10 a month can add up pretty quickly, much less if you have an expense that's $50 a month or $120 a month or more. And so you need to really think about those expenses and what you may be able to cut.

The second thing is if you have debt of any kind, be it a credit card, student loan, personal loan, mortgage, whatever, you can negotiate with your lenders. Under normal economic environment times, people were not as willing to defer or adjust your payment schedule, but now given the millions of people in very tough situations, and you may be one of them, there are ways to lower your payments in the short-term so that you have some flexibility and in the long-term, you're going to make up for it. But doing and cutting what you can in the short-term can be helpful.

When it comes to a student loan or a credit card or personal loan, you can pay ... Sometimes they'll let you just pay the interest. Maybe you can't pay the principal balance, so if you have ... I'm just going to make up a student loan, for example. Well, let's say you pay $1,000 a month on a student loan. Well, 500 of the $1,000 might be going to interest, and 500 of that $1,000 may be going to the principal balance of that loan. And if you don't have the same amount of income coming in, you can say, "Hey, can I maybe just pay interest only for the next six months, the next 12 months until I can get back on my feet?"

And most lenders are very willing to do that for you because I mean, they want a payment and they don't want you to stop. And it's better for them if you pay some over paying nothing and it's okay ... They'll be happy if you carry a balance for six months, so long as month seven or even month 12, whatever it is, you start paying that as normal again, but if you just stop payments altogether, that actually hurts them quite a bit as well. So people are willing to negotiate and adjust the payment schedules today, so whatever kind of debt you may have all the way to a mortgage or a credit card or anything in between, call the institutions, tell them the situation, and most aren't even requiring a whole ton of proof in the short-term just because the mass volume of people who are affected right now.

Now, a caveat to that is don't just stop paying. You should contact the lenders and tell them what's going on, but if you stop paying, it can hurt you. Now, the only plus side ... I would stop paying is a last resort. The only upside is if you stop paying, it does take a few months before those missed payments show up on your credit report, but it's not suggested. Much better to modify and find a lender or find someone who's willing to work with you than just stop paying because you don't have the capital available.

The third tip is to pause retirement contributions. If you are still working and you have a job, or I know plenty of people who still have jobs, but I have lots of friends and people I know who got salary cuts to keep their job. Some took 30%, 25% salary cuts. I know other people who are on unemployment at the moment, but whatever it is, consider pausing those retirement contributions. If you're contributing 3% or 5% of your salary to retirement, whatever the number is, well, I would lower that to nothing and conserve as much capital as you can in the short-term so you can get through this difficult period.

And conversely is point number four is pause college savings. If you're saving for your kids' colleges, you might want to pause that and keep that cash as well. And when you're in a better financial position, you can start making those contributions again. I imagine just as a general note is particularly for kids who aren't going to college in the next few years, there's going to be some adjustments given the whole virus situation and some hard questions in terms of the cost of college, the value of college and what you're paying for. And so if you're planning to spend 200 or $300,000 on a kid's education, you might need to save or hold off. These are short-term bumps in the road, or at least try and think of them as that, and you can catch back up when you are on your feet, but you shouldn't overstretch in the short-term.

And then finally is consider negotiating or consolidating debt. One of the things I do all the time whenever looking at someone's debt is I like to rank debt by interest rate. Let's say your mortgage is somewhere between 3 and 5%. Well, that's not a very high interest rate, but you could have a credit card that's charging you 21%, or if you're behind, it could be 27% and you can have everything in between. And what you should do is be very organized or very careful about how much you're paying and know how much you're paying an interest for pieces of debt and figure out if there's ways to lower that.

I was just having a conversation with someone the other day and I got an offer in the mail, said, "You are preapproved by Discover," because I use Discover for some of my daily expenses and they said, "You're preapproved for a personal loan at 6.99% and we can get you up to" ... It was a really high amount. And they were like, "We can get you up to $36,000 if you apply within 24 hours." And I was like, "Wow, that's a lot of money." Thankfully, I don't need it to pay anything off, but there are situations where something like that could be helpful.

If you have a credit card and your credit card payment is charging you 18, 19, 20%, and let's say you have $10,000 in credit card debt, you could be paying $2,000 in interest a year. But if you refinance with a personal loan at 7%, well, you would be saving yourself 1,300 bucks in interest on that $10,000. I keep a document actually that I update for myself every month that has each credit card, how much the interest rates are and just making sure I pay off my balances, but if there was a situation where I had a bunch of debt, I would know, "Okay, well, this is the most expensive debt, so I need to pay that off first. This is the cheapest debt, so like a mortgage and I'm only paying 4% and there's some tax benefits, so I'm going to leave that one outstanding and not try and pay that one off." And so organizing your debt and negotiating, figuring out if you should consolidate certain debt, you can quote unquote "refinance debt" by getting a lower interest loan to pay off some high interest debt. These are all considerations, particularly during difficult times.

The five tips to help you conserve some capital are to first just check and understand your spending. That's one of the biggest tips I give everyone going through the divorce process in general, but with the economic situation changing on top of it, understanding your spending and cutting your spending for anything that's unnecessary is the top tip.

The second is negotiate with lenders. Be it a credit card, a student loan, a mortgage, whatever it is, if you can't make the payments or you need to reduce the payments in the short-term, people are willing to work with you. I guarantee it.

The third is pause your retirement contributions in the short-term, and the fourth is pause your college savings contributions if you're making them for a kid. And then finally, the last is consolidate your debt or renegotiate your debt and ... excuse me ... refinance your debt if you have to. And so if you have high interest debt like credit card debt and you get a personal loan at a lower interest rate, it can save you hundreds, if not thousands of dollars over the course of a year or several years just by refinancing certain pieces of debt. And that might be something for you to think about and work on.

0218: A Simple Breathing Techniques to Manage Stress May 01, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

This week, I want to cover a slightly different type of episode. How can you manage stress the instant you are experiencing it?

Oftentimes life can feel overwhelming, and finding ways to manage all of those feelings without shutting down is essential to our well-being.

Here’s a technique that I find helpful and in fact, use frequently to manage stress – it’s very simple.

It’s a deep breathing technique where you count to 10. What do I mean by that? Listen to this latest podcast for more on this guaranteed technique to help you ease stress the minute you feel it.

0217: Divorce, Custody & Support Tips during COVID-19 Mar 31, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

In this episode, I want to do a more timely addition of the Divorce and Your Money episode. As you know, clearly if you're listening to this that there is a big virus going around and businesses are closed. Courts are closed to most extent. And a lot has changed in the span of just a few weeks. And depending upon where you are, the severity has changed quite a bit. But, many life-altering changes, and I wanted to discuss its impact on the divorce process and some things that you may want to consider during the coronavirus epidemic, or pandemic I should say. There are some helpful tips in here and just a hodgepodge of ideas I wanted to go through and some frequently asked questions and thoughts as you consider everything that's going on.

There's a few big things that have happened all at the same time. First, of course, is the virus. The second is the employment situation has changed. As I record this, over 3 million people have reported that they have filed for unemployment, and that number will go up, I'm sure, over the coming weeks. Also, the stock market is down quite a bit, and a lot of people are in much tougher situations than they found themselves just a month ago when ... Well, you still have the divorce part, but at least the economy was good, market was up, and everything else. So I want to give you some things to consider and things that you can do.

The first thing is that across the country and just about every attorney I've talked to in every state I've talked to, court's closed. Now, they're not closed, closed for absolutely everything because the legal system is very important. But for anything that's not essential, the court is likely closed. So what does that mean for you? Well, it means for many things you cannot go get them resolved. So if you have a session in front of a judge that's not immediately urgent or an emergency, it will likely be delayed for several months. And unfortunately, because there are hundreds, if not thousands, of delays happening at the same time, things are going to take a lot longer once we start to reestablish some form of normalcy.

Now, if you have an emergency order for some reason, and you will have to have an attorney to help you with this, at least I recommend one, emergency orders, almost universally, are still going through in courts across the country. But it has to be a true emergency for a court to want to hear it and for you to get a resolution on that particular issue that may be occurring, so there's something to that point.

Now, if you want to resolve your situation, your divorce case, and court is not available at the moment, what are your options? Well, if you are in a position to mediate or negotiate a settlement, every attorney I know is still working. These are all small businesses for the most part. Most family law firms are small businesses. They still are working the same way they would. Now, of course everyone is remote. I've always been remote. So for better, for worse, this hasn't changed a drop of my day-to-day life. But attorneys are working remote, and so you can still work towards negotiating a settlement as if nothing mattered. Now, will you be able to file the final paperwork? Probably not. Or at least it may get delayed until you get the final sign-off, but everything is still possible to make progress in terms of a divorce case or issues you are facing.

Now, if you have to have a court date for something and that would be essential to your process, that's not going to happen anytime soon. But at least in terms of making progress, if you're willing to do that, and your spouse is willing to do that, and the attorneys are willing to do that, you can still resolve. I still have plenty of people that I know that I'm working with who are making progress like they would normally, even though the court itself is closed, and that is an option available to you.

Another thing that's available to you is that if you wanted to do mediation. Now, the traditional mediation when you are in a courtroom is ... Or sorry, a conference room I should say, is not happening, where you get you, your attorney, your spouse, your spouse's attorney, and a neutral mediator in a courtroom is not happening. However, believe it or not, just a few weeks ago, I had done some episodes on virtual mediation services. So it was actually one of the most recent episodes that came out and with Susan Guthrie. She's a virtual mediator. And there are lots of virtual mediation options that are popping up over the last few weeks given the change in circumstances and situations. So if you're in the mediation process, well, a lot of times that's happening via video conference now where it would've happened in person before. So long as everyone agrees to it and agrees to move forward that way, that is possible.

Now, where are people having a lot of extra complications in this process? Well, something that's just obvious is a lot of people are now stuck at home all day with their spouses. That may be you. And that can present a host of issues. It was one thing when you might see your spouse for an hour in the evening and you could get along relatively civilly for that hour in the evening, but now you are together 24/7, 365, or at least that's what it feels like. And whatever was going on is being accelerated, good and bad. But whatever was happening could be worse.

So just my tip during that is, I know everyone's situation is different, but to the extent that you can be civil, or have your own space, or be flexible, please try and do that. Not accelerate things. I've heard an increasing number ... And I don't have data on this point, but I've heard an increasing number of domestic violence issues, of child abuse issues, of lots of additional stressors just given everything going on, and I don't want that to happen to you. So if you have any hope of compassion left to deal with your spouse even though you're in the process of divorce, try and make that work, particularly when you are forced under the same roof.

Another consideration is that custody is a very complicated issue at the moment. A lot of you may be living under different roofs from your spouse and they're going through this process and you've been figuring out different custody arrangements and parenting schedules. Well, if you had a temporary schedule in place or you'd been working on something in an informal basis, I would say try and be a little bit more flexible with what's going on.

Now, there's some weird issues coming up as it comes to custody and parenting time. School is out, or school is being done virtually, or some hybrid of that that may be causing some issues depending upon who is the parent, what resources they have, what set up they have, and that may be causing some issues. So you need to be documenting these issues. I would say first, figure out if you can work them out between the two of you somewhat civilly before getting attorneys involved because it may not happen in the pace that you want it to happen.

The other thing that is happening is sometimes one parent is being more diligent about health mandates than the other parent. So I've heard stories already of where one parent is bringing a bunch of people over to the house with the kid present when they're supposed to be staying at home or avoiding gatherings, etc. And because of that, you might be worried about your kid's health and safety and increasing their increasing probability of catching the virus, or having complications from it, or just being around people who might be spreading the transmission of the virus. Well, that's something that you should not only document, but that is a good time to contact an attorney immediately to see what potential options are.

The smart attorneys that I know that I work closely with, they are already thinking about potential options for this scenario and helping clients. I know some attorneys haven't thought about it one drop. But if you get a good attorney, and I'll be doing some episodes on attorneys in the near future, a good attorney will certainly be able to help you navigate and come up with some creative options during this time when it comes to custody, handoffs, parenting time, etc, given that we are in an unprecedented scenario at the moment.

Another area I want to cover is support, child support, spousal support. Things could be changing for you. Just a month ago when I recorded this or when we were recording episodes, and if you're just thinking about life a month ago at the end of February, we had the lowest unemployment rate ever. And a month later passes and we now have the highest unemployment number, at least people out of a job, ever recorded by a big magnitude all in the span of about 30 or 45 days. What that means is that you or your spouse could very well be in a scenario where income-based support, it could be child support, could be spousal support, could be temporary, could be whatever, all of a sudden that is no longer financially feasible for you.

Now, there's a lot of things going on government-wise, economy-wise, just a lot of different moving parts. And so the question is, what happens with those orders that may no longer be based on financial realities? Well, there's a lot of things to think of. Also, some people were negotiating. I've talked to several people in the last week or two who were in the process of negotiating settlements and those settlements, all of a sudden, we had to change the strategy due to what was on the table and all of a sudden potentials for job losses or people who were out of the workforce, etc. That all of a sudden changed our strategy from a financial perspective in terms of what the best options were.

Here's the point, is that if you have an existing order, you should continue the status quo of that order. So if you're receiving payments, you should hopefully continue receiving that same amount that has been agreed to. If you're the one making payments, you should continue to make those payments that have been agreed to for the foreseeable future, assuming that they agreed to by the court in some form or fashion. If your job is the same, too ... I know some people who haven't been affected yet by the job issue. If your job's the same, your salary's the same, definitely don't do anything. But if you are in a position where someone's lost a job or on reduced hours, at least for the short term that plan should be to keep going under the current amount.

Now, there are things that you can do, particularly if you're the payer of support, is you can file to have that support reduced, especially given a job loss or unemployment for reduction in hours. And that has to go through the court process so it may take a few months, in which case the default recommendation is to keep things going for a few months. Then when that process works itself out, then you would pay the reduced amount. And if you're the person receiving support, I would also assume that the person who's the payer, be it spousal or child support, is going to be asking or looking for reduction in the near future and so you need to plan accordingly.

But I would say this, I would be very cautious. Now, I know some people are in a situation where they have to conserve every dollar that they can, otherwise they're not going to be able to make the mortgage payment, or the rent payment, or eat over the coming months. And if that's what you have to do, that's what you have to do. But to the extent that you can continue to make some form of spousal support or child support payment, particularly in the short term, you should do that, especially if it is ordered. But, everyone needs to be aware that things will likely be changing and people will have less in terms of money in the near future.

The other thing to remember is this is an unprecedented situation. It just is. I was talking to someone who was getting ... Well, everyone I talked to just about is going through the divorce process, and we were talking about what should you really be focused on during this process. And I said, "Hey, look, there's a lot that's going to be happening over the coming weeks and months. We don't know how it's going to play out. The economy's down. A lot of things are down. But remember this, is basically all of finances, even in a new reality, are you need to have your income be more than your expenses. Simple as that. Your income more your expenses, and then you need to have money saved for a rainy day." Well, now is definitely a rainy day.

I talk to lots of people in the past. And if you've listened to this podcast, I always say try and hold on to your cash. I'm very much biased, even in the best of times, that you need to hold onto your cash and stay as liquid as you can whenever you have that option because you never know when a rainy day is coming. And unfortunately right now is that rainy day.

So what you need to be thinking about is your lifestyle. You might need to be making adjustments in terms of what's relevant, what's not, and conserve every dollar you can. I would avoid paying down debt at the moment. I would hold on to your cash. You can refinance debt, but hold on to as much cash as you can in the immediate term because we don't know how bad things are going to get.

It depends on where you are in the country. I travel a lot so I get to ... so I know people all over and I'm checking in. All over the world as well. I mean, I have friends in over 80 countries, and it's a different issue depending upon where you are in the country and in the world. And if you're in the East Coast, or West Coast, or middle of the country, it doesn't really matter. Things are happening at different rates and different paces. The point is you need to be prepared for everything that is happening and even if you have to start making some immediate cuts. You should be doing those and thinking about what is going on in the near future.

But, there's a lot of things that are happening. I'll keep you updated as I have new information and I hear information from attorneys. I know some good attorneys who are putting out some information, particularly in regards to custody because that's the biggest thing that's happening right now. But, we don't know what the extent of things is going to be. We do know the world is moving online very rapidly and trying to keep up with as much as we can given the changing circumstances, but prepare for this to go on for several months.

And things are going to be delayed. It's going to take a long time to catch back up when the time comes, and so you need to be making those financial moves and preparations now so that you're not caught flat-footed later when some of these scenarios that we might have been thinking about hypothetically are actually here and are real and could cause some very substantial stress in your life.

0216: Divorce Mediation: Interview with Susan Guthrie, Family Law Attorney, Mediator, and Host of Divorce & Beyond Podcast Mar 01, 2020

In this episode, we have an interview with Susan Guthrie - Family Law Attorney, Mediator, and Host of Divorce & Beyond Podcast. Learn more about Susan here: https://divorceinabetterway.com/. Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

Shawn:

In the beginning of the process, as you're doing your research, one of the most important things you can do is figure out what are your options and what are the best ways to proceed during the divorce process. And know that the traditional method of divorce litigation is not the only method that exists when it comes to the divorce process, and you may have options. There's mediation, there's collaborative divorce. But in this particular episode, I want to discuss mediation, and to do that, I'm bringing in a great guest.

Shawn:

Her name is Susan Guthrie. She is a family law attorney with over 30 years of experience. And she's going to give us an overview of some of the key things about mediation to think about. She'll describe the process really well in this episode. And the other thing that's interesting about mediation is that there's the possibility for online mediation. And so, there may be some advantages to that as well. So, I hope you enjoy the interview with Susan Guthrie and also be sure to check out her podcast. She has a really good podcast that's called Divorce and Beyond. So, without further ado, here's my interview with Susan.

Shawn:

Today on the show I have with me Susan Guthrie. Susan is a family law attorney, mediator, and a podcast host of her own. Susan, welcome to the show.

Susan:

Thank you, Shawn. I'm so pleased to be here. Thank you for having me.

Shawn:

Susan, let's start with ... actually, I just want to start with the podcast so other people can listen to it. It's great. I recently did an interview on it. Why don't you tell us about your podcast?

Susan:

Thank you. Yes, and by the way, your episode is doing very, very well. People are always interested in Divorce and Their Money, it's called, my podcast is, Divorce and Beyond. It's really focused on, I've been a divorce attorney and a mediator for 30 years, so I bring that insider knowledge to the divorce process, and bring experts on to help with that, such as yourself. But I also am very much focused on the beyond, because divorce is really a finite time in your life or I certainly hope that it is, and you have a future ahead. So, many of our episodes are focused on preparing for the beyond, preparing for your future.

Shawn:

Great, and I encourage everyone to listen to it. There's lots of great episodes on there and you bring a great collection of interview guests on there as well. That's really interesting.

Susan:

Oh, thank you.

Shawn:

So, why don't you tell us a little bit about your background. I know you said you practiced for 30 years, but why don't you give us your credentials so to speak? So, we all understand who we're listening to.

Susan:

I have practiced as a family law attorney and still do to some degree for 30 years. My original State of practice was Connecticut, and I was located there in Fairfield County for 25 years or so, with a pretty traditional law practice. Then, branched out on my own and started moving around the country. I moved to California first, so I'm also licensed to practice law there. But I also segued my practice over to mediation, and in fact, that's all from a divorce perspective that I do in the process of helping couples negotiate and settle their divorce issues. I now live in Chicago.

Susan:

My practice is now entirely online, and I help people both through online divorce mediation services as well as legal coaching services around the world because I can do it online. I feel very lucky that I have been a divorce attorney and operating at a fairly high level. I dealt with a lot of high conflict and high net worth cases during my litigation practice. So, as you mentioned, I have access to a large number of really excellent experts because I've worked with them over the years in my practice, and I love bringing that wealth of knowledge and really that insider side of things to my listeners.

Shawn:

Yeah, I think that's great. You worked with a lot of high conflict people and now you do a lot of mediation work. Why did you make that shift?

Susan:

Yeah. So, it was sort of two fold. But really what it boiled down to, and for anyone who's seen the movie that's out right now, Marriage Story, you will understand I think what I'm talking about. But I got involved in divorce litigation when I first got out of law school, because frankly 30 years ago, that's really all that was out there. The litigation process is very adversarial. It is set up on a party A versus party B platform like any other lawsuit. Unfortunately, when you're talking about restructuring families, that is not a very good model for success.

Susan:

Unfortunately, that process actually drives people further apart, and then, when they find themselves post-divorce needing to co-parent or communicate, the animosity and the adversity that was brought up during the divorce and exacerbated during the litigation process really only makes it worse. It sets up an ongoing conflict cycle. So, mediation is an opportunity for parties to sit down, couples to sit down, and work together in a more cooperative fashion to communicate and restructure their family in a way that works best for all of them.

Susan:

It's not based on that win lose model, and so now having worked in both formats, the reason I only do mediation at this point is because the results for clients are so much better.

Shawn:

Let's start by defining what is mediation versus litigation. Can you just give us an overview of what that means, what that process looks like, how it differs?

Susan:

Sure, and actually that's a great place to start because there is a great deal of misunderstanding at times for people when it comes to mediation. I always hear it called the kinder, gentler way to divorce, or the kumbaya method of divorce. I will tell you, divorce mediation, like any process that you would go through to negotiate or resolve the issues of a divorce, it takes effort. It has its moments where it's not an easy process, but divorce mediation is based upon a principle of the two parties sitting down with a neutral professional, that could be an attorney like myself. It could be a financial professional.

Susan:

I know a lot of professionals who are financial advisors, who also are mediators, or therapists, or other professionals, but they sit down with a trained professional who's there to help them identify the issues that they need to resolve in the divorce, to give them an understanding of the law, and context, and nuance around those issues. Then, really importantly, to support both of them in having the difficult conversations that need to be had on how those issues are going to be resolved, with an eye to identifying what works best for all of them. Again, we're always in mediation looking for the third solution.

Susan:

We're not looking for the win for one side and a loss for the other. We're looking for that third solution that allows everyone to get as much of what they want on a needs base or interest based perspective, so that everyone walks away with a decision and with agreements that incorporate as much as possible what they've chosen that they can and cannot live with.

Shawn:

Let's give a concrete example of that, and I'm just thinking of, I want to just use a very simple case. Let's just say we have a house, a couple of retirement accounts, a couple of cars. How would I know when to use mediation and what would that look like for me versus going the traditional route and what would that mediation process look like start to finish?

Susan:

The two processes, they look similar because any method that you're going to use to resolve your divorce is going to sort of go through the same stages. You're going to have the quantifying or the pulling together of information stage. In litigation, we call that discovery. In mediation, we call it information gathering phase, but then you're going to discuss the issues. Then, you're going to come to agreement on the issues in 95% of the cases. So, the difference with mediation is, in litigation everything is done on a compulsory manner and fashion. Motions are filed, requests for orders are made, requests for production are made.

Susan:

Everything has time limits, and rules, and things are done because you are under court orders to do them. The difference is, in mediation, everything is done by agreement, including the fact that the parties are in mediation at all. Mediation is 100% voluntary as opposed to litigation, which people can be dragged kicking and screaming into, or if they ignore it, it's going to happen without them. So, the mediation process itself, just as a litigation case would start, does start with the information gathering. But it's not done in that fashion where you exchange compulsory requests for information.

Susan:

We sit down with your mediator, with the two clients, and compile all of the necessary information by agreement that we're going to do that as a part of the transparency of the process. That has a lot of different effects. The biggest one being it takes much less time to pull together all the information because we are talking about what everyone needs to see, wants to see, and agreeing to pull it together. It's also much less expensive because the parties are not utilizing legal counsel, filing of motions, all of which that they pay their attorneys for.

Susan:

It's usually much more successful, because nobody will drag their feet usually in the same fashion because, again, they've agreed that they're coming to the table to work through the process. So, in many ways, I've seen litigation cases where we have literally spent years, you mentioned a simple case where there's a house and some accounts, et cetera, that could take a relatively short period of time with that type of state to value things, because you have either written statements or you can get an appraisal. But when you get into some more complicated cases, or where there's a family owned business, or a cash business, or something of that nature, I've had cases drag out forever in the discovery process because it's so hard to get the information exchange, and that really just doesn't happen in the mediation setting.

Shawn:

You covered a lot of things that I have some kind of followup questions on. One of them that comes up, I hear every week or so is, oftentimes one party may not be as forthcoming as they should be during mediation. How does one handle that?

Susan:

So, that happens. Definitely it happens in litigation as well. So, the first thing to remember is, because mediation is by agreement, both of the parties have a reason or reasons why they have agreed to come to the negotiation table in mediation. Mediation tends to move much more quickly than litigation, so maybe time is an issue for them. It's usually infinitely less expensive. Maybe money is an issue for them. Maybe they feel it's a better forum for working through the issues. Whatever their motivations are, that brought them to the table, are the motivations that will also compel people to be forthcoming with the information that is required.

Susan:

Because what happens is if people do not come forth with requested information, the mediation process comes to a halt. Because if you are sitting at a table and one party does not feel they have the information that they need in order to make the decisions or the agreements that need to be made, the process can't move forward. You are putting people in the position, by making that choice not to be forthcoming, you're putting the other side in the position of having to take you into litigation.

Susan:

Having to compel your discovery as we were talking about earlier with the motions, and the depositions, and all of that. So, usually, it takes the mediator reminding the parties why they're there, that this is a voluntary process. They agreed to be involved in it, and failure to comply with reasonable requests for information are just by necessity going to bring the process to a conclusion.

Shawn:

I think that makes sense. I want to ask some technical questions about mediation, or just some basic questions is, you're a mediator and you're also an attorney, do the parties also have their own attorneys? How does that work? Who's actually in these mediation sessions?

Susan:

The majority of my mediation sessions are just the two people who are going through the process. That is not to say that they don't have outside consulting professionals, and I am very much a believer in the team approach to divorce. I think that everyone usually will need some sort of support as they go through the mediation or divorce process, whatever they're going through. That can include a consulting attorney, because as you point out, I am an attorney, but when I am operating as a mediator, I am not representing either of the parties.

Susan:

That would be an ethical breach. You can't, as an attorney, represent both sides of an equation. There's a conflict of interest there. So, your mediator, even if they're an attorney, is there as a neutral professional to support both parties. But often, people will need some outside legal advice, and it can be very, very helpful to the mediation process for them to have a good professional that they can go to. Other professionals are people like you CDFAs. I highly recommend using a certified divorce financial analyst, or a financial support team, especially in those cases.

Susan:

You mentioned that there are often one side of an equation in a divorce where they're not forthcoming with information. There's another paradigm that comes up all the time where we have one party who's pretty financially savvy and the other one who is not, and so, they feel very disempowered in making decisions. So, getting them some support by getting them a financial advisor or getting them a financial planner analyst, can be very helpful to the mediation process because it helps to support them and educate them as they go through. Another person that's often brought in is a therapist.

Susan:

If we have parenting issues, and maybe we have an issue with special needs for a child or developmental issues around the child's upbringing. So, I very much believe in the team approach to divorce, the divorce process as a whole, and certainly in mediation.

Shawn:

If I'm thinking about the mediation process, sometimes people think, is it just one meeting in an afternoon, is it multiple meetings? How does that work?

Susan:

Generally, it's a series of meetings. My mediations tend to be scheduled for two hours at a time, and that is because in two hours we usually can make some headway, start talking about real issues, and making proposals, and making agreements. But beyond two hours, it's an emotional context, right? You're talking about your kids, you're talking about your money, you're talking about separating all those things. So, the emotional content is very fatiguing. You are either in the same room, or if you are with me mediating, you're in the same Zoom meeting, and two hours tends to be where people sort of burn out.

Susan:

And what I don't want is my clients making decisions out of fatigue, or just saying because they're just so tired and they want to move on saying, "Fine, I'll do that." Because what ends up happening is they then leave the mediation, that session, come back to the next one having thought about it and they will backtrack. And that's harmful to the process only because now we have trust issues, "Well, you said you would do it. I relied upon that and now you're backtracking." So, it's better to do it in bite sized chunks that you can process, take your time, and move through it.

Susan:

Usually, it depends on the couple. It's usually a few three, two-hour sessions. It can be certainly more than that. I've had cases move faster. There are other types of mediations, so another type of mediation for family cases that people will be acquainted with is a case that's been in the litigation process all along. They're usually close to the courtroom door for trial, and they will, as what I call last ditch effort, resort, to sitting with a mediator for sometimes a full day session to try and resolve those last outstanding issues.

Susan:

In those cases, usually the attorneys who have been representing the clients all along are involved, and those usually tend to be one marathon type, long day type session. But for people who start in mediation, their divorce process from the start is in mediation, usually two, maybe three-hour sessions and a few of those, but infinitely faster. I will tell you, most of my divorce mediations are completed before the sixth month. California has a six-month waiting period. Connecticut has a 90-day waiting period.

Susan:

Those are my States of licensure, and we're definitely usually done by the sixth month mark in California, three months ... It just depends on the complications of the issues.

Shawn:

That's good to know, and if I'm sitting at home listening to this or wherever I may be listening to this, how do I know whether I can go down the mediation route? What kind of things should I be thinking about to say and maybe even conversations I might need to have with my spouse in terms of, "This is an approach that may work for us."

Susan:

That's another great question, because that's one of my key things I want people to know, that your best approach to divorce is to try mediation in most cases from the beginning. Because if it doesn't work, you always have litigation to fall back on. That will always be there for you. But knowing that it's a possibility at the beginning and giving it a try for all of the reasons of all of the benefits that it has, is something that I love for people to know from the very beginning. So, some of the things to be thinking about are, do you have the ability to self advocate?

Susan:

And if you don't feel that you do, can you find support to help you with that? There are a lot of amazing divorce coaches, legal coaches like myself. I work with a number of people going through mediation, helping them to strategize what they're looking for. I was just listening to one of your podcast episodes and you mentioned the question, what do you want? That's a huge question when you go into a mediation. You don't go into any process of divorce without knowing where you want to go, or the process is going to happen to you rather than you being an active participant in it.

Susan:

But that's really the question, is do you have the wherewithal to sit down and do the work that needs to be done with the help of your mediator? And to bring your spouse to the table, people ask me all the time, "Well, I'd love to do mediation. It's less expensive, it's less stressful, it's less time consuming, it's less adversarial. All of those things, it's better. It helps us create communication pathways for our kids so that we can co-parent in the future." All of those are benefits and those are actually the things that help you to talk to your spouse about trying mediation.

Susan:

Because the thing I always tell people is, the one thing that we do know after having been married to someone is usually what their interests are. And usually, there's one or more benefit of mediation that will appeal to them. Often, it's the cost savings. You and I both know the average divorce in the United States is in the 20s of thousands of dollars per person these days to litigate. Many people, even if they have that kind of money laying around, don't want to spend that kind of money on getting divorce. By the way, it can go much, much higher than that. Mediation is much less expensive.

Susan:

It tends to be much less time consuming, less stressful. You have much more control over the process. So, knowing whatever you know about your spouse and what would appeal to them, that is usually the best way to approach them and ask them to consider the process.

Shawn:

That make sense, and can someone come to you for select issues in a divorce? So, let's just say there's 10 things to figure out and they agree upon seven of them, but there's three issues that they still haven't quite resolved yet. Would mediation work for that?

Susan:

Oh, absolutely. In fact, I often work with couples who maybe have worked out the financial side, but they need help with the parenting plan or vice versa. They know what they want to do parenting wise, but there are certain issues on the side of the finances that they just can't quite resolve. So, you can bring limited issues to mediation. Any sort of any issue can be mediated. Many people who have gone through divorce but then after the divorce there's been a change of circumstances. Someone loses their job, someone gets a big raise, something with the kids comes up and you need to change your parenting plan because children aren't static.

Susan:

I often mediate that post-dissolution type matter as well. The only thing I would caution, and I just don't want people, because attorneys and mediators are accused often of ramping up, making problems in a divorce that didn't need to be there. What happens sometimes, when a couple comes to a mediator or an attorney to work out issues and they think they've resolved a bunch of them, but they have a couple that still need to be resolved. The thing with a divorce settlement is it's a puzzle. It's not separate blocks of issues.

Susan:

Everything works together, right? It's a family. So, the money, and the kids, and the house, and all of those things work together. So, sometimes the outstanding issues will have an impact on those issues that they feel they have resolved. So, some of those issues may need to be reworked or looked at again if they don't fit into the overall puzzle context. But, again, that's where mediation is great because you can sit down and talk about, in the broad picture, why maybe perhaps something that they thought they wanted to do isn't going to work in light of another aspect of their settlement that they also would like to accomplish.

Shawn:

Yeah, that's a good point, is that sometimes it's very hard to isolate particular issues in a divorce, because if you pull on one thing or adjust one thing, it can affect every other item.

Susan:

Exactly.

Shawn:

It may work in certain cases, but you have to be open to shifting or changing other parts of the big picture when you do that.

Susan:

Absolutely. I always tell my clients in mediation, I work off a written agenda. I find people like the visual of an agenda that outlines all of their issues, and then I take notes on it for them as we're going along. I always tell them, although an agenda is a linear thing and item one, item two, item three, and even if we're going to move through it in that order, it doesn't mean that we have to resolve issue one in order to move on to issue two. Often, it's, let's discuss issue one, come up with some possibilities, and then table issue one and work on the next issues because in the end, all of them need to work together.

Susan:

As an example, someone often wants to keep the marital residence, and both sides may be open to that and may have reasons why they want that to happen. But until you get into the financial side, with support and asset distribution and debt distribution, you may not know if that person can actually afford to maintain the property. So, that's a very common question that will come up, where we have to sort of resolve the support issues and the financial issues in order to know if what they want to do with the house is actually going to work.

Shawn:

That's great. One last question, which is, at least as it pertains to the mediation, is you do online mediation work. I know you've done in person, of course, work as well. How do you find the difference between just the setting, be it a video call versus everyone's huddled in a conference room kind of atmosphere? Can you just kind of give us your pros, cons, thoughts about that?

Susan:

Yeah. It's interesting because I do now have an entirely online practice, and I have to say, especially for divorce mediation, I've actually found that the parties having the ability to have a little bit of space, because they do not need to be in the same physical location in order to mediate online, that's actually been a benefit for most of my clients. That they feel more able to emotionally deal with the conversations that need to be had as opposed to sitting just a few feet away from each other in the same room.

Susan:

I've had many people, when I had a brick and mortar practice, who would come and I would meet with a couple for a consult to just decide if they wanted to mediate. And in the end, it would come down to one of them saying, "I loved all the benefits, but I just emotionally don't feel like I can sit in the same room with my spouse and do this at this moment in time." Because as we know, divorce, yes it is a financial transaction, we're talking about money, et cetera. But in reality, it is an emotional transaction as well.

Susan:

And so, the video context gives people a little more space, but still you have the ability to see the other person because 85% of our communication is visual, and most of that is our facial expressions and voice. What we say and how we say it, our voice inflections. So, much of that is still readily available in the online context. So, for me, in my experiences, it's actually been a benefit to the mediation process, and most clients are thrilled to be online. They don't have to sit in traffic. They don't have to get a babysitter. They don't have to leave work early.

Susan:

I know you work online quite a bit and so you know some of those benefits. It has translated very well to the mediation practice. In fact, I train other mediators in how to conduct their mediations online, because this is such a quickly growing aspect of the mediation practice. My colleagues are fascinated by it.

Shawn:

Yeah, and I think that's one of the hardest things is when you are getting divorced, having to be three feet away from the person you're getting divorced from, staring right at them the whole time. It can make the emotional side of things amplify them quite a bit, just being in the same room. They're funny in retrospect even from the client's perspective, but a lot of times where someone yells, stomps out, runs out of the room, just can't stand being in person with that person they're getting divorced from.

Shawn:

It's divorce and it's not a pleasant process to begin with. This isn't a civil suit business dispute. So, I think there are a lot of advantages to the online perspective for people who might not have considered it as well, just from that.

Susan:

Yeah, the ability to, in any way that we can, keep the emotional content a little at a lower level is beneficial to the process. Because the minute people start making decisions from that emotional place, from anger, from fear, from hurt, whatever, divorce unfortunately doesn't embody usually a lot of positive emotions. It's usually a lot of negative emotional content, and the higher that level, the harder it is for people to make rational reason decisions. As you know, these are decisions that are going to live with you, and your family, and your children for years to come.

Susan:

So, you want to make them from the best emotional place possible, and I'm not saying that it's always easy. But another thing that I do is I incorporate mindfulness techniques into my mediation practice and encourage my clients to have a mindfulness practice if they're open to that, only because it does help. When the emotions start to rise up, to be able to take that step back and find some space. It's really important to be able to think clearly, and that's another reason, going back to where I said the sessions are usually only about two hours long.

Susan:

I want people making decisions in a space where they feel that those decisions were good ones, or at least made from a reasonable place and that they can live with them.

Shawn:

That's excellent and thank you for coming on and explaining the basics and the essential parts of mediation. It's not a subject that I talk about too often on my podcast. Why don't you give us the best way to contact you and to learn more? Hopefully, have people potentially work with you in the future if mediation or other services are right for them.

Susan:

Absolutely. Pretty much everything about me can be found on my website, which is divorceinabetterway.com. My email is susan@divorceinabetterway.com. I encourage anyone who's going through divorce to take a look at the website. I have a lot of curated resources, most of them free, or special discounts that guests on my podcast have offered. I have your book going up on my website shortly, so that people can find it who have listened to the podcast, or go there. But I like to bring as much information to people because that is so empowering in the divorce process.

Susan:

Get your education, get your information. So, divorceinabetterway.com, and then also the podcast has its own website which can be found through Divorce in a Better Way, or at divorceandbeyondpod.com.

Shawn:

And outside of mediation you were telling me you do a few other services. Just so people can know, can you describe those?

Susan:

Yeah, so one of my biggest areas of practice at the moment is legal coaching, which is a little bit different than divorce coaching, because what I'm doing is getting involved in cases. Usually, they're either high conflict cases, where someone is dealing with a high conflict ex that can be a narcissist, a borderline personality disordered person, or just someone who is very difficult to deal with, or high net worth cases. I'm helping the client to learn to manage those relationships, manage the communication so that they can have as much control over their lives as possible.

Susan:

I help with strategizing, with negotiation strategies. I've been a divorce attorney for 30 years. I negotiate every day of my life. I have to stop myself from doing it in the grocery line because it's so second nature for me. But your average person, unless they have negotiation in their business life, that's not a normal, that's not something that many people are comfortable with. So, I work with just a lot of clients on how to identify what they want and then how to strategize and negotiate to get that in the divorce process. I work with people all around the world in that context. I have clients across this country, Australia, Europe, Canada, all over.

Shawn:

Well, Susan, thank you very much for coming on the show. I really enjoyed the conversation and I hope the listeners will, too.

Susan:

Well, and thank you so much for having me, and thank you for coming on my show. Again, I loved that episode and so do my listeners. So, thank you.

Shawn:

Now, before you go, I want to make sure you get some really important information. I'm going to tell you about a few things that maybe of interest to you. First as a favor, is if you could leave a review, if you're on the iTunes store, leave a review on iTunes, or if you search Divorce and Your Money on a website called Trustpilot or on Google, you can leave a review there. It's quick, it's anonymous. It only takes a few seconds and I really, really appreciate your feedback. I have lots of reviews on iTunes and on Trustpilot, and I appreciate hearing your stories.

Shawn:

Also, on divorceandyourmoney.com, you can get lots of great information. Of course, you can book a 30-minute strategy session directly with me. There's two types of strategy calls you can book, just a normal strategy session, where we discuss the questions that are most pressing to you regardless of where you are in the divorce process, be at the beginning, towards the end, or in the middle. It doesn't really matter. There's lots of great information we can cover during that strategy call. Also, we have a document review call.

Shawn:

It's been one of the biggest things that we've done over the past year, which is you can send me your documents, be it your financial affidavit, a settlement agreement, or other documents that you would like for me to review. Then, I review those in advance of the call and then we get to discuss them in-depth as part of a strategy session and get specific answers to some of the specific documents and things that you are considering. Also, for those who need ongoing support, we do have a few options for ongoing support, but regardless, it all starts with a coaching call that you can book at divorceandyourmoney.com.

Shawn:

Don't forget to also get a copy of my new book. It's called Divorce and Your Money: How to Avoid Costly Divorce Mistakes. It's available on my website, or also on Amazon. You just look me up and make sure you get the new edition. It is filled with excellent information regarding the divorce process, and I know that you will find it helpful. Once you've read the book, be sure to leave a review. That really helps me. I appreciate your feedback and it also helps other people as they try and find this information. And finally, last but not least by any means is on the store at divorceandyourmoney.com, if you click on the store button, you can get access to the full archive of podcast episodes.

Shawn:

There's over 200 episodes, and what's great about the store link is that the episodes are organized in neat buckets, and they're organized by topic. So, it's very easy to follow along with the information, and it is easy to pick out the key topics that matter most to you. You can get all of those podcast episodes in the store. Thank you so much for listening. I'm your host, Shawn Leamon, MBA and Certified Divorce Financial Analyst. Take care.

0215: Top 10 Must-Follow Divorce Tips - Part 3 Feb 17, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

In this episode, we're continuing the series on the top 10 divorce tips, and I want to go through tips number seven through 10. In the previous two episodes, I went through one through six, and now we're going to go through the last four.

Tip number seven is keep your spouse from spying on you. What do I mean by this? Well, one of the things that's really important, whether you're planning for divorce or going through divorce is, or even after divorce, is making sure that your private information remains private. And that means you don't necessarily want your spouse to have access to your emails or your computer or all the sensitive communications that are going on during the divorce process and afterwards.

And you want to start setting up your own independent online accounts so that you can keep that information private. And I don't just mean online accounts, I also mean physical accounts as well.

So specifically is, I'll start with some electronic things. So you're going to want a different phone number. It's not good when you see X, Y, Z Divorce Firm popping up on your phone and your phone bill. So if you can set up or even better yet, get a new phone just for divorce communications, that's a good idea.

And the nice thing is, is that a smartphone these days is pretty cheap on Amazon or if you go into the store. And so you can get a phone for $25, $30.00 a month, and that allows you a new phone number, new way to communicate and a very private line for all of the various private things that go on during the divorce process.

I encourage you to consider getting a new computer. It's worth it to get a new tablet or new computer. Also, not a very large investment these days, so you can surf, do all of the relative online things with privacy and not be tracked by your spouse.

Definitely get a new email address. If you use AOL, go to Gmail. If you use Gmail, go to Yahoo. If you use Yahoo, go to a different service. One of the things that happens all the time is your spouse may have access to your emails. And something that happens all the time with the phone is that your phone's linked to an email account, so when you take a picture of a document or something, all of a sudden that picture shows up on all of your devices that your spouse is going to login to their pictures, and they'll be saying, "Oh, new picture added." You'll have a picture of a retainer agreement or picture of a financial document or a picture of something else. And if you don't have all of these things separated, you're going to unintentionally be providing your spouse access to everything.

So non-online things is get your own bank account. If you are at a bank, like Bank of America, get an account at a different bank. Go to Chase, go to Citi Bank, go to whatever your local bank is, a bank that you don't traditionally use. Because all too often, and I this every week, is where a bank teller starts sharing information about accounts they shouldn't be sharing information on, because you're still banking with your soon to be ex-spouse.

Get a new physical address. It's very easy to set up a P.O. Box for mailing things or one of those mailboxes at a UPS store, very cheap, very easy to do. And you don't have to keep all of these things permanently, but during the divorce process, very well worth doing.

And also monitor your credit report, just to make sure that there's no new accounts being added or new cards being taken out, just making sure that you understand that you have all of the right information. So that's tip number seven.

Tip number eight is avoid court, if you can. I talked about this recently in an interview that I'll be sharing with you in a few episodes. But one of the things that you should try and avoid is don't think that judges have your best interests in mind. Don't think that you're going to have lots of time in court. Don't think that it's the ideal place to get things resolved.

If you're in a position where you can avoid going to court, going to trial, spending tons and tons of money, fighting it out till the bitter end, and also ending up with an even worse result, I would suggest you do that.

Sometimes court's inevitable, and I talk about in my new book, some things about court that you should keep up with. But if any way that you can stay out of court and come to resolutions on issues, you will save time, money, emotional energy, and a lot of other from avoiding the court process.

Tip number nine is stay involved in your divorce process. This is an important tip, because a lot of times you'll have this opinion, you would have spent hours searching for the best lawyer getting recommendations. You hire someone, maybe you hire the most expensive firm in town, or you hire the most aggressive person, or you hire whatever and you say, "All right, my lawyers got this." Well that's not true.

I say this all the time is, "You're the CEO of your divorce process, and you have to make sure that you stay involved with every step along the way." Now sometimes staying involved means checking in. You should be hearing from your various people that are helping you through the divorce process, every couple weeks to make sure you know your case is on track, and you're not missing anything. Hopefully, they're checking in with you, but if you don't hear from them, all of us are busy people, definitely check-in. Make sure that things are going the way that you expect them to.

You have to be the project manager of your divorce, the CEO of your divorce, is make sure that all the things that are supposed to happen are happening. And sometimes things fall through the cracks, but if it does, it's your job to make sure that you put them on track and continue to stay on track.

And the last point in the top 10 is get an experienced divorce attorney. I'll be talking about this particular one in future episodes. Of course, I've talked about it on previous podcast episodes, but those are very important. It's very important to have an attorney help you, even if it's just for parts of the process. It may not be the whole thing.

So in summary, I'm just going to give you a quick recap of all 10 tips, and these are the must follow tips as you go through the divorce process.

One is, face reality head on. Two is, know you got this. Three is get organized, one of my favorite tips, and one of the most important ones. Four is, keep the big picture in mind. Number five is understand your expenses, also another favorite tip of mine. Number six is to create a marital history. Number seven is keep your spouse from spying from you. Number eight is avoid court if you can. Nine is make sure you stay involved in your divorce process. And ten is get an experienced attorney.

Thank you so much for listening to this series of episodes. Make sure you listen to all three. They're very valuable, as you go through the divorce process and lots of great episodes coming for you soon.

0214: Top 10 Must-Follow Divorce Tips - Part 2 Feb 03, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.

In this episode, we're continuing the series on my top 10 divorce tips, and I want to just jump in to the next ones. Tip number four, so if you didn't hear the previous episode, I gave tips one through three. Number four is keep the big picture in mind. If you know or ever heard of Yogi Berra, he has a funny quote that I like that says, "If you don't know where you're going, you're going to end up someplace else." And the point is with keeping the big picture in mind is what do you want? One of the questions that I will ask everyone if they don't have a clear answer for is what do you want out of life? What do you want out of the divorce process? Clearly things are going to be changing during the divorce process, and given that, you need to have some goals, some things that you're aiming for.

Start envisioning what your future looks like, and what I encourage is I encourage writing down your priorities. This is an exercise I go through every week, and I do it for me personally, but this is something you should be thinking about and thinking hard about, and it is, I usually ask two questions for if you're going through divorce. One is what are the three most important things that matter for you in the future? And secondly is what are your three most important goals for your divorce? The point is this, is if you think about your future and think about what your life may look like or what you really want to get out of life, you might not have concrete answers. Sometimes it might be a well, I want to be able to support my kid until they reach this age or get off to college, or maybe I want to start a new career, or it may be I want to pay off some debt and start fresh. There's any number of potential goals you may have. It may be I want to move. I've talked to a lot of people who say, well, I've been thinking about where I've lived isn't the place I necessarily want to be. I've been thinking about moving to some other place.

Whatever that is, it's worth writing down your goals and ultimately then sharing them with the people who are here to help you. Because one of the things that we can do, your attorney can do, you can do, is really guide yourself and guide the divorce process so that people are working towards the goals that matter most for you. And oftentimes in the divorce process, you have options, and one of the most valuable things that I think that I do and that an attorney can help you with is, hey, you have this pool of assets, but there may be five different ways to split them up that gets you to the same place, but maybe way number four is the one that actually gets you to the goals that you're aiming for. But if you don't know what those goals are and you're not able to share them, it's hard for all of us collectively to get you on the right path.

The next tip, which is tip number five, is one of my most important and one of my favorite tips when it comes to the financial side of things, and that is understand your expenses. I have a line, so I've written I guess three books at this point. One of my first books is more general financial advisor related, but I have a line in there which is one of my favorite lines. It says expenses are guaranteed, making money and investment and income is not. And so what I mean by that is that you have a fixed base of expenses. Some people call it a monthly net, monthly nut, some say it's just your expenses, but it's your housing, your car, your food, your activities, your clothes, just the normal way that you live your life. And most people don't sit down to understand, well how much do I need to cover my expenses each month?

Now, I do know some of you who know offhand, and that you know that every month you spend $8,000 or you spend $24,000 or whatever the case is, and you kind of have a pretty good idea, but most people have no idea how much they spend every month, and it's usually a shock to once you sit down and figure out what your expenses are. And so one of the things I really encourage you to do is to understand your expenses and your expense picture as you go through the divorce process and figure out what areas you might be able to cut as you go down later. Now if you complete a financial affidavit, in many states the financial affidavit or statement and net worth statement has and requires some very, very detailed expense information. And while it's admittedly a pain and perhaps kind of overwhelming to fill out that information, on the plus side, that information is very helpful when it comes to planning your future, because you'll have a baseline of like, hey, here are all the things that I've been spending on. Do these expenses make sense? Can I continue this lifestyle afterwards, or most likely, for most people that I talk to and work with is, is that you'll have to make some adjustments.

But that's okay. At least you know. And so one of the next steps I really encourage everyone to do is an exercise also that I personally do, even though I'm not in the middle of a divorce, but I do almost every month, is really understand all of my expenses. In my book Divorcing Your Money, How to Avoid Costly Divorce Mistakes, I have a great checklist of expenses that you should go through, everything from housing expenses, food, clothing, entertainment, insurance, medical expenses, transportation, debt service expenses, be it credit cards or otherwise, if you have education or child related expenses. Kind of list out the things that you should be thinking about. But like everything, when it comes to expenses, you don't always have to over complicate it. One of the things I do, and I've said this before, is I always just start with a blank sheet of paper.

I carry around stacks of blank printer paper, because that's what works for me. And I also carry around a notebook that has blank paper in it, and I just start listing things out and I say, hey, that expense is about $250 a month, that Netflix is $12 a month, this is whatever. And I just start adding it out on a monthly basis and then start figuring out, oh hey, I've got to get my car serviced once a year, which costs X amount. I had some maintenance issues on my car this year with some tire replacement. So I figure that's every few years, and I kind of plan that out. But I just, I know what my housing costs every month, electricity, water, et cetera. And I just list those things out and figure out, okay, well I spend this dollar amount a month, so it means every month just to stay even, I need to make at least this amount.

When you do this, I've worked with people of all income levels, from people who make $20,000 a year to people who make $20 or $30 million a year, and we still go through the same exercise in the same way and 100% of the time the answers are surprising to those I work with, because you're not used to looking at how much you spend, and when you really do list out all of the things that you spend money on, it will help you really figure out, well, what do you need? What do you not need as much? I spend a lot of time thinking about small subscriptions, be it a $10 a month or $20 a month thing, because I started looking at them as like, well, if I spend $10 a month, I'm probably not going to cancel that subscription. So let's see, $10 a month for a year is $120, and if I probably keep that subscription for five years, that's a $600 expense. So before I sign up for something that's $10 a month, I say, hey, is this really worth $600 to me? Because even in the short term, it doesn't feel like much every month, but in the longterm that certainly adds up. And so it's really worth thinking hard and listing out those various expenses.

Finally, one more tip that I want to get into for this episode is creating a marital history. Now, I've talked about this on the podcast before, but it's an important topic and it's worth doing, and very simple, is that you should list out all the key events when they happened in your marriage. They can be financial events, they could be relationship milestones, they could be kid related things, they could be educational related things, but what I do, it can be real estate transactions, whatever the case is, but the goal is to create a timeline. Now, why do you create a timeline of everything that happened during the marriage? Well, I put dates, could be specific dates, could be month and year. It could just be year, if that's all the information you have at the moment.

But the importance of the timeline is that when you have a timeline, it can help you in that when you have other professionals working with you, be it your attorney, be it a financial person, be it a mediator, be it whomever, they can walk through this timeline and they will be able to see, okay, I'm starting to get a picture of how the relationship started, the key events in the relationship, and in the span of five minutes, we can figure out, all right, here's a pretty good way to catch up on the last five years, 10 years, 30 years or more of marriage and understand it succinctly, rather than when you try and tell it to us, it's easy to get sidetracked. It's hard to keep everything straight. It's easy to forget different events, but when you have just a timeline, it's easy for us to say, okay, here's the key things we need to be thinking about in mind, and here's better ways that we can understand this history and therefore inform how we approach the strategy and execution of the various elements of the divorce process.

Now, when I talk about a timeline, people ask, well, what format should it be in? Does it need to be notes? Does it need to be ... I say, whatever works for you, so long as it's easy to follow. The important thing about a timeline is that it's in order. So one of the things I like is an Excel spreadsheet where one line or one column is the dates. The second column is just a short description, a sentence, two sentences, maybe three sentences at most, of what happened and why it's relevant, and in an Excel spreadsheet, it's easy. If you have a Word document, you just put it there and organize it.

The point is there's no need to over complicate it. It's just so everyone knows what's going on, and it's very useful looking back even for you as to many of the things that happened during the course of the marriage, and keeping them succinct, because if you get into them, there's oftentimes a lot of contexts you want to share and and oftentimes it's too much too soon, but you don't necessarily need to get into all of that immediately and right away. So one of the things I recommend is just keep it succinct. If there's something that your attorney is going to have more questions about or that that I'm going to have more questions about, or your financial professionals or an accountant or a business valuator, whoever it is, is going to have additional questions about, we'll ask. We know what to look for. Some things might not be relevant to us, but it all just helps, and we can distill down a lot of information quickly when you start preparing this marital history, this marital timeline of all of the key events, be it emotional, financial, family related, et cetera, that occurred, and it really helps us and helps us help you a lot better.

So the three things for this episode, is keep the big picture in mind, understand your expenses, and create a marital history. And in the next episode, I'm going to cover a few more important tips out of my top 10. We've covered the first six, and we will get into just a few more in the next episode, and some really important ones.

0213: Top 10 Must-Follow Divorce Tips - Part 1 Jan 12, 2020

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

In this episode and the next couple of episodes, I want to get into the top 10 must follow divorce tips. I want to cover a bunch of different areas quickly so that you can... If you only have to focus on 10 things, these are the 10 items to focus on. And I'm going to cover them and get into them, and in this episode I want to cover three areas of the top 10 in particular. The first is face reality head on, the second is know you can do this and the third is to get organized. The first tip is to face reality head on. When it comes to divorce and it comes to planning for a divorce or being in the middle of divorce, one of the things that you have to think about is understanding and accepting that this is happening.

Yes, it's happening to you. Yes, this is your life and this is real. And many times during this process, it can be easy to want to feel denial. Feel like you're not going through this or not want to deal with the hard and harsh reality of a relationship and maybe you want to bury your head in the sand, not accept what's happening. Maybe you're overwhelmed or anxious or depressed or filled with emotion. And unfortunately, when it comes to making decisions during divorce, particularly financial decisions, but much of many of the decisions during divorce, is you need to face the reality head on and accept that it's happening and put your emotions to the side. And even though you feel like you may have or you may have a lot of emotions floating around, when it comes to making the best financial decisions, whether you keep a house or retirement account or when to divorce or how to best protect yourself, emotions can't really play into it.

If you want to end up in the best decision possible, you have to treat it like you would a business deal. Now, it doesn't mean that you can't work through your emotions, but those are for a therapist, those are for your friends, those are for your emotional support team, but when it comes to your financial team and making financial decisions, accept it's happening and now, okay, the divorce process is happening or about to happen, what can I do to best protect myself, my kids and my future?

The second tip when it comes to the top 10 tips is understand that you got this. You have to keep in mind that the decisions that you make today are going to potentially affect you for the rest of your life. And so understand that also, you're going to get through this. Divorce in most cases last six months, a year, two years for most people, and then you're going to have the rest of your life ahead of you. And even though this may be the first time and hopefully the only time you have to go through this process, you probably have most, if not all the skills you need to get through it and make it through in one piece. And the phrase that I like to say when it comes to divorce is you have to treat yourself like you are the CEO of your divorce process. You are the chief executive officer. You are the conductor. You're the person they're in charge and making the key decisions as you navigate your life and you navigate all of the different complications in the divorce process.

Now, some of you listening, I know because I talked to you are the CEOs or are executives in companies, in which case although the situation is personal, deeply personal, you're used to making hard decisions on a daily basis, just this time it applies to your life. Others, you might have been a stay at home parent or may not have been involved in the finances or just may feel overwhelmed with the divorce process, but the funny thing about it is 100% of the people I've ever spoken to, worked with, talked to through the divorce process, have the skills to navigate through this process even if they don't feel like they have the skills to navigate the divorce process and make those key decisions and be the CEO of the divorce process.

I'll give you just a very simple example is if you are a stay at home parent, you've probably been used to running the family. You are the CEO of the family, making sure the kids got to the right place, making sure all of the appointments were handled and their lives ran smoothly. And so you may have been the CEO for the kids and the family and so it's taking this very, the skill set that you have, you may not realize you have and applying it to this really difficult and challenging area of your life, but you already have those skills. And so it's just realizing that you have those skills, those capabilities, and it doesn't mean you have to go it alone. It doesn't mean you can't get help. A good CEO has help for various divisions, so it might be legal help, might be financial help, might be emotional help, might be help with a specific issue as it comes to the divorce process. Being a CEO is not a solo job necessarily, but it does mean that you do have the power, the capability to get through this process.

And the third topic is get organized. Third tip is get organized. One of the best, most helpful things, whether you're at the beginning of the process, in the middle of the process, is just having everything organized. In fact, myself, I spend much of December and January just organizing my year because once you do it and get most of it done, it's very easy to formulate plans of attack going forward. But if you don't, if you're disorganized, it's very hard to make decisions, know where to go, be able to check to make sure you're on track with certain things, to formulate a plan, and there's a lot of different elements related to just getting organized the first time. In fact, I've spent the last two weeks and I still have another week where I am literally just spending every day, a few minutes a day organizing everything from last year and my plan for this year because that's how important it is and it makes the rest of the year regardless, I know there's going to be challenges and hiccups, but it makes it go much smoother.

And so in my new book, Divorce and Your Money, called How to Avoid Costly Divorce Mistakes, right in the beginning of the book around page 20 or so or 21, 22, is I have a really good getting organized checklist, and it covers all of the different documents that you will need to start thinking about as you go through the divorce process and I encourage you to put together a binder or if you use computer, electronic folders with all of this information, but when you get organized for divorce, it's things like when you got married, your kids' names, personal information, social security numbers, stuff like that. Just the basics, but it also includes things like listing out your major assets. When did you acquire them? What dates did you acquire them?

It has information like getting tax returns, income statements, pay stubs, things like that. Employment records, whether you have stock options. I talked to a lot of people who have stock options or incentive compensation, financial records like bank statements, investment account statements, loan statements, whether you have pension plans, there's lots of different financial details to gather regarding retirement accounts, debt, getting your credit cards and most recent credit card statements together, real estate statements, figuring out home values, mortgage balances, et cetera, but what I encourage you to do is gather up all your financial information, put it in a folder or save it on your computer somewhere, save it on a thumb drive, and when you have it organized, it's something that you can, once you... It will take you some time to sit down and gather all of your documentation and put it in the appropriate folders and file it appropriately and determine what you have and make sure you have it.

It will take you several hours, but once you have it, whether it comes to working with a divorce attorney or working with financial team, be it someone, a certified divorce financial analyst like me or an accountant or your home appraisal person, whoever is helping you during this process, you'll have the information ready and if you need to find something else, you already have such a good base. It'll make the process, all things considered, smoother and easier for everyone involved, not just you when you get organized up front. And so one of the favorite parts of my book is just there's probably five to eight or 10 pages of all the different documents you can do or you can gather to get organized and formulate a document, be it a folder or an electronic folder of information when it comes to the divorce.

Because one of the things your accountant may ask you or one of the things your attorney's going to ask you or that I might ask you is, "Hey, do you have the account statement from December, 2019, the year end account statement for your IRA account from fidelity?" And because we want to figure out the value and what to do with that state, what that account or get an approximate value for it. And if you have that information handy, it makes it very quick for us to analyze and know what to do with something versus, "Oh, hey, let me dig it out." And in two weeks you finally get access to the account. But if you have it upfront, it'll make things much easier.

So those are the first three tips in terms of my top 10 tips to start the year and top 10 tips for getting divorced that you should follow as you think about going through this process. And just a quick recap, first is, look, face reality head on. It's happening, deal with it, accept it. That's that. Second is even though you understand that it's happening and it's going to be hard, it's going to be really, really difficult. Know you've got this. This process will end. You will get through it. Take it a day at a time, take it a minute at a time. Sometimes take it a few seconds at a time, but you will get through it step by step.

And then the third thing, at least for this episode, is get organized. People who are organized, it will just make the process much smoother, much more efficient. You'll save a lot of money and time just from the organizational process. The more you can do the better. And it is one of my most important tips in terms of everything is just getting organized even if you just got organized and handed those documents off to your attorney or to me, or to whomever and just said, "Just take it." It is much better to have a set of organized documents than nothing at all or a bunch of scattered and sporadic documentation.

0212: [New Book!] How to Avoid Costly Divorce Mistakes in 2020 Jan 02, 2020

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Avoid Costly Divorce Mistakes

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0211: Guide to Handling Debt in Divorce Nov 10, 2019

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

In this episode, I want to focus on discussing the ins and outs of debt. It's a very controversial, and frustrating, and challenging issue that can pop up during divorce. I haven't covered it in a while, so I want to make sure that you understand the essential items when it comes to how to deal with and split debt in divorce and provide some tips so that you can make the right decisions and do what's best for your specific situation.

When I think of a debt, the most common of course is credit card debt. Other things can be personal loans. Medical bills are common. Auto loans fall into that category. Student loans, mortgages, I'm going to exclude student loans and mortgages for the moment because they have some different intricacies than debt overall. But even if you're thinking about student loans and mortgages, many of the core principles that I'm going to talk about here apply to this episode. It really applies to any kind of debt that you may have, so you should really understand your options and what kind of the best things to do may be when splitting debt.

The things I want to cover in the debt episode today is five, or four or five important points. I think four points we're going to focus on. I'm going to go through them in depth. The first is establish what separate versus marital property. Second is minimize and pay down joint debt. Third is split debt simply. And the fourth is going to be if one spouse is responsible for a joint debt, make sure that those payments actually get made. We're going to go through these particular items. Things you should be thinking about when it comes to your situation is debt is one of the most common things we deal with. And almost every person I get to work with, there's some sort of debt I'd say 95% of the time, and we have to figure out what we want to do with it and what the smartest options are given the situation.

So let's start with point number one, which is establish what's separate versus marital property. This is where one of three dates can be very important in the context of your divorce. The first is the day you file for divorce. The second is what might be considered the separation date. The third might be something that is a date that's relevant in your state for a particular reason.

Why are these dates important? Well, you want to understand, and you need to have a clear understanding, is what actually is joint debt, or marital debt I should say, and what is actually separate debt that the person who incurred it, who took on that debt needs to pay for. The reason it's so important is that many times ... Almost every day I talk to someone, like you, who says, "Hey, my spouse went up and got this big credit card bill. I didn't even know we had the card. I don't know what the money was for, et cetera. Am I responsible for it?" Or you'll say your spouse is terrible with money and did this and that, and now all of a sudden we have this debt, or he has this debt, or she has this debt. Am I responsible for half of that amount?

Well, the answer is really hard and depends upon your state. But if you have a clear date of separation or a clear date of divorce, or I should say date the divorce started, that could be an indication of what debt is yours and what is not. There's also a discussion, as every state has different rules and different ways that they treat debt, but sometimes there are other dates that are of relevance. Also, I discussed before in a previous episode, if you haven't heard it, about dissipation of marital property, in which case sometimes if someone wastes money that's not related to furthering the marriage then that can be also considered separate and belonging just to that person rather than joint debt.

But regardless of the situation, it can be ... Or I should say marital debt. Regardless of the situation, you need to really be clear and work closely with your attorney and your financial advisors to figure out, all right, what does the law say? What is actually my debt that I will be responsible for splitting? And what is the debt that solely belongs to my spouse?

Now, there's a difference between divorce rules and other areas of the law. If your name is on the debt ... And we're going to get into this a little bit more in this episode. If your name is on the debt, then you are legally responsible for it, even if that debt may be considered separate property. If you just stop paying that debt and you're responsible for the debt, the person who ... If you went to Visa and had a credit card that had both your names on it but your spouse ran up the bill on that Visa card, you might say, "Well, it's separate property for divorce purposes." But if that spouse doesn't pay down that credit card, then they can still go after you and your credit for the remaining bill. The important thing to do, and one of the most important things in divorce, is just figuring out what you have to split and figuring out what is actually something that you're splitting versus something that gets moved on to the separate property side of the pile, and that applies equally to debt.

The second thing is minimize and pay down any joint debt. I talk to a lot of people who have IRS debt. I talk to a lot of people have joint credit card debt. One of the pieces of advice I say is if you look at your full financial picture, one of the questions is, can you pay down this joint debt with other assets so that when this divorce is over you're not still tied to your ex-spouse in any way financially or have any liability connected to them because you still have a joint debt outstanding? And now, of course, it varies by person. But to the extent that you can talk to and talk through the joint debt issues and your financial picture will allow you to pay it down, then you should pay down that joint debt as part of the divorce process and just be done with it. Makes things much smoother or can make things much smoother down the line when you are ... after the divorce is over.

The third tip is to split debt simply. What is most important about that is that the person whose name is on the debt, to the extent possible, in general, should be responsible for paying off that debt. Now, let me be clear, is just because they're responsible for that debt doesn't mean that it's separate property. It still could be a marital debt that just happens to have only one person's name on it. But if you have a credit card, and ... I'm just going to make up a very simple number. But if you have $1,000 on a credit card that you racked up while buying groceries over a few months, that could very well be a joint debt. But as you think about splitting things in divorce, you should take that debt and be responsible for paying it on your own after divorce is over because it's much easier than trying to transfer it to another spouse and going, to your ex spouse I should say, and going through that process.

Conversely, though, you have to remember that one thing that a lot of times you forget or you may forget during the divorce process that everything is a trade-off. Negotiating a settlement or coming up with an agreement in the divorce process is just about what trade-offs are you going to make. So if you take the example of the thousand dollar marital credit card debt, you might take it as part of the divorce settlement. But still, 500 of that thousand belongs to your spouse. So what happens is you would get an extra $500 worth of another asset. It's not like you're taking the debt and you're losing out, it's that you have an extra 500 of a negative balance on your ledger so you're going to have to get $500 extra of assets somewhere else to make up for it. So, it's not a one-way street.

And conversely, if your spouse has a debt, let's say they have a $5,000 debt, that turns out as marital property, well, it might just be much cleaner and simpler for that spouse to take that $5,000 debt. But conversely, to make up for it, maybe they get an extra $2,500 out of a bank account or something or proceeds from something so that they get their share of the debt. But at least you're not the one who's responsible for paying it. So there's both sides to the issue. The most important point is that it's just a trade-off. Financially, it's just numbers on a piece of paper. We want to get those numbers as fair as possible as we can, and it's easy to account for many times just by what assets you give up or what you keep.

And then finally, the last point is that if one spouse is responsible for a joint debt, they need to make sure that they make ... You need to make sure that that person actually makes the payments. I'm going to give an example that I've dealt with many times in the past, which is oftentimes as part of the divorce process you have some debt and you're going to sell the home. And as part of selling the home, you need to pay off some debts with the home proceeds from the equity, and it's actually your spouse's job to pay off some of those joint debts. Well, if you sell the home and give the spouse the money to pay off the joint debts, what happens if they decide to spend that money on something else and don't pay down that debt they agreed to? Well, the money's gone.

Or what happens if they just hoard the money? Or what happens if they only pay down part of the debt? Or what if they tell you they paid down the debt but didn't actually do it? So maybe months down the line or years down the line you find out that that debt is still outstanding and you're getting calls from credit creditors and your credit, your personal credit, goes down the drain because your spouse didn't do what he or she was supposed to do with the proceeds that you gave them.

Or if you're not even giving the proceeds, sometimes you could just say, "Hey, there's this credit card from MasterCard that has $10,000 outstanding. It's the sole responsibility of your ex-spouse to pay that card down," and to not hold you liable. Well, it's all well and fine that you came up with that agreement, but MasterCard didn't agree to your divorce settlement. So if your spouse doesn't pay that debt, then they will be coming after you for the remaining balance. The point is is this is why I also said in point number two is to minimize and pay down any joint debt. When you do have some debt that's outstanding, you really need to make sure that your spouse or ex-spouse is on top of paying that ... or that debt down because it can come back to haunt you later.

So here are the four things to focus on when it comes to debt. The first is establish what's separate or marital property. The second is minimize and pay down any joint debt. Third is split debt simply. The person with the name on it, generally speaking, should be the person who keeps it, and takes it after divorce, and takes that responsibility. And forth is if one spouse is responsible for a joint debt then makes sure that they make the payments.

Here's the big overarching thing that I always keep in mind when talking about debt, and that is you want to minimize your liability. You don't want to be liable or have liability connected to your ex-spouse when the divorce is over, particularly when it comes to debt. Look, you might always have kids or something like that together, so you're always connected to them. But when it comes to certain financial things, if you can avoid having joint accounts with both of your names on it, it prevents anything bad from happening later down the line with those joint accounts if one spouse racks up a bill, or if one spouse fails to pay a bill, or if one spouse steal some funds from something. Whatever the case may be, it's oftentimes much, much more expensive to try and go back through the legal process than just dealing with these things with a little bit of foresight and thinking about them in advance.

I really want you to listen to this episode, understand the key points, and think about the debt that you may have as part of your divorce. Make sure that you're handling it and splitting it the right way because it's a very important topic that we have to deal with and deal with carefully to make sure that you end up in a good position when this process is complete.

0210: How to Keep Separate Property Separate (and Know if Separate property is Actually Marital) Oct 27, 2019

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One of the challenges in divorce is making sure that separate property stays separate. And it could be the case that you're trying to prove what's being claimed as separate property is actually marital property. Now it's a bit of an advanced topic, but an important one, and just a reminder, and I said this in the previous episode, if something is marital property, it means you have to split the value of it between you and your spouse during divorce. And if it's separate property, then the person whose separate property it belongs to gets to keep it and you don't really discuss it at all as far as the divorce goes.

One of the most common types of separate property is an inheritance where the parents of one spouse gives them a bunch of money. He may be married or not married at the time and that inheritance is a common type of separate property that exists. Another time it could be a retirement account or a house bought before the marriage.

Now if you didn't listen to the previous episode on tracing and how to trace separate and marital property, that is important context for this episode. But also I want to give you some different tips and how to keep separate property separate and how to maybe prove that that separate property is actually marital property and ways to do that cleanly and things that you can think about. Because also one of the important points when it comes to separate and marital property is sometimes not all of the property is separate. So sometimes a piece of property, let's just say it's worth 100 bucks, could be an inheritance, could be a retirement account or something else and say it's $100 today. Well it could be the case that 10 of those $100 are actually marital property or 50 of those $100 are marital property or all of that hundred is marital property.

It's not always an all or nothing thing and so there are some gray areas and I want to show you how to avoid the gray areas depending upon who you are or actually to ensure that there are some gray areas so you can get your appropriate share. Now the other thing I always have to say, particularly with this type of an episode, is state laws vary a lot in terms of the languages they use and how they discuss whether something is separate or marital property. So make sure you ask your attorney some of the mechanics of the particular asset that you're discussing when it comes to this. But I'm going to give you three tips in this episode on how to keep separate property separate. And that's what I'm going to focus on. One is to avoid co-mingling. Two is to keep track of income and dividends and three is a prenup or postnup.

So let's get into these. Let's start with point number one which is avoid co-mingling. It's a term you've probably heard before and it just means keep something that's separate property, always in a separate account with only your name on it. And so if you get an inheritance, let's just say a $100 inheritance, because we can all do math on $100. Let's say you get an inheritance of $100 and you got it a decade ago. Make sure that that inheritance only went to a bank account and stays in a bank account in your name only. And then the other element to that is don't ever move those funds to a joint account because once you move those funds to a joint account and they get mixed up with a bunch of joint assets, it makes it very, very complicated, expensive and challenging to go back in time and try and figure out how much of that asset is marital property and how much of that asset is separate property.

The second point to think about is that you need to keep track of income and dividends, so it's not just enough to keep money in a separate account to keep that property separate. Sometimes, depending upon your state laws, the income from that account or the dividends that come in from the account or other things related to that could become marital property and they don't stay separate.

So if you get, let's just say you have an account with $100 in it and every year you get one extra dollar in income on that account. So after 10 years you've got $10 of income. Well, you need to keep track of that income every year and maybe even deposit that income into a separate bank account. It can still keep your name and your name only on it, but when you keep track of it in a separate account, it makes it easier to figure out, "Hey, that portion of the account may ultimately be marital property, therefore let's keep it." And that way it's easy to track it and you don't have to go get a bunch of forensic experts to say, "Oh yeah, here's where all the income came in."

Some of the terminology used for this is an income sweep account, if you go to a bank or something like that, and that means that the income is swept into the various portions of your account. The way to do that, or so if you're on the other side of that issue, even if an account is mostly separate, you need to go back and ask your spouse or get the records to see if any income came in from that account because that income may be marital property for you to discuss and split up.

And so that's where one of the levels of complication comes in. But to the extent you can avoid it, if you're the person who owns that account, you want to keep it clear if any income came in or dividends came in and make sure that that is separate. It just depends on the state laws whether or not that income is considered separate or marital. And so you need to ask your attorney how it applies in your state and your situation. But that's something to think about.

The third thing to think of, if you are able to have some foresight and that is to get a prenup or a postnup. Now, if you're listening to this podcast, you probably are not thinking about a prenup, but you might have one that exists, in which case it would be important to think about what's in that prenup. But also you might be able to investigate a postnup or postnuptial agreement, in which case you can designate certain assets as separate in the event that you get divorced. And one of the places I actually see a lot of postnuptial agreements and a lot of prenuptial agreements is second marriages, and even a postnup.

If you're getting married after 40 or 50 it's very possible to go back and get a postnup and get that. And if you agreed to a postnup, you can designate a particular inheritance or designate a business or a home or retirement account or whatever the asset is as separate property in the event that you were to get divorced. So that's something else to consider.

And if you're on good terms with the spouse and maybe a divorce isn't for another several years, you could perhaps, depending upon the situation, have that discussion about a postnuptial agreement and go from there in terms of protecting yourself and protecting a particular asset as it goes on, as time goes on, and keeping that separate property separate.

Now one last warning, one last topic and that is is even if you do everything perfectly, it can still get brought up in a divorce and it can still be a fight and a discussion that comes up as part of the divorce process or at a minimum, the opposing, your spouse's attorney can ask for records related to a certain asset even if you did everything properly. So one of the things I talk with you about all the time on coaching calls is, "You kept it separate, it was clear it's separate, but your spouse's attorney is getting a bunch of records on the particular asset," or it could be a house, could be inheritance, whatever, and you get worried. Well, if you did everything right, there's nothing to worry about.

Now if you're on the other side and you didn't do everything right, there are certainly some things to think about and things to prepare for. But, and there might be some more expense involved, but if you did everything right, so be it. The way that I look at this on a different way is even if you do everything right and you did everything right and your spouse's attorney is asking for records on things, it's their job to.

And so your job is to make sure you have all the records and have everything cleanly set up so that there's no question when it comes up. It's their job to question everything and try and get more assets for their client. So even if you do things perfectly, you're not necessarily out of the woods, but if you don't do things perfectly, it can really complicate things down the line. And so what I want you to do with this episode is make sure you're thinking about and you understand and you have a concept of all the issues you might be facing when it comes to separate property or marital property and how to keep things separate or how to challenge whether something is actually separate or marital property. And the three tips are avoid co-mingling the assets, keep track of income and dividends and finally to consider the prenup or postnup as it comes to getting divorced.

0209: Why “Tracing” is Important to Determine Separate & Marital Property Oct 13, 2019

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In divorce, one of the big questions is whether something is separate property or marital property. If it's separate property, than the person who had it before divorce keeps it. And if it's marital property, the value needs to be split amongst the people divorcing. And so, one of the questions that we deal with a lot and I help people navigate is how do prove whether something is separate property or marital property. And what do I mean?

Well, the most common is an inheritance. If an inheritance was given to one person, is that still considered separate property or is it marital property? Inheritances, sometimes they're small, but sometimes they are very big because they can be a parent's lifetime of savings. Could be something like a retirement account, where there was money in the account before you got married and then it grew during the marriage. But how much of that is marital property that you split and how much of that is considered separate property?

What about the house? Same deal is what if you bought it before you were married. Does a person who bought the home beforehand own the house or not. It could be things like trust, business interest. There's a lot of different assets and many different questions that can arise when trying to determine whether something is separate or marital property. It's a big deal because if you prove that something's separate property, it doesn't get split, but if you prove it's marital property, the value does get split as part of the divorce process. But the big challenge is, is how do you prove something is one type of property or another.

And it's an important discussion and something that we work with on a lot of our divorce calls or coaching calls, I should say, for people going through divorce or preparing to go through divorce. And the difference or figuring out the answer can often mean the difference between hundreds of thousands of dollars that one spouse gets or has to give up or even millions of dollars in some cases depending upon the asset.

The problem with this subject is it's really complicated and I'm going to discuss a term called tracing. It's T-R-A-C-I-N-G, tracing. And that's going to be the subject of today's episode. And it's the process of figuring out whether if something is separate or marital property. And to compound things further is sometimes an asset that you're discussing or even a debt in some cases that you're discussing can be both separate and marital property at the same time. And so, figuring out what it is can be extra complicated. And really for the sake of this episode, I want to focus really on just two things. I want to introduce you to the subject, but the two things I want to focus on are one, getting the appropriate documentation. And two is hiring the appropriate financial experts.

So, the first and biggest and most complex challenge with tracing assets is having the documentation. And for the sake of the example, I started the episode with different types of examples, but we're going to take a retirement account for the sake of an example as I walk through this episode because it's easy to illustrate the point as to why this gets complicated. One of the biggest issues with getting the documentation is that it can be old. If you've been married 10 years, then you have to go back and get statements from 10 years ago. If you've been married 20 years, then it could be 20 years ago. If it's been 40 years, then you're trying to get documentation from 40 years ago. And as businesses change, as the world changes, a lot of the institutions that you may have had at the beginning don't have those account statements at in their records anymore. Some times they might only have a year or three years or five years.

And so, trying to go back and get 10 or 20 years or 30 years of data is very difficult. But the important part is, or why this is so important, is that you need to be able to track where every dollar came and went to the extent possible over the timeline of your marriage. Now, here's a really important question to ask your attorney because state laws really differ on this subject, but many states have laws in place that property is assumed to be marital unless you can prove it as separate. And so, you really need to be careful because other states have different rules regarding this. So I don't want to generalize too much on this point, but this is why getting the documentation is important is if you can't prove or oftentimes if a spouse can't prove that the property is indeed separate, it's marital property. It needs to be split.

Now, depending upon what side of the issue you're on, that could be good for you or that could be bad for you. And we're going to talk about some ways around it. But the point of that is you need to be keeping good records and you need to be keeping your account statement. And often times, if you walk into your local bank or you call Fidelity or you're financial firm up and you ask for records, they might say, "Well, we only have a couple of years worth and that's all we can provide." Well, that doesn't really help too much, but believe it or not, you might just have to keep digging and they might actually have more records than they will initially tell you. One of the things I always encourage you to do on coaching calls is don't stop at the first no, where they say they only have X amount of records. Most financial firms have many, many more years of records than they will initially tell you. The challenge is you have to figure out who will provide you access to them and how to get access to them, particularly if it's for your account.

For a variety of reasons, they are legally required to keep many years of data. And sometimes it's in paper format, sometimes it's in a warehouse somewhere, but they often have that information for you to get. And so even if you get a first no when trying to get the financial data, don't worry. There will be more opportunities if you keep digging and it may require some help with an attorney regarding a subpoena to see officially what that firm has in terms of data.

Now, ideally also for yourself, if you're thinking about this, I encourage you to keep good records, keep backups of all of your records, particularly for important accounts over the years because having a snapshot of those can come in handy when it comes to something like tracing. Now, there's also an easier solution to all of this and this is... I don't want to get your hopes up too much because this easy solution does not work in all cases. And when it works it's great, but to be fair, most of the time it doesn't work, but sometimes it does and it is worth bringing up. And particularly if you can avoid a bunch of legal fees and expensive fees, I'm going to get to fees and financial experts in the next section of this episode. But if you get this easy solution, I encourage you to use it and it works for both parties.

If you come up with a reasonable guess. And that is that you guess, you estimate. You make an estimate of how much of a certain asset was separate and how much of a certain asset was marital. So, if you know that there was an inheritance and it might have come 15 years ago, that you got an inheritance or a spouse got an inheritance and it might've been at the time $112,363. Well, no one really remembers the exact amount, but if you both think it was around about a $100,000 and you're willing to agree that it was about a $100,000, and you can move on, then move on. Rather than trying to track down, you're going to spend that extra $10,000 or $15,000 just trying to track down all the records and you might've been better off just estimating.

Now, it doesn't always work that you come up with a reasonable estimate and there's reasons in the divorce process you might want to estimate too high or too low, but if it gets you to a reasonable point. And my whole goal with everyone's divorce is to get this done as quickly as possible in good enough shape and as reasonable as possible. And if you can do this reasonably, and it's an ethical guess, I always say we don't want to screw anyone, but if the estimate is reasonable and your both willing to agree to the separate property estimate, that is the easy solution. But that doesn't work in all cases. And oftentimes, this is very complicated in terms of tracing assets, as are many issues in divorce. Now the other question is... So, part one is just gathering the documentation, while part two is getting the information and how do you get someone to analyze the information that you may be looking at.

And that's with the help of a financial expert. And so, most attorneys have good relationships with financial experts, particularly good attorneys will certainly have a good relationship with a financial expert. And it's usually someone who is a CPA or a forensic accountant and their job is to trace assets. Their job is to figure out where money came from and where it went and what value is there to be split for the purpose of the divorce. And the first thing they're going to ask for is come up with whatever documentation you have. Sometimes when looking at the documentation, they might have to make some estimates of their own. They might say, well, the account grew at X amount. We don't think there were any deposits or withdrawals. The market went up this amount. So, we think that 70% of this portion of this account is marital and only 30% is separate.

Or they might go the other way around. But the point is a financial expert is there to try and make the best estimate or best guess or use their expertise to figure out precisely in some cases how much, what assets are available. And the other thing... When you come with a financial expert, one of the things I always say is if you can get a neutral financial expert to do the tracing that both lawyers and both of you as clients agree upon and people divorcing agree upon, then almost always you should go with the neutral. But if your spouse, for example, hires a financial expert and they spend $5,000 or $10,000 or $30,000 or $50,000 looking at these records or more in some cases, but if they go through this process of looking at the records and the details and everything else, I always say this. If your spouse is writing a check to someone and they're working for your spouse, how do you think the conclusions going to look?

Most of the time, the vast majority of the time, the conclusion they're going to come up with is going to be in your spouse's favor. And so, if that's the case, you're going to likely want your own financial expert to analyze things as well and come up with their conclusion. I'm willing to bet that that conclusion will be more akin to what you are looking for on your side. All of that said is if we have two financial experts on a top of two divorce attorneys on top of any other number of people that get involved in the divorce process, it becomes very expensive.

One last section I want to cover when it comes to tracing is that tracing is not an all or nothing proposition. It's not the case that something is often 100% marital or 100% separate. Sometimes, an account that may be mostly separate still may have marital portions to it. And the episode after this is going to be on how do you keep separate property separate and also basically the ways to figure out if separate property indeed has marital components as well to it, so it'll help both sides depending upon what issue you're facing. But one of the things that could happen, and let's just say you got... Let me use very, very simple math. Let's say you got an inheritance of $100 and you put it in your separate account. And that was 10 years ago. Well over time, that $100 grew to $110 because you were getting interest or maybe dividends or whatever the case from that $100 account.

Well, it could be the case that $10 of income is actually marital property, but the original $100 is still separate property. And what you'd have to figure out is, well, how much did you actually get and how much income came in? And so, it's another layer of complication that even though tracing sometimes could mean an asset is 100% separate. Sometimes it can mean it's 100% marital, but other times it could be a gray area. And you need to be prepared for the gray area and understand the nuances and the complexities of the gray area, is yet another thing that you may be thinking about in the divorce process.

The point is it's complicated. You have to get your documentation. You need an expert to help you interpret the information and go through the information and provide an expert opinion that you could use during negotiations or in court if it comes to that. But you need to really understand, or I want to introduce you to this topic, because it's something that's very relevant in many of the coaching calls. And I want you to be informed and have some things to think about as you consider what assets you're actually going to be splitting as part of the divorce process.

0208: How To Finalize Your Divorce Before Year End (Even If You Haven't Filed Yet!) Sep 12, 2019

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Shawn Leamon: As I record this episode, there are about four months left in the year, and you may be at a time crunch trying to wrap things up before year end. I want to give you some tips on how you might be able to do that, regardless of where you are in the divorce process. Some of you might not have even filed, I've talked to a few of you who are thinking about filing and wanting things wrapped up by year end, and others of you are preparing for settlement negotiations and other things so that you can have it in before the end of the year is out. Of course, there's many reasons to want the divorce to be finalized as the year wraps up. The main reason, of course, just being sanity sake. You get to start the new year a fresh, you get this divorce process behind you, and it gets put into the rear view mirror.

Shawn Leamon: There are practical and family considerations. Sometimes it might have to do with something like getting a new place, or a new home, or credit reasons as you think about moving. There are tax considerations, such as if you get divorced by December 31st of this year, it means you're divorced for the whole year, so for 2019 you get to file taxes as a single person or whatever status you reflect or choose, which may be beneficial for you for a variety of reasons. That's something to think about. But the point is is that you're trying to get this wrapped up before the next year starts.

Shawn Leamon: Now, the big challenge is is that where in September as I record this, there's only three and a half months or so before the year is up, and that is not a lot of time. Just for understanding sake, is that divorce under normal circumstances takes one to two years on average. It by nature is a very slow process, and trying to wrap up and rush the divorce in the span of a few months will not always work. But if you've been at the process for a little bit of time, there may be some opportunities to button it up, close it up, and move on in an efficient manner.

Shawn Leamon: Just something to note if you haven't filed for divorce yet. Almost every state, well I should say every state, I think has a cooling off period for divorce. What does that mean? It means from the date that you file, it doesn't mean that you can have your divorce granted until a certain amount of time has passed. On the short end, states have a 30 to 60 day cooling off period before you can get divorced. You have to look at your state to figure out what the rules are.

Shawn Leamon: On the longer end, some states mandate that you are separated for up to a year or more before they allow a divorce to be granted, so there are very different rules in terms of the cooling off period for divorce. You need to figure out what the rules are in your state. It may be the case that if you haven't filed yet, you need to file first thing so that you can at least get that clock ticking. And so if you have to wait 60 days or 90 days, you'll be able to get that divorce through, even if you take the time in between to figure out all the details. Just something to note and figure out the laws in your state, to get that time clock ticking, or if it is as long as a year, so be it, it is the the nature of things, but you'll need to know that for next year so that you're not dragging it out an extra a year's time anyway. Be aware of that and plan in advance or plan quickly.

Shawn Leamon: Now, the main thing that comes up when you are trying to wrap up a divorce quickly is the negotiation time. One of the things that people don't think about or don't realize is that you can negotiate much of the divorce up front, and you could in theory have the divorce settlement attached to the divorce filing, and then you're just waiting for the time to click off and you're on your way. One of the things I encourage, or at least worth thinking about, if your situation permits it, and that's always an if, is that you can negotiate a lot in advance before you file.

Shawn Leamon: Oftentimes, you can work with your spouse, I know that might not sound like the most appealing option, but they call it the kitchen table divorce settlement, where you and your spouse sit around the kitchen table, you look at all your assets and debts, you divvy them up to something that looks fair and say, "Hey, we're going to take this agreement to an attorney, have the attorney draft it up, and then we're more or less done." That is the best case scenario, and I work with a lot of people like you who might be going through that process, and my job is merely just to check over and make sure nothing's missing and everything looks fair, but that is a way to file and complete the divorce efficiently.

Shawn Leamon: Now, there is another option which is the middle ground. As I said, if you have a cooling off or if you haven't filled out the cooling off period, you can say like, "Hey, I'm going to file for divorce now and let's take the next 60 days to come up with our negotiation, do our discovery as best we can, and come up with that settlement, and just put a rush on the process." I mean the parts of the process that are slow is if you wait for the deadlines to do everything. You and your spouse and your attorneys can work out things quickly if you're willing to work out things quickly and if you're willing to be open with each other in terms of what exists in the discovery process doesn't take forever.

Shawn Leamon: One of the largest or most complex parts of the divorce process is just figuring out what you own and what you owe, and if you are upfront about what you own and what you owe, you can come to a negotiation really in the span of a couple of days if you work at it and put your time, attention, and focus on it and negotiations. There's plenty of times, even in some of the most complex situations where, and I haven't talked about some of these examples in awhile, but you know you might go to a two day mediation, you might go away for a weekend and do a mediation, or you might spend two or three days or a day just mediating all the issues in your divorce. And you can, once you know what you're dealing with, it's very realistic to expect things can be done in a day.

Shawn Leamon: The big problem is that scheduling can have conflicts. There's life conflicts. There's work. Oftentimes if you're not forthcoming about what exists, and what your assets are, and if you have to track down a bunch of things, it slows down and delays the process and you may as well just plan for the next year.

Shawn Leamon: Also, if one of the parties is just not cooperating or is being unreasonable, that can also hinder the divorce process and mean you have to go to settlement conferences, and court dates and temporary orders, and this and that, and your next court date if you file today might not be for 90 days, just because the court has enough on its plate and it's backed up, and you're automatically into the next year if that's the case and that's the way it's going to go. But that said is if you can, even in bad situations, and I see it all the time, and for better for worse, I have to deal with the tougher divorces almost all the time, that time pressure of the end of the year can really motivate someone to want to get things done and wrapped up and settled quickly.

Shawn Leamon: Now, the word of caution when it comes to rushing your divorce is make sure the decisions you're making are still the right ones. One of my favorite phrases is penny wise, pound foolish, meaning you're trying to save a few pennies but you're losing a few pounds, and when I say pounds it's, I think it's a British phrase, so I mean British pounds. I could be making that up and I could be wrong about that statement. But when they say pound foolish, they mean try not save a few pennies and lose many, many dollars by trying to save a few pennies. The point of that being is if you are rushing the divorce and you end up with a much worse settlement, maybe it's not worth rushing the divorce process. But if you can end up in a reasonable place with the divorce, you can start to get that done and get things wrapped up by the end of the year.

Shawn Leamon: Now, one other thing I want to make sure that you're aware of as you think about your timeline and how you may want the end of the year to play out as it pertains to your divorce. Just because you come to a settlement on December 31st doesn't mean the court has signed off on it on December 31st, and so you may end up still with the divorce bleeding over into the next year. One of the things I'm doing, you think about that is get your settlement in as soon as possible so the court can sign off on it. One of the things I've seen, and this is something that you need to contact an attorney about to figure out how your local courts work. In some courts around the country, they understand that people want to be divorced as of the end of the year.

Shawn Leamon: Happens is you might submit your divorce settlement on December 22nd, but in some places the courts are closed Christmas through New Years, and so you're in this weird position where you filed your paperwork but it's not signed off, and you're like, "Well, why did we rush to sign the paperwork?" Well, some courts actually have a solution for that. Not all courts. I don't know how your local court is actually going to work, and I would contact an attorney to figure this out, but if you get that paperwork in towards the end of the month in December and the court hasn't signed off on it, I do know some courts that will backdate your paperwork for you.

Shawn Leamon: They might have a month or two of work just on their docket and they can't get to it, and so what they'll say is, "Hey, you've got your paperwork in by the deadline, even though even though the judge hasn't looked at this order until February 22nd of the next year." The judge will say, "Hey, you got the documents in on time. From a legal perspective, you are divorced as of the end of the previous year. All is well, even though I didn't sign off on it until it's later." So they'll do the backdating for you and make sure that you don't get screwed just because they have a lot of work on their plate.

Shawn Leamon: Something to think about and something to ask a local attorney to figure out how the courts work in your system. But regardless of what it is, now is the time to really be thinking about, I don't want to say rushing, but really being speedy about this divorce process and not delaying if you want it over this year. If you don't, there's no reason to rush and you might as well take your time, but for peace of mind's sake for some, for tax reasons, practical reasons, moving on for others, if you want to move to a new state, get a new job, whatever the case may be, having this divorce finalized by year end can be the lifting of a big burden off your back for many. Something to think about as we're in September here, and I just want to make sure that you're aware that the clock is ticking.

0207: How Life Insurance Works in Divorce Aug 25, 2019

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One of the questions that comes up often that is a source of confusion, is how does life insurance work during the divorce process and actually afterwards. I want to take some time and clarify how it could work and how it might apply to you. I'm going to start with how it works during the divorce process. Then also talk about the role after the divorce process because it's not always intuitive and it's usually not what people think. The first element is, during divorce the question that people ask, is life insurance something that's split or how does that work? Does it have value? Generally speaking, it depends on what kind of life insurance policy you have. Most life insurance policies, not all, but most life insurance policies are what's called term life insurance, which is a policy that exists for a certain term or certain number of years.

You buy this life insurance policy. It may be for 20 years and you pay a monthly amount and if you were to pass away during that time, then that life insurance policy pays out. But after that time frame passes, that money goes away and you don't get it back and that life insurance policy doesn't have any value. Conversely, some life insurance policies are called whole life policies which are just that. There are many complications and variations within them, but they cover your whole life. They don't have a term, they don't have an ending date. What's important about whole life policies is that oftentimes whole life policies build up what's called a cash value. That cash value is the case or the place where when you build up that policy, there is some value to it that you can cash out or borrow against or sell the policy for, that has value associated with it.

The real goal is, is to figure out, well what type of life insurance policy do you have and does it have any value. Now, term policies generally speaking, have zero value to them. If you're thinking about your financial information or you're splitting up your assets or whatever, oftentimes you'll see the life insurance policy and you'll put the value. You'll need to list that you have the life insurance policy, but the value on it might be zero. So there's nothing to discuss or at least to split when it comes to the policy itself. That's most common with term policies and, just as an aside, is the reason that term policies are so common, is because they don't have a value at the end, they tend to be cheaper. Term policies tend to be less expensive for people then the whole life policies and just more common and simpler.

I just see them a lot more often and I think they're more popular than the whole life policies. It's just something you should be aware of but nothing to worry about there. Just want to make sure that you understand why it doesn't have any value in why it's so common. Then also if you have a whole life policy. So the question I'll ask is if you have a whole life policy and you're trying to split things during divorce, my question to you will be, well, what is that policy worth? What's the cash value on that policy? If there is a cash value to the policy, then that is an asset that needs to be split and needs to be discussed. Usually you don't physically split a life insurance policy, but the person who owns it, that goes on their side of the ledger and then the person who doesn't own that life insurance policy gets their share of the value from it, usually from some other asset.

Rarely do you actually take the cash out from the life insurance policy. It is an option and there's lots of intricacies and complications to it, but we're not gonna go through it cause it's just so minute and varies so often. But it is an asset, no different than a retirement account or a bank account or a valuable or collectible or whatever is. It has value and therefore it is something whose value you need to determine who's going to keep and what someone else is going to get in exchange for that life insurance policy. Now, the other side of the equation is after divorce, how does life insurance work? It's something that's interesting because oftentimes I'll hear from you, you'll say like, "Hey, my spouse is requiring me to get a life insurance policy. Does that make sense? Why am I getting a life insurance policy that my spouse owns or my spouse is the beneficiary of or whatever?".

Some cases, I'll tell you also like, "Hey, you should require that your spouse gets a life insurance policy", or I should say soon to be ex-spouse, "gets a life insurance policy because it can be effective for you." Here is the scenario. Why does that matter? Well, what matters is that if there are ongoing support payments, and they could be alimony/spousal support or they could be child support payments. If they're ongoing payments, then you may want to have an insurance arrangement ... I also include disability insurance. We're just talking life insurance for the moment ... to secure the spousal support or the child support payments. What do I mean? Well, I'm going to give you a very common scenario and I'm gonna try and keep the math very simple so you understand, and I can illustrate the point very clearly for you.

Let's just say you and your spouse have come to a settlement and your spouse owes you $1,000 a month in support ... Doesn't really matter what kind of support ... over five years. So $1,000 a month over five years. So after one year, that's $12,000 of support. In five years that's $60,000 total support that you're going to be owed. Well, what happens if your spouse were to pass away during that time? Well, if that were the case and you didn't have any kind of insurance, you would just be out of money. You would just stop getting those payments and you would have no way to get those funds that you were owed. Or, at least, it would be very difficult to get those funds that you are owed because there was no insurance set up that you owned and that could be devastating to your life.

Now, I use the example of 1,000 a month, but sometimes it's 3,000 a month or 5,000 a month or whatever the case may be or more. If you don't have life insurance to cover that, that can cause real harm to you if the unforeseen were to happen. Now, the element or what you would do is, so you have $1,000 a month for five years, so $60,000 of support payments coming in. What you would say is, "Hey, spouse, you need to get a life insurance policy with a total amount of $60,000 of coverage so if something were to happen to you, some unfortunate circumstance would happen to you, that I, the person receiving support, am not left out in the dust and finding myself broke all of a sudden because of your passing." If that person did pass away, you would get a check for $60,000 which would cover all of your support payments that are outstanding.

Or to take it another direction, if you're the person paying the support, someone may request of you to get a life insurance policy for all the outstanding support payments just to make sure that if something were to happen, that those support payments don't just disappear, but that person receives the support that you had agreed to. Now, it gets a little bit more complicated because there are a couple things that we have to think about. One is, who owns the policy and two is, can we adjust that policy down the line? What do I mean? Well, the first is who owns the policy. One of the things that's very tricky is if one person is the owner of a life insurance policy. You can't just call up the life insurance firm after your divorce and say, "Hey, does my ex-spouse still have that life insurance policy?"

No. And that ex-spouse might say, "Hey, I don't feel like paying for this policy anymore" and just stop paying it. If the worst case scenario were to happen, then you'd be in a position where they stop paying for the policy so the policy lapses. If they were to pass away, you don't get any money. One of the things that people write into the agreement is either the spouse receiving the policy is the owner or there's some sort of verification so that you can check in at least once a year, but usually more often than that, to make sure that the life insurance policy is still current and it is acceptable and everything is going on. The spouse that has the policy is required to provide verification anytime it's requested, at least annually, just to make sure that nothing goes missing.

Now, if you're the person paying the policy, if you're the one who's like, "Well, I'm already paying all the support and I have to pay for a policy on top of that, that doesn't seem fair to me." And I understand the concern. I'm not gonna make a judgment one way if it's right or wrong. My job is just to help people set up their financial picture in the best way possible. One of the things I would suggest, particularly if you're concerned about that, is to reduce the life insurance policy amount every year. What does that mean? Well, one of the ways to reduce your life insurance bill, and makes plenty of sense for me and whenever you see the scenarios is, let's go back to our scenario of $1,000 a month for five years. That's $60,000 total. Let's just keep the math very simple.

Let's just say one year has passed. Then there's only $48,000 cause you're paying 12,000 a year. One year has passed. There's four years of support left at $1,000 a month. That's 12,000 a year times four years or $48,000 of support payments are outstanding. But you took out a life insurance policy for $60,000. What you could do is say, "Hey, every year I'm going to reduce my life insurance policy amount by the amount of support that's outstanding." So instead of carrying $60,000 of life insurance, after one year you only have to carry 48,000. Then the next year you only have to carry 36,000 and then the next year 24, the next year 12 and then you're done. The reason you would do that is the lower the amount of life insurance coverage that you have, the cheaper your monthly premiums are going to be.

I see something very often, or at least I encourage people who have enough foresight to think about this kind of thing, is to say, "Hey, here's a way that we can reduce your burden", and there's no reason if you're the ex-spouse who's receiving support, you would have any issue with them declining the coverage or reducing the amount of coverage by the total outstanding support amount, because you still one way or another are going to get all the money that you had agreed upon. Now, it does potentially get complicated and it's something you have to stay on top of and you have to do the calculations, but it's certainly something that you can write into the divorce decree. It's something that you can negotiate in advance and there's no issue, no reason, that you shouldn't be able to reduce the amount of life insurance that you have for the outstanding support each year.

Another thing that I bring up, and this one is sensitive to state laws and also who's very savvy, and that is who's paying for the life insurance policy. Sometimes I'll say, ‘Hey,’ depending upon who's asking and what the scenario is and what the individual circumstances are. If one person wants a life insurance policy, the other person doesn't, or if it doesn't come up, you can split the cost. Split the cost of the premiums so that you're both sharing in it and it's something that you can, so you'll know exactly that it's getting paid every month, you're both sharing it and it doesn't feel like an unnecessary burden to either party.

The after-divorce scenario has a lot more moving parts to it, but I just went through them quickly so that you can understand what types of things that you should be thinking about when it comes to life insurance. A quick summary. During divorce, whole life policies generally have a cash value in which case you will need to split that and that's an important asset. Term policies generally don't have any value to them and therefore, although you need to declare them or disclose them, they don't really have a value that you split. Then after divorce, life insurance is often times used to secure a settlement for the outstanding support payments. If the unforeseen were to happen, the person who has potentially many years of support still supposed to be coming to them, that support is not interrupted by a spouse's passing.

One last minor point to that, because I went through a lot of very moving parts on that quickly. The other moving part is if you're really savvy and you really want to push for it, you can also get disability insurance as well for that same scenario of after divorce. Not just what if one spouse passes away, but what if that one spouse becomes disabled and still owes you a bunch of spousal support payments? You can't necessarily expect them to be able to pay for your life if they're disabled and can't work. Disability insurance is another way, very similar to life insurance in terms of the mechanics, that you could set that up for your future and protect yourself if there are outstanding support payments.

0206: Married Filing Jointly or Married Filing Separately? Aug 05, 2019

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As anyone who listens to the show regularly knows, there's a lot of different moving parts to be thinking about as you go through the divorce process. Sometimes there are some things that are less obvious that you may want to consider as you are filing for divorce, living your life and just doing some of the normal financial things that you should be doing. One of the questions that comes up, only on occasion, but it's a very important question when it does arise is while you're going through the divorce process, is it better to file your taxes as married filing jointly or married filing separately? While you are still married, you have those two options as a status to elect when you file your taxes. It can be an important question. I'll get into the reasons some of you might consider filing separately in a moment.

But historically, most couples file married filing jointly for as long as they can. What that means is that you file one tax return for the two of you and both of you are supposed to sign it independently. The reason you filed jointly as one tax return is for two main reasons. One is that you get the maximum amount of deductions as part of your tax return, meaning, in general, you pay less in taxes at the end of the year. The second reason is it's much simpler for couples usually just to have one single tax return. It means you're only paying one accountant to prepare one return instead of maybe two accountants to prepare two returns or whatever the case may be. You’re probably accustomed to using married filing jointly, but when the divorce process arises or if you're thinking about separation, there are times where it makes a lot of sense to file your taxes as married filing separately.

I'm going to go through quickly some reasons to do this. At the end of the day, ultimately everyone's situation is different. The best way to figure out how you should file your taxes is to work with an accountant to figure out what exactly makes the most sense given your specific situations, but let's think about... And you should always be aware of your options in the divorce process even if you don't ultimately choose it. So why might someone choose married filing separately? Well, there's actually a scenario. The first thing is that you could actually save on taxes if you are filing married filing separately. If you're filing separately, I'll just say to simplify the phrase. If you're the person in the relationship who has a lower a set of income or no income at all, you might end up saving actually overall on your tax bill. And conversely, if you're the higher income earner and you file separately, then you're likely going to have a much higher tax bill than if you filed jointly. That's just the way the tax rules are written. That's the first thing to be aware of.

The second is something that comes up very frequently, particularly when it comes to divorce. That is, you want to minimize your liability when it comes to what your spouse does on the tax return. Why might someone want to minimize their liability? Well, I speak to many scenarios where one spouse is, I'll just say, doing something suspicious or you suspect a spouse of doing something suspicious with their tax returns. It could mean... Scenarios include they could have a cash business and they're not reporting all of their income and you're worried that they may get audited and that would come back and affect you because you're under-reporting and underpaying your taxes.

It could mean that you just don't trust them that they're doing the right thing in their tax bill or they're misstating something and you don't want to be connected to them. You might not know what it is, but you don't want to be connected to them for the future and risk the tax man coming back after you later down the line. There are other things to think about when it comes to liability, but the point is, is you don't want... You are just very uncomfortable keeping yourself attached to your spouse when it comes to filing taxes and what they may be doing on their tax return because you might not see their income. You might not be able to verify what exactly they're doing. And for you, it might be worth the extra cost or extra expense to separate your finances from them in that regard.

Now, there's a third category of reasons you might want to file separately, which I'm just going to call the other category. Some of these are technical or very specific and I can't get into all the details in this episode without boring you, but there are things I want to bring up so that you know that there are other scenarios in which you might want to file separately. Something like... Depending upon your tax situations, there are certain deductions, itemized deductions, that are limited by what's called your adjusted gross income. When you have two incomes or dual income or joint income, that might... you might not be eligible for those deductions later. But if you're a single person or I should say filing separately, then you might actually benefit from a tax perspective from that. There's a student loan question is sometimes student loans have repayment plans that are based on a person's income. When you have a joint income, your repayment plan might be a lot... might be more accelerated because your income levels higher. However, if you're filing taxes separately then your income is lower.

Another potential reason is for state taxes. Sometimes in some states, particularly in some community property states... If you don't know what that is, you should look up the term community property, but some community property states have benefits for filing separately. It's something for you just to think about. The main three reasons though, one is to potentially save on taxes. Two is to limit your liability for a spouse who may be cheating on their taxes. And the third is there are just some other reasons you may want to consider when it comes to your taxes. But here's the deal, I just want to give you that nugget because taxes are a super complicated area, but it's something that you should be thinking about and be aware of and have in your head is, "Hey, what's right for me this year? What's right for me next year?"

One last thing to bring up when it comes for timing and something for you to think about. If you get divorced on January 1st of 2019, you're considered divorced for the entire year. Conversely, if you get divorced on December 31st of 2019, you're also considered divorced for the entirety of the year and so you won't have the married election to choose from. However, if you get divorced on January 1st of 2020 you are considered married for all of 2019, which you were, and therefore you're going to have one more year of tax filing where you have to think about. Sometime in 2020 you're going to be filing your taxes for 2019, hopefully, and that's when the status is going to come into play in terms of what you need to be thinking about. Something to consider. Something for you to think about as you plan during the divorce process.

But the main thing is, is you need to get your own accountant during divorce. You need to, if you haven't before, talk to an accountant. Talk to someone who is not your marital accountant. If you don't trust that person or you're not... don't have a relationship with that person, at least for the year you're getting divorced and the year after, it's very wise to get some accounting help. Someone who can help you walk through and educate yourself, even if you just spend.

0205: Understand Every Word of Your Legal Documents Jul 11, 2019

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As you go through the divorce process, one of the most important things that you can do that's easy to overlook is really understanding all of your legal documentation and reading it. Even though most of you going through divorce aren't lawyers, you should be able to read and understand the legal documents that are getting passed back and forth and that ultimately you'll sign as part of a settlement or if you got a temporary order from the court or whatever the case may be needs to, you need to read every word and you need to understand it. One of the things that I want to talk about in this episode is what kind of things you should be looking for as you try and read and understand and go through all of the legal elements of this divorce process.

Just one important note to remind you or as a reminder is on the divorceandyourmoney.com/coaching page, we have a call that you can schedule that is a document review call. It starts with, you send the documents in advance by email after you book the call, or we can arrange a method to transfer them, and then I will go through and read all of the key documentation, be it a settlement agreement or financial affidavits or whatever else, and then we discuss points of change and other things to highlight as part of that call.

In this episode, though, I want to go through three things that you should be doing as you go through the legal paperwork and the documentation in your divorce. The three things are, first, is to understand every word and sentence. Second is think about the what-ifs. Third is do what I call a sanity check, which is what does this mean to someone 10 years in the future?

I'm going to go through each one of these points and talk about them just a little bit for you. The first step in the process is to understand every word and sentence in your legal paperwork. I'm going to use the example of a settlement agreement because that's the one that also usually has the most text to it. It also has a lot of moving parts and the most subtleties when it comes to understanding the words that are in your documentation. I want to use that just for the sake of example throughout this episode is a potential settlement agreement that you're about to sign or you're thinking about signing, or you're in the process of negotiating and you're thinking about.

When I say understand every word and sentence, it means you need to go through literally every word and sentence and make sure that you understand exactly what it is saying. What I do with documents is I get my highlighter out, I get some multicolor pens, I go to a quiet place, and I sit and study the documents. I go sentence by sentence to make sure that everything seems alright to me.

Whenever a sentence sticks out, I give it a highlight. If... Sometimes, I'll just summarize each paragraph just in the notes of a page to make sure that not only did the words make sense, but I'm comprehending exactly what is being said in a particular sentence. Sometimes, I'll get to a sentence that, or a paragraph that doesn't totally make sense to me.

Sometimes, it just feels a little fuzzy. Might not be incorrect. I'm just not 100% sure, and I'll highlight and say, "Hey," and then I'll go back to either a lawyer or to you or if I'm talking with you is like, "Hey, what was the intention with this sentence or this paragraph? I don't totally get it," in which case there might be a perfectly reasonable explanation, and other times, they'll say, "Hey, we need to rewrite this paragraph to make it clearer just so everyone understands that we're all on the same page," but you should be doing that as well is you need to go by sentence by sentence to say, really, one of the main questions you should be asking is, is this is what I intended, does this make sense, is this clear, is there any ambiguity because we don't want to have any ambiguity in the documentation.

I had a case just recently where someone was doing a calculation for their retirement account. They put the formula that they were going to use for the retirement account in there, or pension plan, I should say, the formula they were going to use, but they didn't actually put the numbers specific to the formula. They said it was going to be a certain percentage over a certain number of years, and that's the formula we're going to use, to which I said, "Hey, let's go back to the attorneys, and let's actually just write in... you can say, 'Let's include the formula,' but we also need to include the exact numbers that we're using as part of this formula to determine the payout just to add some clarification to the document."

But anything that's unclear to you needs to be fixed, or if it makes you feel fuzzy or just doesn't quite match what you thought you were agreeing to, you should be looking at those with a fine-tooth comb and reviewing those.

The second thing to think about is what I call the what-ifs. You need to be thinking about all of the what-ifs. Divorce settlements are some of the most complicated in the legal world because in a divorce settlement, you have to try and think about all the different possibilities that may happen in the future. That's not an easy thing to do, but you need to think about those particular possibilities.

I'll give you one with the kids. If you have children, well, what if one spouse moves to a different county or is planning on moving to a different county that's an hour away instead of 10 minute away, or that's two hours away instead of 10 minutes away, or what if one child has a disability? How do you plan on handling that and paying for those usually additional expenses, be it tutors or medical things or whatever else.

Should a spouse be allowed to move away, and how would that affect the custody issues? Custody is a complex area, but it's easy to illustrate some of the what-if scenarios. What if a spouse, if we're talking about alimony or thinking about alimony, what if a spouse starts making double the income? What does that mean for the potential alimony or spousal support payments? What if a spouse loses the income? What does that mean to alimony and spouse support payment? Should things be modifiable or non-modifiable?

There are lots of things to think about when it comes to spousal support, or I'm sorry, when it comes to what-if scenarios, including spousal support or child support or just any number of things that life can present when it comes to the divorce process. One of the things you should be thinking about as you go through and craft a settlement agreement is for each particular topic, you should really be thinking about the what-ifs. What if this happens in one's life? It might not be next month, but it might be two years down the life. Is our agreement set up in a way that it's easy to handle and we have a process in place?

Another common thing that pops up is what if someone loses their job or what if a child gets ill? Let's just say there's an emergency, and you have to take a child to a hospital. Who's going to make those decisions real-time when there's an emergency? Those medical decisions that are all important and they're time-sensitive, how is that handled?

Those are examples of what-ifs that you should be thinking about in your divorce process, and in your life, as you read the settlement agreement, well, what if this happens, what if that happens? Look, like if complicated. You're not going to be able to cover every potential what-if scenario; however, anytime I'm looking at a settlement agreement, you gotta make sure the most-likely what-ifs are covered and how that might look. Usually, usually, a good attorney has those what-if scenarios or many of those what-if scenarios already covered in an agreement.

Oh, I'll give you one that is a popular one that I see less often than I should, but it's very important. Let's just say one spouse is paying spousal support, and the other spouse receiving spousal support, of course. Let's just say the spouse receiving spousal support remarries. Well, almost all the time in every state, just about, if someone remarries, then that spousal support is expected to end.

But what if that person doesn't remarry but chooses to live with someone for the next decade? Should that spousal support end? Many times, I would say yes, but the point is, is that needs to be written in the agreement in how you determine what the conditions are for the ending or termination of spousal support. To be fair to both parties is very important in your settlement documentation, and that's a what-if that people should be thinking about.

Now, the third thing to consider is what I call the sanity check. The sanity check is very important because... What is it? The sanity check that I like to call it is also just kind of, let's think about this in the future. Let's just say that five years from now, some random person who has no involvement in the divorce reads your documentation and has to make a ruling on it and say that, "Oh, well, you agreed to this. Does this make sense, or is this the way that you intended things to happen, and does it make sense for what's actually written in the document?"

Now, what did I mean by that? That was a little bit of a convoluted explanation. What I mean is, is oftentimes, and this is one of the most important things I want you to keep in mind, oftentimes, when you have a lot of context, when you have a lot of "your life" involved in the divorce documentation, you intuitively understand supposed to or at least you think you intuitively understand supposed to happen as part of this divorce agreement given that everything's fresh.

But what if a few years down the line, going back to that what-if, what if there's a dispute, and one spouse wants to take the other spouse back to court or back to the lawyer's office and say, "Hey, this issue isn't being upheld correctly," or, "It's not being handled properly," or, "I want to modify this particular clause." Well, 10 years from now, if someone's reading this documentation, or five years from now if someone's reading this documentation, is it very clear as to what exactly you agreed upon, and would it make sense to someone who has no context other than just the legal documentation?

I'll give you a case that happened to one of my clients I've worked with for several years both during and after their divorce is their spouse, or ex-spouse, I should say, did not make any kind of, the ex-spouse had, for several years, not been making a specific payment that he was supposed to be making. This payment was a monthly payment that he just never made. It was... and after several years actually owed my client quite a bit of money.

Now, the good news was we went back to the documentation. We looked at it, and we looked at the exact wording, and it was very clearly spelled out and exactly what was supposed to happen. We went to the bank statements. We gathered up the receipts, and said, "Hey, ex-spouse, you owe us many thousands of dollars because we haven't gotten this payment you had supposed to have been making," excuse me. We were able to get that resolved.

But other times I'll look at documentation where someone calls, and I'll read the documentation, and I'll say, "I'm sorry. I get what you're missing, and I understand what you're saying, but the legal documents that you signed, that you and your spouse signed don't quite say that. It's hard for me to understand what exactly is supposed to happen here in terms of how this all works and what you're expecting to happen. I get that it doesn't match what you agreed upon, but you signed this paperwork that said this, and now you're trying to challenge it." It's going to be hard to prove later down the line.

The point being is for every part of the divorce settlement that you read, make sure it's clear, and make sure to be clear to someone who knows nothing about your case many years in the future so if there's a dispute or if something arises, the solution, so to speak, is already in the divorce paperwork, and it's very clear for everyone who is involved.

Those are the three things when it comes to understanding your documents. The first thing is, one is review and understand every word and sentence in your documentation. The second is think about the what-ifs, all the potential scenarios that could happen, and try to address as many of the most-likely ones as you can in the divorce paperwork that you're trying to figure out. The third is do your sanity check, is think about this agreement you're about to sign from the perspective of someone who knows nothing about you, or let's just say a judge, 10 years into the future. If there's an issue, will this paperwork still make sense to the person who's not involved in the scenario, and how might think they about the issues that are being presented.

Also, just one last thing, as I said, is one of the most popular things I only recently launched in the past year is a document review session where we can get in-depth in the documentation that you're looking at as part of your divorce. One of the most common things people ask, and honestly, I say divorce isn't, clearly, is not a fun process, but one of the most fun parts for me or one of the most enjoyable parts for me is reviewing the settlement agreements and thinking about the different scenarios and trying to figure out ways that we might be able to make one section better or improve a section or alter a section so that everyone is happy and we can get this down the line and make sure that there's no unclear area. You can book a document session review with me as well. I do many of them every week, and they're one of my most famous, or most favorite, I should say, parts of this process to review as well.

I hope you found this episode helpful, and talk to you soon.

0204: How to Fire Your Attorney Jun 09, 2019

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There may come a point where you need to fire your divorce attorney. And I want to talk about how you do that, what the mechanics are and some things to keep in mind. Now before you fire your divorce attorney, that's what we call a last step in the process. Not the first thing that you need to do. It might be something, if your relationship with your attorney is not going well there are many ways to repair it or to make your comments known and just to give you a heads up I have about seven or eight podcast episodes on how to manage and get the most out of your attorney relationship in the Quick Star Guide and that's just in the Divorce and Your Money store.

You can get a lot of great information that will save you hundreds if not thousands of dollars just from that section on managing your relationship with your divorce attorney but one of the things I want to cover in this particular episode is the mechanics of, "All right, you've had enough. Your attorney's relationship just isn't working out." And what do you do? How do you communicate that? How do you change attorneys? How does that process work and what are the things that you need to keep in mind as you consider changing attorneys?

It can be a challenging thing to do and there are some elements to consider. Now, one thing I'll just tell you is don't feel as if you failed because you picked an attorney that did not work out for you. Choosing an attorney is a very very difficult process. There are a lot of complications. It's not easy. You don't always know what you're getting because it's hard to say how that attorney relationship's going to go before you get divorced and it's not always easy to pick the right attorney. And so ... And sometimes you have what is a good attorney but isn't a good attorney for you and your circumstances.

And so when you finally get to that point that your attorney just isn't up to the task for you and the relationship's not going well and you're on that last straw, it maybe time to fire that person. And I want to cover three areas to consider, or three things to think about as you go through the firing process. The first is communicating your concerns, the second is interviewing other attorneys and the third is how to fire the attorney and what the mechanics of that are.

Let's start with the first point which is, communicating your concerns with an attorney. One of the toughest parts with the attorney is that you have to communicate what is going on and if you are unhappy for a particular reason, you need to communicate the reasons for your unhappiness with the attorney's job. Sometimes, or most of often, almost the same way it is in a relationship is that the biggest issue of the attorney or with the attorney is in the communication area. And your communication with that person just is not where it needs to be.

And so you might not know what's going on with your case, your attorney might not reply to your emails in a timely fashion, maybe they don't seem prepared or know what's going on in your case and maybe their paralegals are not being responsive. Whatever the concerns maybe you need to start by outlining those and communicating your unhappiness or frustration with the job that the attorney is doing. And maybe they might say, "Oh, sorry, let me work on this thing," and you give them a month or a few weeks and they improve substantially. Because they might not know that they have a problem with customer service.

Many times lawyers are good at the law but terrible at running a business and they're not as adept at things like customer service and communication even though it's very important to you. Other times, and one of my unfortunately favorite sayings is, "A bad attorney doesn't become better just because you keep paying them." And so sometimes you're going to be in a position where just that attorney is not working out and you have to, despite your communication attempts, it's just not going well. And so I wouldn't expect because you pay them an extra $5,000 or an extra $10,000 or an extra $50,000 that they're going to magically become better for you and better for your case.

And so, what to do then is it's time to move to the next step, which is step number two, is that is interviewing other attorneys. Now, I have lots of episodes, both free and in the Quick Stuart Guide on how to select an attorney, both the first time and the second time around. And ways to minimize the chance you end up with a bad attorney. There's a lot of different tips in there for you to think about but one of the things I want to cover is that before you fire or consider firing your attorney you need to have somewhere else to go. It's as simple as that is you need to interview, I suggest at least two, sometimes three other attorneys. Go meet for initial consultations. Meet for even a follow up consultation. Sometimes they'll be free, sometimes there's a charge involved, but this is your life and your divorce and so you need to figure out who the best alternative might be for you.

And I would not encourage you to fire your attorney until you know where you're going to go. Firing an attorney without having a back up option in place is similar to leaving a job without knowing what your next job is to be that you have lined up. If you're working and you have a job and you're like, "I'm frustrated with my job. I want to quit," well, and you quit and you don't have a backup option it could take you two or six or a year, six months or a year are even multiple years before you find the next job and that wouldn't have been the smartest decision.

It's the same with your attorney in that you should figure out who you want to represent you before firing that person. Now, let's assume that you've communicated your concerns, it hasn't been alleviated, the relationship between you and your attorney is irreparably broken, you have found your next alternative attorney, now how to you actually fire your existing attorney? This is point number three. And how do you do it?

Well, there's a few ways to do it. And there's a few things that you should be considering. The first is you can give them a call and just say, "Look, I don't think the relationship's working out." It doesn't have to be a complicated call. Just say, "Look, this relationship isn't working out. I've hired Jane Smith or John Smith in my town. I think they're going to be better to represent me going forward. I just want to give you a heads up that I'm going to tell you know, but also I'm going to need my file and unused retainer." What did I just cover in that?

The first is that you said, there's three things I covered. First is that you said, "They're fired." Or I should say four things. First you said, "They're fired and the relationship is over. Stop billing me." The second is that you said, "This is the attorney that I'm going the use." The third thing is that, "Please send my file, all of the documentation, all of the correspondence, all of the backup documents be it credit card statements or tax returns or whatever else to Attorney Jane Smith or John Smith and here is their contact information." And the fourth I said very briefly but you would want to illustrate this is in some cases you can get your unused retainer back.

Now I know some attorneys who don't have, how have nonrefundable retainers but I also know other attorneys who will refund any portion of your retainer that you paid but will, and will transfer that either back to you or will give that money to your next attorney so it's not like you're out hundreds or thousands of dollars in unused legal fees.

Now sometimes I've also seen attorneys find ways to use up that unused retainer but other times you can get a portion of it back. And so I said you should call and do that but also follow up in writing and say, "Look, I'm withdrawing your use as my council. Here's the four things I said on the list." That they're fired, the new attorney, please send all the documents to the new attorney, and to refund any unused retainer and get a final statement, billing statement from them and what that amount is so you know what it is.

And you know it can seem like a scary process. How do you fire your attorney? What's going to happen? Are they going to come after you? Most of the time they will not come after you. Look, changing attorneys happens on a regular basis. It's something that's common. It's something that is not unusual or weird or anything like that. And so you shouldn't worry too much about it in terms of someone being angry or upset with you. It is what it is. You have to be the CEO of your divorce. That's a phrase you'll hear me say many times. And as a CEO sometimes you have to fire employees and your lawyer is someone who works for you and if they're not doing a good enough job, you need to fire them in a professional manner and that be that.

I want you to understand those mechanics. Know that if you need to do it here are some resources to help you and it's not scary. And you just have to do it and take control. I know some people don't like the confrontation with their attorney. They won't go after ... There's nothing like that. Now, there is one point I do want to bring up and that is sometimes you're going to fire an attorney and you're going to have an outstanding bill to them. It might be hundreds of dollars, it might be thousands of dollars. You should pay the outstanding bill.

The last thing that you want is your attorney, and I've been in this situation where someone needs to fire their attorney, there's an outstanding bill. One of a few things happens. One is the attorney doesn't turn over the files until the outstanding bill is paid. That could be something that happens. Or another thing that happens is there's an outstanding bill paid and the attorney sends that bill to collections. Also something else that you don't want to have happen.

Things to think about, things to consider when it comes to an outstanding bill. Make sure you pay that. Just clean up the last little bits. You don't want to be penny wise pound foolish or anger someone inadvertently or have an additional legal proceeding from an outstanding bill. Make sure you pay that. But otherwise, look, it's very simple. Communicate your concerns, interview other attorneys and then follow with my four step process and just four things to communicate to your previous attorney as you fire them.

0203: How to Stop Your Spouse from Wasting Your Marital Money May 29, 2019

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One important topic that comes up on calls is how do I stop my spouse from spending all our money? Now, this question comes in many flavors. It could be frivolous purchases, vacations, money spent on an affair. I've heard people spending hundreds of thousands of dollars on prostitutes. Sometimes there's just a spouse that's terrible with money, and one spouse likes to go shopping, or might even quit their job and just spend a lot more money than they used to all of a sudden as part of the relationship. I've had cases where spouses are sending money to family members for questionable purposes. I've had cases where spouses take money out and invest it into terrible business ideas. I've had people who spent a million dollars or more investing in some latest fad and losing it all. Could be gambling, could be drugs, could be any number of situations as to when a spouse is wasting money, and the question is, well, what do I do about that? Is there any recourse? How do I handle that type of situation? And, like in all things divorce, of course state laws vary on the subject, but I want to provide a few terms for you to think about, and a few things to be aware of if this is a situation that may be affecting you.

I'm going to give you three things to think about. The first is something called dissipation. The second is tracing, and the third is the timing of your divorce. And we're going to go through these things and dig into them a little bit, and maybe these will be helpful for you as you try and figure out, well, what should I do in this situation? Let's start with the first thing, which is dissipation of marital assets. Dissipation of marital assets. I know some of you take notes, and I want to spell out the word dissipation, D-I-S-S-I-P-A-T-I-O-N. Dissipation. I feel like I'm in a spelling bee. And the general idea of dissipation is that one spouse is wasting marital money, and it's not in the normal course of your expenses. For example, if one person wasted $25,000 on an affair with someone. Maybe taking someone on trips or nice meals, or whatever, buying gifts, whatever the case may be, or it could have been any of the examples above. Drugs, gambling, anything.

And in dissipation, what happens is you figure out what was lost, and you can get reimbursement for the funds that one spouse spent. So if your spouse wastes a bunch of money on an affair, you can basically get that money back as part of the split of the divorce process. Now, there's a lot of complications and intricacies related to that, but it's something that you should bring up with your attorney and look up the laws in your state to figure out if it is something that may apply to you. But that's the term that you might be looking for, and people don't always know the terms, so I want to make sure that you know what that is.

The second thing is something called tracing, and tracing is a word that's used, it's a legal term, but the concept is very simple. And tracing is used in many aspects of the divorce process, when it comes to splitting up all of your assets and debts and such. And the idea is to figure out, well is to trace, to figure out, where money came from and where it went, oftentimes. And so tracing comes to prove the flow of funds from one place to another. I was watching an episode of Law and Order, it was on TV, and it was an older episode, and the judge, they had a family law judge on in Law and Order. And one of the characters, this is SVU, Elliot Stabler is in the middle of a divorce, and the family law judge says, "It's my job to figure out who I think is lying less." I wrote that down, as I thought that was a great quote, because it's very relevant when it comes to tracing. The goal of tracing is to figure out, well, one person's going to say the money came from one place, another person's going to say the money came from another place, and the real question is, who's right? And where did that money actually come from?

Much of divorce is he said, she said, and there's three sides to every story, where there's what one person says, what the other person says, and then the truth. And in order to prove wasting funds is that you need to have the evidence of the wasted funds, or be able to trace those issues and assets. And so it could be something like getting credit cards. It could be something like bank statements, could be retirement account withdrawals. But you have to figure out where the money went, and oftentimes it's not easy. Sometimes it can be a very tough process to trace or to follow up on every transaction, everything you're looking for, and it can be an expensive process, too. You might need the help of an accountant or a forensic accountant, and you're going to need to get lots of bank statements and account statements and start to try and put together a picture of where certain marital money went.

And it's not always obvious that something was, let's just say out of the normal course of business for your family, and it could be a challenge. Sometimes it could be five or 10 or 20 thousand dollars just to figure out where assets went, or more. And so you need to think about that as you are wondering about assets. Sometimes, and I'll work with you, and it's a smoking gun case of like, oh, well every time this person visited Miami, that was where the mistress or affair person was located, and it's easy to, Miami wasn't actually a business trip. It was only a play trip, and it's easy to figure out all the transactions that happened in Miami. But most of the time, nine out of 10 times, it's nowhere near that simple, and it's something that you have to figure out. And one of the questions is, how much money is gone and how much will it cost to try and find that money, and on top of that is, after you spent all the money on trying to find it, will it have been worth the time and energy? So that's tracing.

The last thing is not a technical term, but more of something for you to think about as you go through the divorce process, which is the timing of your divorce can be very important and very relevant when it comes to the wasting of marital funds. And what I'm getting at is, normally when you file divorce, it kind of stops any major transactions from happening, financial transactions from happening, between you and your spouse. And so what happens is if you file for divorce, basically you're not supposed to do anything suspicious. You're not supposed to make any big withdrawals, you're not supposed to make any big purchases that are out of the ordinary, you're not supposed to move a bunch of money around different accounts. You're not supposed to do anything that could be considered questionable once the divorce is filed.

But up to that point, I hate to say it, that's kind of fair game. You can kind of do whatever you want. I'm not going to say that you can get away with some of the stuff we talked about before, but it's a lot more of a gray area in terms of what's going on in your divorce. And so one of the things that I talk with you sometimes to consider is if your main concern is stopping a spouse from making a major purchase, or making a big withdrawal, or changing assets on something, then filing for divorce could be a great solution in order to prevent something bad from happening, at least from a financial perspective. Now, I don't ever encourage filing for divorce. I say my hope is that no one ever has to listen to this podcast again, and that would be great. But the reality is, is sometimes it's required, and that's why we're all here, and that's why we're listening, and necessary, and so one of the things to think about is if you are fearing, and I hear this every week, that your spouse is going to waste money on something else in a big sum, then that may be the cause or may be the reason you want to consider moving up the timing of a divorce filing.

Now, filing for divorce and the timing around it is a very sensitive subject, and there's a lot of moving parts and a lot of things to consider, but if you are putting together your list of reasons you might want to file sooner over later, and that is it, is to prevent a spouse from wasting funds, any more funds than they have already, on certain areas of the divorce. Because that way there would be recourse and very clear recourse for you to get that money back later, if a spouse is wasting funds.

Now, those are just three things to consider, and three ways to help stop your spouse from wasting money, and to get that money back, or at least try to get that money back, either during the settlement process or sooner. When you are dealing with the divorce situation, and the divorce process, I should say, if you can trace marital assets that have been dissipated ... Whew, a lot of words. You might be able to get some credit for those, and get more of your share of the assets later down the line, because one spouse wasted them upfront.

0202: What Is a Safe Withdrawal Rate from Your Savings & Investments? May 05, 2019

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Thank you for listening! Find a transcript of this episode below.

In this episode, I want to discuss a question that came up recently, and it's a subject that while not exactly a specific divorce topic, it's very important when you think about planning for your financial situation, and has a big impact on how you think about budgeting and finances in general. It can impact what you think about agreeing upon as part of the divorce settlement. Many of you have retirement savings, or if you've listened to other podcasts, you might be getting a lump sum distribution or trying to negotiate a lump sum distribution as part of your divorce settlement, and as you may know, is one of the things I advocate for particularly.

I think it makes sense many times and is underutilized, a lump sum distribution, because both parties oftentimes benefit. If you're the person receiving that lump sum, that's great because you have all the funds. You don't have to rely upon your ex-spouse to make those monthly support payments, and if you're the person making that lump sum, you also get the benefit of, well, you don't have to make every month that support payment, and it's all kind of done upfront, and you can also end up paying a little bit less in the form of a lump sum, because you get to get those funds out early instead of over years.

I have some great episodes on lump sum distributions, but more broadly is if you have any kind of savings, be it retirement or investment accounts or cash in a bank account, the question that I want to answer on today's episode is, "How much can you plan to withdraw from your savings each year? How much can you plan to withdraw from your savings this year?" What am I getting at is, the question is, I like to keep things pretty simple. You have your income every year. You have your expenses, or I should say you have your income every month, you have your expenses every month. At the end of the month, hopefully your income is greater than your expenses, but oftentimes in divorce that's not the case and particularly in the beginning.

The situation where this came up is this person hadn't been working in 20-plus years, and they were in their 50s, and you know, you're not going to retire for another decade if you're in your 50s at least, and so the question was, "Well, can I just live off of my lump sum distribution that I'm trying to negotiate? How much of that can I spend each year and be okay?" Or if you just have general savings or if you're even already in retirement or thinking about retirement or planning for retirement, you need to understand, how much of your total bucket of retirement can you spend and be okay?

I'm going to give you just a very simple rule of thumb to make things easy and some other considerations to think about when you are considering how much money you spend from your assets. The first question is, of your savings, how much can you withdraw each year from your savings? Now, the perfect answer is you aren't withdrawing from your savings. In a perfect world, and very, very few people live in this perfect world, I'd say no one does, but in an ideal financial world, you are not withdrawing from your savings. Just to use very simple math, if you have $100,000, you're adding to your savings every year is the ideal for most people. But unfortunately, in practice, that doesn't work. If you start the year with $100,000, ideally you want to have $110,000 saved up by the end of the year, but you know, I understand that life happens. There's expenses and everything else. Sometimes your income and expenses aren't going to equal each other, and you're going to need to borrow or you're going to have to withdraw some money from that $100,000 in savings, and I just use $100,000 because it's a very simple number to do math from.

How much can you spend? I give a very, very simple rule of thumb, and it's 4%. So for every $100 you have saved, you can spend 4% of that a year and be okay. Why do I use such a low rate and such a low number? Well, if you get above 4%, then what ends up happening is it's going to be very hard to replace that money and you're going to be withdrawing from the principal. What do I mean? Put it a different way, is if you have $100,000 a year, I say it's safe to plan that you can earn $4,000 a year in dividends, interests, and appreciation over the long term, if you are just planning for that.

Now, hopefully your rate of return on that $100 is higher than 4%, but I wouldn't plan on it. You never know. I know the market's gone up quite a bit for the last decade as I record this, but there's always downturns. Interest rates fluctuate, the economy fluctuates, the market fluctuates, and if you spend more than ... If you plan on earning 8% or 10% or 15%, then that's probably not realistic, and that's a terrible plan from a financial perspective if you're making your budget and budgeting, because if you fall under those projected returns, then you're not going to have enough savings for later in life. The plan is, is, look, you can stay about even with your savings if you only spend about 4% a year.

Now, 4% a year is not a lot, and if you have $100,000 in savings, some people I know don't have anywhere near that amount. I know some people listening have many multiples of that amount, but if you have $100,000 a year in savings, then you can only plan to supplement your budget for $4,000 a year and expect to be okay. You know, if you spent $3,000 then that's even better, or zero, that's great, or even $1,000, but once you get over to $5,000 or $6,000 or $8,000 or $10,000 a year from your savings, it's going to be very, very hard to replace those funds. And so for all of you thinking about your budget and what you can spend and what can you live on, think about 4% a year. If you have $1 million, that would be $40,000 a year that you can live on and withdraw from your assets, or $100,000, I said it's $4,000, and it fluctuates to whatever number is relevant to you.

Now, second point I want to bring up connected to all of this is that sometimes when you have to, it's okay to spend a little bit from your savings for the first couple of years after divorce. I don't advocate necessarily for spending additional funds, but there's always practical realities and oftentimes it's easy to forget the reality of one's situation. If you haven't gotten a job or if you don't have a high paying career, or you haven't worked in a while and you're trying to reenter the workforce, for many people it's unlikely that you're going to be earning six figures as that first job, particularly over that first year, even when you're well educated. And sometimes maybe you are actually, and if you are, then more power to you. That's awesome, and make sure you have the other elements of your financial picture set up.

But if you're thinking about kind of reentering the workforce, which is a common scenario I deal with, or if your spouse is thinking about it and you're trying to present a persuasive case to your spouse, you have to kind of keep that in mind as well, is that maybe it might take them a year or two or three to retrain and get back on your footing. And so if you have that $100,000 pot, well, maybe you do need to spend $5,000 or $7,000 or $12,000 for a year. Yeah, that's a big bite and it does cut a lot into your savings, but if it's only for a year or two at the most, then you can use that and treat it like an investment to get yourself back on track, but treat it really like an investment, an investment in education, an investment in job training, an investment in some sort of resource or another asset that gives earning potential.

If you're spending that $5,000 or if you're spending $10,000 in a year just to keep up with your mortgage that's in a house that's too big, or if you're spending that extra money on a car payment that's too high, then I wouldn't really think that's a great use of funds because you'll never get that money back. But oftentimes you're retraining or going ... I have tons of clients who go back to school and become any number of jobs or need to kind of dust off the old degree. They might start at entry level, but since they have some life experience, they get to move up quickly, and it only takes them a year or two or three at the max to get really back in the flow of things in a pretty decent way. I mean, oftentimes won't necessarily be the CEO of a big company, but still earn a very good living for you and your family, and in those scenarios it's okay if you need to spend a little in the short term with the understanding that as you plan your budget and plan what you're thinking about, that that's a temporary thing and you should be working on or try to work on any other lifestyle adjustments you can to see how things are going on.

Also, you should be planning to not spend more than that 4% over the long term, but at the same time money is there for when you need it. It's just, try and save it for things you really need, not something frivolous like a vacation when you can avoid it, particularly right after or during or while planning for a divorce situation, because you don't know all the moving parts and the hidden expenses and just all of the things that happen during this process.

Then the third thing I just want to bring up is that when you spend more than 4%, you can start eating away at your principal. What does that mean? Well, what happens is you end up in a negative downward spiral. If year one, and I'm going to just oversimplify this a little bit, I'm going to use the number $100. Let's say you start with $100 in savings. You spend $4 of it, so you're at $96, but maybe you get some investment returns, so that gets you back to $100. So you kind of stay around even over the course of the year. Well, what if the next year you spend 7% but you only get 4% in investment returns? And if someone who's really good at math understands what I just said, you'll say that what I said is not exactly accurate, but let's just say you start at $100. Year two, you're still at $100, and you spend 7%, so you spend $7 and you only earned $4. Well, then you're down to $97. Well, to get back up to $100 is more than 4%. you have to get up to 5% or 6% to get back to that $100.

Now, if you spend more again the next year, let's just say you're down to $92. Well, getting from $92 to $100 takes a lot more effort and a lot more time. And if you spend, again, and let's just say you get down to $80, well, getting from $80 back to that $100 is a big amount, and without getting to the exact numbers and exact percentages, trying to stay even gets harder and harder and harder every year, and not only does it get harder every year, if you spend 4% of $80, that's only $3.2. So 4% of $80 is $3.2, where 4% of $100 is $4, so you have two things that are happening at the same time. One is that when you're spending your principal, you just have less overall money, and the second thing is, is an equivalent percentage of spending on a lower total amount of money is sort of a downward spiral, because you get, for every dollar you lose, you can withdraw less the next year, and then the next year and the next year, and you keep running out of money even if your percentage of withdrawal kind of stays the same, if you're above that 4% number.

Hopefully I illustrated that clearly for you. It's kind of a lot of numbers and moving parts, but the point is this, is that if you're withdrawing from your savings every year, it gets harder and harder and harder to catch up, and we don't want that happening to you. Does that make sense? I hope that makes sense.

The three points are, first point is, 4% rate for your savings. If you're planning about planning on budgeting, assume you can only spend 4% a year on your savings, or out of your lump sum, out of your savings money. And hopefully less than that. The second thing is, if you have to, it's okay in the short term to spend a little bit of money the first year or two after the divorce because practical realities necessitate that happening. But make sure it's only a short term thing and not something over the long term. Then the third point is that if you're spending more than 4%, you start eating away at your principal, which leads to a negative downward spiral, and you want to avoid that. So plan wisely as you think about your settlement and your divorce settlements, and it's a very important long term planning tool to keep in mind both while you're working and even while you're thinking about retirement.

0201: The Custody Lawyer Interview with Janet McCullar & Shawn Leamon Apr 15, 2019

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To learn more about Janet McCullar and the custody process, visit her website at: https://janetmccullar.com/.

Thank you for listening! Find a transcript of this episode below.

Shawn Leamon: Shawn Leamon, here, M.B.A. and certified divorce financial analyst, here with Janet McCullar, board-certified family law attorney in Texas and author of the new book The Custody Lawyer. Janet, it's great to speak with you today.

Janet McCullar: Thanks, Shawn. I'm glad to be here with you.

Shawn Leamon: Why don't you give us a little bit of a background on you? You just wrote this great and informative book called The Custody Lawyer, but tell us a little bit about how long you've been practicing and why you wrote the book.

Janet McCullar: All right. I've been practicing for over 25 years. I was a teacher before that, then went to law school. Not too long after I finished law school, I started working in the divorce and custody area, and have mostly done custody cases in my practice.

Janet McCullar: I wrote the book because I noticed that when people come in to meet with me for their very first appointment, and they've got a custody case, and they have a lot of concerns, we have what I call an initial consultation. By the end of that consultation, I've seen their shoulders drop, the person's more relaxed, some of the fears that they have have been addressed, and some of the frequent misunderstandings that people have about the way a case works or what might happen to them goes away. I see [inaudible 00:03:54] relief. I love that initial meeting. I love that ability to really help somebody address those fears and concerns.

Janet McCullar: And so, I started thinking about all the things that I told to people in those first meetings and put it together in a book. Also, just tried to address how a trial works and some special areas like parental alienation, which I hear about from people all the time.

Janet McCullar: So that's sort of a little bit about me and why I wrote the book.

Shawn Leamon: No. That's great. I want to get into parental alienation at a high level in just a little bit, but for someone who doesn't know anything about custody, but they know it's going to be an issue. It doesn't necessarily have to be a divorce-related issue, though of course, custody issues, I imagine, are often happen in divorce context. But for someone who just knows that they're going to have a custody question or a custody battle on their hands, what's the first thing someone should be doing to prepare for that?

Janet McCullar: Well, I think the first thing you should do, of course, is contact a lawyer like myself, and set up a meeting with them. Even if you're not sure you're going to be going through a divorce, or if you're not sure you're going to be having a custody case, going and meeting with the lawyer will give you the opportunity to get some ideas about things to do in case that happens in the future. For example, I often tell people who just want to consult with me to keep a diary or a calendar where they're marking the things that are happening. So if they're having a dispute about when visitation should be or if they're having their child's coming back from a visitation with the other parents, and the child is acting out in some way, they're making a record of it. Over time, these kind of chronologies are extremely useful to me in putting together a case for somebody.

Janet McCullar: Also, going and finding out just some basic information about what happens and what do you need to plan for.

Shawn Leamon: To that extent, is there sort of a flow to how a custody case works or a specific process that one goes through when someone comes into your office? What does that look like? I know for most people, you have no idea what they're about to face or how that process even goes.

Janet McCullar: Right. So, there's usually two ways that people come to see me. Either they are splitting up with a partner and they have children, or they already have been divorced and they're going to be doing what's called a modification of the prior orders that were made by a court. But let's talk about the first instance when somebody's coming in for the first time.

Janet McCullar: Not everyone, these days, is married that is going through a custody case, but many people are. What happens first is you come in, you meet with me, we talk about what's going on in your situation, and I give some guidance on whether a case needs to be filed. Not everybody needs one. I sometimes recommend that people go and try some other things first, such as going to counseling. And then if that isn't working or somebody's ready to separate from their partner, then we will file a lawsuit, usually a divorce. In that, it's going to include the things that we need to figure out about the child or the children.

Janet McCullar: Once that process is started, which is filing some sort of lawsuit, which I think a lot of people don't really think about that, but that's just what it is. It's a lawsuit. A divorce is a lawsuit. Then it's a matter of are there urgent matters that need to be tended to right away or are we going to go through a process then where we're gathering information that will eventually lead us to a trial, where a judge will make decisions, or before a trial, a mediation, where the people will work together with a neutral third party to help them resolve the case through a process called mediation.

Janet McCullar: Along the way, a lot can happen. It just depends on how complex the situation is. If it's a very complex situation, for example, that say parental alienation is involved, we're going to have steps in between where we're going to be asking a court to appoint some professional to do, for example, an alienation evaluation to find out if that is going on. Or we're going to ask the other side for information through a process called discovery.

Janet McCullar: I try to go through in my book a little bit about what happens at each of those stages because it is a very mystifying process for most people because most people don't go through lawsuits in their lifetime.

Shawn Leamon: Yeah. That makes a lot of sense. The other thing you mentioned as well is modifications. That's something that I imagine comes up quite a bit, or often I imagine some people don't know that they can modify a previous order, or some people might be afraid that it does get modified. Could you talk a little bit about that process as well?

Janet McCullar: Sure. A modification is a change of a prior order. What that usually means, pretty simply, is that the divorce decree or the last order that was put in place is not working for some reason or another. For example, maybe somebody, you know, wants to move out of state. Maybe visitation that was ordered under the decree or the divorce decree isn't working. Maybe the children are refusing to come and visit the other parent. Maybe the other parent isn't facilitating visitation. Maybe sometimes something big happens like a parent was arrested for driving while intoxicated, or they have developed a drug problem that the parent is starting to affect their ability to parent. All of those are the kind of things that I see when people are coming to me and wanting to change or modify what the original orders were.

Janet McCullar: A very frequent request is one parent may have been the primary parent, and now, the other parent thinks there are reasons that they should be the primary parent. And so that can result in people going to court and asking the court to modify or change the orders.

Shawn Leamon: Now, that's very helpful.

Shawn Leamon: Let's shift gears to, you know, there's a lot of different topics in the book, and I'd like to cover all of them, but don't have enough time for today, but one that you've mentioned a few times is parental alienation. What is that?

Janet McCullar: Parental alienation is situation where there is a preferred parent and a rejected parent. It is not necessarily the case that the preferred parent is engaging in a conscious plan to remove the children, but their conduct can be so subtle. Eventually, it can lead to a child flat out refusing to see a parent. Often, what I hear the favored parent saying is, "Well, I can't make the child go see the other parent. They refuse to go." Which poses an interesting question to me because if your child came to you and said, for example, "I don't want to go to school," would you just throw up your hands and say helplessly to the authorities, "I can't make my child go to school"? Or if your child needed medical treatment, parents don't, I've never heard of a parent who says, "I can't make my child get the treatment that they need from a medical provider."

Janet McCullar: But so often, people will say that in terms of a custody. "I can't make them go." Of course, you can. Every parent can make their child go and visit the other parent. And they need to make them go. When that's not happening, that is one of the biggest signs that there's some alienation going on.

Janet McCullar: It can start off in a very subtle way, but so often, it starts with a gradual, you know, the child stops going to visit, or they don't like the circumstances of the visitation, or they, you know, act out when they come to the other parent's house. All those things can start a path towards alienation or, at a lesser degree, estrangement.

Shawn Leamon: And that last term that you use, estrangement, what does that actually mean?

Janet McCullar: Estrangement is a milder form of alienation. That's a situation where, I often see a parent befriending their child and sharing with the child information about the other parent that's not appropriate. You know, saying things like, "Daddy is divorcing me and leaving us," is something I heard a mother say once. You know that most parents when they're going through a divorce want their children to know "your dad and I aren't going to be together anymore, but Dad loves you and I love you, and time with both of us is important." But a parent who is engaging in an estrangement starts signaling to the child that it's not okay to spend time with the other parent.

Janet McCullar: They can do things like, you know, refuse to let the child talk about what's going on at the other parent's house, forbid them from taking certain belongings to the parent's or from the other parent's house. In public settings, not sitting with the parent or sitting across the room, and if the other parent tries to join them, getting up and moving. Things that are sending to the child a signal that there's something wrong. Often, it gets into a very complex dynamic where the child wants to please the parent who is rejecting their other parent, and they know that as long as Mom, for example, is around that they can't be friendly with Dad or it hurts Mom's feelings too much, and they start taking on a caretaking role.

Janet McCullar: But estrangement is just a milder form of alienation. The child may still go to visitation, but there's a lot happening that is undermining a healthy relationship between both parents and the children. Another way of ... Go ahead.

Shawn Leamon: Yeah. You said the word complex, used the word complex, and it sounds like it. One of the questions I have related to that is given all of the examples you just provided, how does one prove that something's going on? I mean, these are, at best case, it sounds like almost anecdotal examples, but how would you win a case or defend someone or go after someone, just depends on the situation, when these behaviors are being exhibited? It's not like someone, there was a police report filed necessarily, or there was a video recorder going on. This is very subtle human interactions.

Janet McCullar: That's very true, Shawn. A lot of people come to me and they're worried about a he said, she said. You can imagine in family law of context and divorce and custody context, that's almost always the case. It's a he said, she said. One, I work with my clients to establish a lot of credibility with the court. I like to say it is they're going to say, but we're going to show example after example. Usually, I work with my clients to come up with very specific examples of the other parent's conduct that we can talk about. So that's one way.

Janet McCullar: But then so often, the kind of interactions that are happening between the parents are also translated into text communications, emails, postings on social media, all of those are frequent types of documents that I use as evidence to show that something is happening and to bolster what my client is saying.

Janet McCullar: People who cannot talk in terms of specifics, you know, if I ask the parent, for example, "Tell me how you encourage and support a positive relationship between your child and the other parent?" And they can't give any examples, that's going to be a thing that undermines their credibility in front of a court. But I'm going to have a client who's prepared to talk about and give example after example after example so that we can demonstrate it. That goes back to keeping calendars and journals and emails and screenshots of things that are on social media, and so forth.

Janet McCullar: In some districts, people make recordings as well. Tape recording another person is something that can be tricky. In the state that I live in, you can record a conversation that you have with another person. Just like if you and I were sitting down having a talk, I could record that conversation. I wouldn't even need to let you know it, and that would be lawful in Texas. But it's not everywhere, and so, before a person makes recordings, they need to be careful about doing that.

Shawn Leamon: No. That makes a lot of sense. Going back to the book, The Custody Lawyer, you cover a wide range of topics from the custody process, visitation, a spouse that's violent or bullying, kids with special needs, and everything else. For someone who, and I know there's many, every day across the country, someone who needs some advice, what's the best way for them to contact you?

Janet McCullar: They can go directly to my website, which is janetmccullar.com. Right on my website, there's a lot of information and also, the ability to set up a consultation with me, and I can talk to anybody anywhere at almost any time to talk about the particulars of their situation. And then secondly, would be to try and find a lawyer, and to have somebody who helps you. I think that a lot of people can save the cost of a lawyer by talking to me first, seeing if they even need to hire a lawyer or maybe I'll have some tips or strategies that they can use to help them position themselves well before they hire a lawyer.

Shawn Leamon: Well, that's very helpful. Well, Janet, it's great speaking with you today.

Janet McCullar: You, too, Shawn. Thank you so much.

0200: Why You Should Create a Marital History - Part 2 Apr 01, 2019

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode, I wanna continue discussing creating a marital history. Now, if you didn't

hear the previous episode, you should go back and listen to that one because it has a lot of

good information about the overview on why you should create a marital history, and some

important questions you should be thinking about when you create said history. And also,

some alternative methods to create a marital history and why it's so important to do. And

in this section, I want to continue with the marital history and provide some other areas for

you to think about.

This next area is called the health history, the health section. And, what should you be thinking about in here to include? Well, if there are any mental or physical problems that have happened in the past few years, particularly for either of you, but particularly if it affects the work ability, and also if it affects the way this divorce may go. Have there been any hospitalizations or major surgeries that have happened? Are there any substantial prescription medications that you may need to think about and someone may have? Also, if there are large out of pocket medical expenses, which I've had several cases where that is a substantial portion of their divorce and negotiation, that is very relevant as well.

The next section is education. You should, just for the record ... Or, I shouldn't say for the record, but for our records, give us any information on your educational background, degrees, advanced schooling, no schooling at all, whatever the case may be. And also, this is an interesting section, particularly for those who've been out of the workforce for a while. One of the things that you should think about between us and between your lawyer is if you are planning a second career, a next career, what that might look like. So, I've had clients who've gone to coding school, become real estate agents, become paralegals, become a variety of things. And, one of the things that you should consider is, if you are thinking about those things, how much it costs, how long it takes, and what life might look like after you get that advanced education.

The next section is employment. If you've been working, tell us where you've been working, about how much you make, how long you've been working there, what your salary is, what your job position is, what your future prospects are at that company. And if you haven't worked, that's okay too. Let us know. Or, if you've had a break from employment. I know some people who worked for a while, then they stopped for a while, then they've restarted their career. Whatever the case is, that's fine. Just let us know what has been going on, and also do the same for your spouse.

The next section is real estate. And actually, I just had a client send me an email 'cause they have a bunch of real estate. I said, "Just give me a list of all of this information for all of your properties. I'm just gonna run down it." For every piece of real estate you have, tell us when you purchased it, how much you spent when you purchased it, where the funds for the down payment came, how much of a mortgage you may have had, who's been paying the mortgage payments, have there been any substantial upgrades. Like, if you remodeled the kitchen, or if you added a wing to the house, or a new bathroom, or whatever the case may be. And, how you paid for those upgrades as well. And also, whose name is on the property, as well as whose name is on any debt.

And then, finally, is there other income that we need to think about, or unusual income, or unusual things in your finances? Things that might be unusual or other include income from rental property, substantial dividend income if you had a settlement. So, a lawsuit judgment that you won. If there is a trust, a spouse has a trust. If a spouse gets substantial stock options, or you get substantial stock options, something to think about. Or, if a big chunk of the income occurs in a year end bonus, or if the income is lumpy, or if there's a business involved. All of those things you kind of can toss into the other section to provide any additional explanation. And, I'll say that most people have ... not everyone, but most people have some sort of other that they need to include as part of the process. So, something else to think about there.

And, those are the main items. And so, what you do is go through each of these to the best of your ability. And, you should start filling them out. Once you have everything written down, it doesn't have to be in my order, and sometimes attorneys will ask for them in different orders, to the extent possible, you need to start gathering proof of everything, or evidence of everything. As I said, to the extent possible. If there are particular wage items that we need to be thinking about, or if there is a bank account, or if there is a mortgage statement, or if there is a medical history that we need to know about 'cause it could become a good deal, or if there was a specific instance of abuse that may be relevant, or if you've been seeing a therapist for a while, either you singular or as a couple, start gathering up that information. Anything that can ...

As I say oftentimes on many coaching calls, I'll say, "I understand what's going on, but do you have any proof that what you're saying has happened? Something with the kids?" It's better to have as much documentation as possible that proves what you're saying is correct, rather than not having it at all. And so, as part of that, you just go section by section and start getting the evidence you need, particularly if there's going to be, or if you anticipate, a dispute over something. So, a good example, let's just say, is a bonus. Sometimes spouses manipulate what their income actually is. And so, what you'll do is you'll need to go get the tax returns and say, "Hey. On the tax returns, here's what happened over the last five years. Here's five years of returns. Here's a good way to verify what the income is, or what the income has been."

Or, if there is a medical issue ... I've had a few cases where almost 100% of the divorce is about medical things. And if that's the case, then you need to have evidence of what medical treatments you've been having, what the out of pocket has been, who your doctors are, what prescriptions you take, and what the future prognosis is of that medical condition. If you're on disability, why you've been on disability, what prompted it, what evidence you have of it, why it might mean you can't work. Or, if you're the spouse contesting the disability, which I also have some clients who are contesting a client's disability claim, why ... You don't think that spouse is as disabled as you think they are, and here's some evidence. Here's a Facebook post of them running a half marathon, or doing an adventure sport, or playing golf and walking around just like they're fine, where they claim they can't work and they can't get out of bed.

So, whatever that is, anything that you're going to anticipate contesting ... It could be something for the kids. I don't know. But, start getting in the mode of gathering evidence now and including that in the marital history.

Another common one that people forget about, but if you have text messages, or emails, or in some cases, a little bit more extreme end, recorded phone calls or conversations, that is also evidence, or potential evidence. Make sure you don't violate any laws. But, if you take a screenshot of a text message conversation, or if you have nasty emails or nasty voicemails, or Facebook messages, or whatever the case may be, all of that type of stuff is also potential evidence that can help you with your claim.

So, what do you do? So, let's take a step back. Just giving you a week's worth of potential work. You start answering all these questions. There's no set form, per se, that you have to fill out. It's just what makes the most sense for you, and what the major items are, and what you wanna include. You can always add to it or revise it later. But once you have it, what next? Well, once you have that information and you have the evidence, you need to take a step back from it and keep it all organized as possible. Have a friend look over it, and say, "Hey, friend. Here is some evidence that ... Give a look at this. Is there anything I'm missing? Does it all make sense to you? Is it clear?" If you have a trusted friend, show them everything you've prepared.

And then, once you have that all prepared, and everyone's reviewed it and it's good to go, it's nice and organized, share it with your attorney. Or, if you're gonna book a coaching call with me, or book a call with another certified divorce financial analyst, or someone else, prepare it as well. And, send that information over and say, "Hey. I want you to review all of this in advance of our conversation." Or if you're gonna go to a meeting, bring it with you to the meeting, or ask to have it reviewed in advance. I have a document review call that I recently started offering where we go through marital histories, and other relevant documents, in advance of the call so we can dive deep and really understand what's actually going on in the divorce. And so, I would start thinking about those things, and share it with the people who are your trusted advisors. Be as honest as you can, and we will interpret the information to the best of our ability.

Also know this, is that your spouse may be doing the same thing. And so, sometimes it's helpful to hear ... Or, maybe not even helpful. But, sometimes we will hear the other spouse's side of the story as well. It's not just a one-sided process sometimes. We always work for the person who hires us. But, if you're kind of going through a collaborative process and you're on good terms with your spouse, have your spouse prepare their version of the story as well. It can be very helpful for all of us as we figure out what the appropriate course of action is, and how do we get through this process in one piece and minimize the amount of conflict, and make sure everyone gets, to the best of our ability, the outcome that we hope to get them to.

There's no right or wrong way to do a marital history. The more information you can include, the more organized, the better. There's not a template. There's not a worksheet you can fill out for this one. But, start thinking about it. Start preparing it. I guarantee you your attorney'S going to appreciate it. I will appreciate it. Everyone you work with will be very appreciative of a marital history when you create one.

0199: Why You Should Create a Marital History - Part 1 Mar 24, 2019

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

I'm going to discuss a topic that I haven't brought up on the podcast before. And that is creating a marital history. Now, this is something that I've talked about on one-on-one coaching calls, but not something that I've brought up on the podcast and I think it's a really important subject that everyone should listen to. And perhaps, everyone should create. One of the challenges when you are getting divorced and you hire someone like me or you go to your attorney, is trying to catch up on everything that has happened. And of course, a lot has happened, particularly, if you are contemplating separation or divorce and are going through that process. And so, one of the things that can help us and help you and help everyone, is what I'm going to call a marital history. Some people might call it a marital history questionnaire, a lot of attorneys I know don't do this at all and they might just ask you questions.

But, this is one of the most powerful tools that I'm now a big fan of. That I think that everyone should do and should create and should work with. And do on their own. It's something that you can do individually. It's not necessarily going to be a fun subject, but it can be very important when it comes to settlement negotiations, if you have to go to trial, and just helping us understand the context of what's going on. One of the things that I ask, if you book a coaching call with me, there's always a questionnaire that covers some basic information on a marital history. But, for the sake of this episode, I'm gonna get into some really in depth issues that you might wanna create, or thinking about, or think about creating that will help everyone get on board. One of the biggest challenges when it comes to your attorney or comes to me or comes to an accountant or something like that, is that we don't know you.

And we don't know everything that has been going on. And even if we do know you for a while or work together for a while, there's stuff that we might forget or we might miss or we might not have it all in order. And so, one easy way to provide clarification in terms of your history and things have gone on, is to document it. Write it all down and create a marital history document. And I'm going to get into what goes into a marital history. And there's different ways that you can do it. But, what it does is in the span of 10 minutes for us, is we can read a few pages of information that you prepared and say, "Okay, I'm starting to get a feel for what's been going on over the last five or 10 or 15 or 20 or 30 years." And now, I can start formulating a strategy in terms of "Oh, your spouse is a narcissist" or "Oh, I understand that you've been a stay at home parent all of this time" or "Oh, you're the primary bread earner and this is what's happening" or "Oh, this spouse has money issues" they can't save.

Or "Oh, you've been or the spouse has been great, just things aren't working out and we need to get a divorce and this is what's gonna happen" or "There's been abuse and here's some examples of instances that this has taken place". Whatever the case may be, it's easy for us to come up to speed with what those things are. And it's in a marital history document. And so, what I'm gonna do over this episode and perhaps a couple of episodes is go through some of the things that should be on your marital history and some different ways to prepare it and some different considerations to do. Now, there is a ... There's sort of two methods to creating a marital history, and they're not exclusive, meaning you can do both of them. And the one that I normally go with, not because it's right or wrong, it's just the way that I think. Very analytical and I deal with of numbers.

And I like creating what I call a timeline. Or what many people call a timeline, in which I say, "Hey, if you wanna do a very simple version of this document that's only a page long", which might be all that you need for some people is, look, just create a page, or two pages at the most. Create a timeline for me. Tell me what day you got married. Tell me the big events that occurred in your marriage." So, if you bought a house on a particular date. Tell me that on May 1, 2002, you bought a house. And just give me like ... You can keep it that simple. You could say, "Hey, we bought a house. We both contributed $50 thousand each for the down payment. And blah, blah, blah, blah, blah." Or, if it's something more complex than that, maybe you could say, "Oh, well I contributed the down payment, spouse did not contribute, house is in my name only. And I pay for the mortgage. And have for the last 20-some years."

Whatever the case may be. I said, "2002", so I guess less than 20 years, last 15, 16 years. And so, you can do that or you could say, "In 2017, in June we had our first big argument and I left the house for a month" or "There was an abuse situation that occurred and police were called" or "Went to marriage therapy for the first time". But, what you do is you just take all the events in order, put them with dates and you list them on a page. And that's the simple method that can say, "Okay, I can see the big events. Here's some quick explanation in terms of what's been going one". I've had people who do it by hand. You can type it up. You can do it in excel document. Whatever is easiest for you. And just quickly layout the history and timeline for things that have happened.

Now, I'm going to go through a little bit more of a comprehensive method that can be paired with a timeline, but I'm gonna go through a lot of different questions and a lot of ways to jog your memory in terms of things that you should include on this marital history. Now, if you walk into almost any attorneys office they'll have a intake form for you to complete. Some of the questions on that intake form are helpful and will relate to a marital history. But, some of the stuff I don't really see on many lawyers intake forms, even at the best law firms in the country. But, this is the kind of information that can save everyone a lot of time and energy and questions. And provide a lot of clues in terms of how the divorce should proceed. And so, what I'm gonna do is I'm gonna go through a bunch of questions, a bunch of prompts for you to think about. You can ... I don't have them ... You can kinda just think through these.

You might wanna pause for certain ones. I'm going to just kinda read through them, some of the important ones. And start making some notes for yourself. And also just FYI, is I keep a transcript of all of the episodes on the podcast at DivorceInYourMoney.com. If you click on "Podcast" you'll see a transcript of all of the episodes, so if you miss a question or you can always rewind, but also, I keep a list of these questions for you. And I'll try and keep them separated pretty easily, so you can kinda copy and paste if you wanna look at some of these down the line. I know some of you listen to this while working out, some in the car, some at work, and sometimes you're not in a position to write these down at the moment. So, I'm gonna try and make these as easy for you as possible at DivorceInYourMoney.com. And if you click on the "Podcast" button, you'll see the transcript for this episode, in terms of the questions. And I'm gonna do this, probably over two episodes. So, if you don't get all of them now, the other episode will be up shortly.

Now, questions to consider. And let's go through these. These aren't gonna be fun, but you should write these down, type them out, whatever's best, so long as the information is in a position that you can communicate it and share with the people who want to help you. Me, your attorney, et cetera, 'cause this stuff is useful. So, first section is on marriage. There's lots of things to consider in the marriage category. Things to consider such as: Is this your first marriage? Why don't you tell ... You should write down when you got married. Where you got married. And if you had any previous marriages, make sure you write those down and document them as well. Was there a clear time that you separated? You should include that. Why did that separation happen? And if you think there's a clear time you separated, sometimes it's as simple as, "Well, my spouse moved out of the house on August 4th." That's a clear separation date.

But I know many of you are still living together or maybe you're still contemplating divorce. So, a formal separation hasn't happened yet, but you might want to say, "Hey, I think we kinda of ... I think the breaking point was this day." And, there always is a breaking point. You can say who left, what the circumstances were. Those types of things. The next section I would consider is kind of a loaded one, but we'll call it the Fault Section. And trying not to over communicate emotions into some this process. Just try and state the facts to the best of your ability. I've worked with clients on creating these before and sometime you'll say "Well ..." you might have a paragraph as to what you're explanation is, but really ... and what you're thinking, but really, only one thing happened. You moved out of the house and you moved out because there was a threat of something or it was just time or you finally found a new place to move.

Just write "Moved out of the house. Found a new place." Not, "Well, I've been thinking about moving out of the house for eight months and I was walking around the neighborhood and I took a walk and on that walk I was contemplating it and I saw my neighbor and the dog and we had a nice chat. Then I went and had a drink and then the wal ... and then ..." You don't need to do all that. When it comes to this next section, in particular, just try and state the facts to the best of your ability. Remember, everything I say in this process, to get the best outcome possible is to really look at the facts. So, here's some questions: Why do you think the marriage is ending? What did you do that may have contributed to the marriage ending? Sometimes that's an easy question like, "Well, I had three affairs, but those affairs might be because my spouse did not fill my needs in another way" or "We haven't talked" or whatever the case may be.

Now, what things did your spouse do that contributed to the marriage? If you're getting divorced, I know that list could fill a book. But focus on the big items, the breaking points. Are there any third parties that are involved. So, is there another boyfriend, girlfriend that's been involved in this process or that's the cause of this? Is there something, someone outside of just the two of you that is leading to the breakdown of the marriage? As I said, try and document the big things, not everything is of relevance, but to the extent you're willing to share it with your attorney or with me, write it down. Write down the facts and kinda keep it clean. Next area is on children. Make sure you have the ages of the children, where they were born, where they go to school. Do they have any medical issues?

I deal with a lot of people who have children who have special needs. And that provides or adds a layer of complication in the divorce. Is there anything unusual about the child's lives? It could be in relation to, well I have some kids who go to boarding school or who are exceptional musicians. When I say, "I", I mean I have clients who have kids who are like that. You should make those things known. Is your spouse a ... Could they still be a good parent? Is there a reason that custody should be ... And I hate to use the word "Custody", but is there a reason that one child should spend a lot more time with a parent than another? In some cases that's clear, in some cases that's less clear. But, if there are some things that need to be brought up, then by all means, start writing those down. And also, from the kids perspective, if you could guess, sometimes it's obvious, sometimes it's not. But if you could guess, do you think the kids would pick a particular parent to live with?

And if so, why? I know some people who have kids, they're in theory living in the same house, but one parent has almost no relationship with a child in the house for any number of reasons. And so, if that's important, then write that down. Has one parent been the primary parent in the relationship? That is very relevant. It's not a negative thing, if one parent has, usually in most relationships, or in many relationships, one person worked and the other person takes care of the household including the kids. So, it's not unusual if one person is, but it's good to be honest and as truthful as you can with your advisors. At the end of the day, even if something might look back for you, it is not something that we're making a judgment on. Our goal is to help get the information in the context, so that we can help you and help make the right decisions for you. And help you make the right decisions that you want.

And so, those are the first areas to start with. Is the marriage, why is it breaking down? Just some basic information about the marriage. Why it's breaking down. And tell us about the kids. In the next episode I'm gonna go through some other questions to think about, like health, education, employment, income questions that will help us get a better picture of your marital history and your marital status. And, just a reminder, you can write these down, you can type them out, whatever format is easiest for you to do. But, be as truthful, as honest, and as much detail as you can so long as it's relevant detail. Stay tuned for the next episode. A lot of good stuff coming in and a lot more questions I wanna make sure that you have answered, which will, I won't say make your divorce smoother, but will certainly help us and help your attorney, help anyone who helps ... help your mediator, whoever it is, in the divorce process present the best case for you.

0198: When Should You File for Divorce? Feb 24, 2019

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

When you think about divorce, it is indeed a process, and as part of that, I get to work with you through all stages of the process. Sometimes it's months or years before you file, and you're trying to figure out the key items. Other times during the divorce, you're trying to figure out what path makes the most sense for you, and sometimes, it's even after divorce is over and whether or not it makes sense to pursue a modification or trying to enforce a part of the agreement that's not being taken care of promptly. In this episode, I want to give you some considerations for those of you who are still considering filing for divorce, and in particular, when you should file and whether you should file first. There are reasons that you might want to file first, but the end of the day, if you can control it, you should file for divorce when the time is right for you.

Now, sometimes that timing is enforced upon you by your spouse filing, but if you're in a position where you can control when to file, you need to wait until it makes the most sense for you and your family. Sometimes that might mean, well, waiting for the kids to get out of the house and go off to college or go off to their next career. Or I'm thinking about taking this job or my spouse is thinking about taking this job in another state, or whatever the case may be. Or maybe we're still in the trial separation phase, and we want to reconcile, and so maybe we shouldn't file for divorce quite yet.

Whatever the case is, you need to, if you can, wait until things are right. Now, sometimes you are kind of forced to wait. Maybe you're trying to figure out certain financial complications or other things as part of divorce. I mean, there's a lot to think about when you're filing for divorce. There's 200 episodes of this podcast, which just deals with the financial issues and doesn't even get into most of the custody issues in the legal process of divorce, oftentimes, as well, that's involved. And so there's just a lot to think about whatever the case may be. But in general, I would say my advice is this, is don't rush into divorce if you can prevent it.

Oftentimes when I talk to you and you're still in the early phases, you might be still trying to reconcile, and you might still be trying to do things to make things work for you. In that, case I'll say, "Hey. You know what? Here's what you need to be doing to prepare today just in case the worst case happens. But it's my sincere hope that I never have to speak with you again, and you reconcile, and you're able to work things out." That's my hope is that I don't have to ... If I didn't have this job, I would be very happy. But you know, things are what they are, and so we have to confront them head on. I want to make sure that you're protected.

That said, now there's some reasons that you may consider filing first. I'm going to go through three reasons on why you might want to file for divorce and might want to do it sooner over later. Now, sooner doesn't necessarily mean next week or next month or even next year, but when it looks like divorce is inevitable, there are some things and some reasons you may want to consider filing for because you can dictate a few key elements of the divorce process or maybe have some needs to dictate a few key elements of the divorce process.

I've been reading a lot of military books lately. I grew up in a military family, and I find military books fascinating. One of the things that's come up in a lot of the books I've been reading lately, particularly on the more modern wars, Afghanistan, Iraq, and some of the other conflicts that we’re involved in across the world, is these soldiers repeat a phrase that is actually pretty important in the divorce process. But they keep repeating this phrase, tactical advantage, and there are tactical advantages to filing first when it comes to the divorce process. What are those? These are things that give you a leg up against your opponent and unfortunately, your spouse becomes your opponent in the divorce process. Sometimes it's necessary to get the advantages you can have, particularly if you're starting at a disadvantage.

Here are the three reasons to consider. One is you get to choose where you want to file. Two is if there's immediate danger to you or your children. And three is to prevent the movement of assets or prevent further hiding of assets. I'm going to go through each of these issues.

Point number one is you get to choose where you want to file. Oftentimes, either one of you is moving out of the house or maybe moving across the city or the state or to a different state entirely, and that can provide or propose some potential complications when it comes to the divorce process. If you are in one state and your spouse is in another state, for example, I'm going to use the extreme version of this. Well, and you're both residents of your respective states, well, whoever files for divorce, well, that's likely where the divorce is going to be taking place.

So, if you live in ... I'm just going to make up these examples. Let's just say you live in Texas where I am, and your spouse is moving to Colorado. I have a situation right now where something like that is taking place. Your spouse lives in Colorado now. Well, if you file for divorce in Texas, then you get to have a Texas lawyer who's near you, probably in your town. You get to pick the court and the county and everything's better. But if your spouse files first and your spouse is in Colorado, well, many of the issues that have happened in this divorce are going to take place under Colorado law, and then you're going to have to get yourself an attorney in Colorado who can practice in Colorado. You're going to be going to court in Colorado potentially, if that's what's required. You know, you have a distance issue that adds some layers of complication to how this process may go for you.

So, if that's a concern for you, or it might just be a different city, if someone moves a few hours away, you have to be prepared to make that few hour trek whenever you want to have an in-person meeting on a particular issue. So, there's things to think about in that regard when it comes to divorce. If you have that issue, you may want to be the person who files first so you can dictate what jurisdiction you are in.

Now, second thing is if there's immediate danger to you or your children. I'm looking for some good experts in this area to talk about some sort of abuse things because it's something that comes up more often than I would like. But if you are in a position where you're afraid your kids could be kidnapped or abducted by your spouse, or if you're in a position where there's a lot of abuse going on, be it physical or emotional or otherwise, then you should consider filing for divorce first, and also, putting, implementing at the same time, some legal protections to prevent a spouse from further communication with you, direct communication, or to make sure there's supervised visits with the kids, or whatever sort of protection of custody there may be or that's required for your children or you so that you are legally protected.

You know, there are some tragic situations out there where a spouse doesn't protect themselves, and the worst case, either severe abuse can happen, or there's cases where you can be threatened with your life. And one of the ways to help protect that, it's not the only way, but one of the ways to take a step in the right direction is to file for divorce and for additional legal protections to prevent your spouse from communicating you or having certain contact with you in order to ensure that you're not threatened down the line. And if there are continual threats, that you have a legal recourse to protect yourself in those circumstances.

Then the third thing is to stop the movement of assets. So, one of the things that can happen is when you're getting divorced, they have these things ... Oftentimes, you have to ask an attorney what your local version of it is, but it's an automatic temporary restraining order, which actually, it doesn't have to do with a physical things, actually tends to deal with monetary things. Basically what it says is that you and your spouse or that you ... Yeah, you and your spouse, can't make unusual financial decisions anymore now that the divorce has been filed.

What do I mean? Well, because a divorce has been filed, you can't, all of a sudden, take a bunch of money out of a joint account and steal it, for all practical purposes, or your spouse can't go get a new loan to try and hurt one's credit or can't open up new investment accounts or can't move large sums of money around. When you file for divorce and you have these restraining orders in effect, then you have the potential to protect yourself if your spouse does do something suspicious and something fishy. And if they do it after the divorce is filed, that can really come back to haunt them and hurt them later. It gives you a layer of legal protection to say, "Hey. Your spouse is in violation of certain things, and therefore, you deserve to be compensated for those things."

This really comes into play a lot when ... I know I'm willing to bet almost all of you suspect ... Most of the people who listen, or many people who listen, suspect to some form of a spouse hiding money from them. Oftentimes, that is indeed the case. Now It's just the question of how much is being hidden from them. But when that is happening, one of the ways to provide some real consequences for that to continue happening or to prevent that from continuing to happen is by filing for divorce and having these orders in effect where it says if your spouse does something fishy, they get punished. But if you haven't filed for divorce yet, a lot of things that you can do while still just a normal married couple, like take a bunch of money out of accounts or take loans out or whatever the case may be, might be perfectly legal and perfectly normal until a divorce has been filed.

Now, as I said, whether it is choosing where you want to file, be it the state or the county or the city, be it your kids are danger or you're in danger or you're trying to prevent the movement of assets, ultimately, timing can be very important for you and the divorce process. Sometimes these things are very time-sensitive and super urgent, and you need to pursue them right away. And then other times, you're in a relatively amicable situation, and you're just trying to do the best for the family and the kids, and you're in a position when you can wait and kind of can figure out some things in advance. You can kind of wait on things and plan more carefully for some of the considerations that you have when you're filing for divorce.

Ultimately though, you have to file when the time is right for you. There's a lot of considerations, there's a lot of things you might need to think about and work through, but do it when you're ready. Don't do it sooner than you're ready. And as I say, if there's a chance ... The other thing I didn't really get into, but if there's a chance that you're still can reconcile with your spouse and you think that there some things that you can do, well, maybe you should wait a little bit longer. But you have to weigh the pros and cons of waiting versus filing now to determine what's best for your situation.

If it's one of those things ... One of the times I do a lot of coaching calls is for people who are still researching their options and trying to figure out, well, should I file? How should I file? What options do I have? You know, there's very different options for pursuing the divorce process when you're in an amicable situation than there are when you are in a highly contested and very adversarial situation. There's a way to preserve family relationships even though you're getting divorced, and there's other times where you have to kind of go all out. But if no one's filed yet, you kind of have some options in terms of talking through, or one of the things we can talk through is what makes the most sense for you and making sure that everything goes for the short and long-term in the way that you want them to.

Filing for divorce is a huge and complex decision. As you do your research and you're thinking, I want you to write out, weight out these different concerns. Hopefully, when the time comes, or hopefully, never comes, you will be making the right decision for you, your family, and your ultimate situation.

0197: Why is My Attorney Not Fighting for Me? Feb 17, 2019

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Thank you for listening! Find a transcript of this episode below.

As part of my job, just about every day I work with attorneys all across the country. And I wanna communicate as often as I can important lessons I learn from working with them, the good, the bad, the ugly. Since I get to see so many styles, and cases, and jurisdictions, is kind of telling you what's normal, or what to look out for, and make sure that you're making the appropriate decisions, and have a good working relationship with your attorney as you go through the divorce process.

Most of the people that I talk to and work with don't go through divorce every day, hopefully not, and it also means you don't have to interact with lawyers every day. So one of the things that is difficult at times is trying to figure out if the behaviors that you're sensing with your lawyer are correct. Ether or not you need a second opinion, whether they're doing a good job for you. And at the end of the day, even though I get to help you with many of the complicated issues in divorce. And as you know it's called Divorce and Your Money, and so I specialize in the financial aspects of the process.

A divorce lawyer is essential in the divorce process, it's ultimately a legal process. I wanna make sure that you maximize the relationship that you have with your attorney. One of the biggest complaints or comments I get, and I get this almost in ... And I would say it's about half of the people who call have the same comment, and that is, why is my attorney not fighting for me? Why is my attorney not advocating for me, not working on my behalf to the extent that they should be. And you're in the middle of the divorce process, this is your life that's at stake, your future, your kids life. And the question is, is why is this person you've paid thousands, if not tens or hundreds of thousands of dollars in legal fees, are they really advocating for you the way they should?

And you call, and you're saying, "Hey is this really in my best interest? Why aren't they pursuing X, Y, and Z?" And I'm just not comfortable, and I'm kind of wondering if this is normal behavior" And so on this episode I wanna discuss some important things you should keep in mind with the relationship with your attorney, and some ways to handle situations in which your attorney is not fighting for you. I'm gonna go over three points. The first is understanding that there are different skills of lawyers. The second is that you should address your concerns head on. And then the third is oftentimes you need a second opinion or have to make a change. And so I wanna get into all three of these issues as you consider your relationship with your attorney.

The other thing I wanna get into, just briefly, is I also get to work with some exceptional attorneys across the country that I recommend as often as I can. Now I only do that through coaching calls if I know someone in your jurisdiction. And if I don't know someone I can show you ways, show you some resources to find good attorneys, or you can listen to some of the other podcast episodes. But there are also some awesome attorneys out there that if I wanted family law help I would call immediately, and without any hesitation.

So let's get into what happens if your attorney is not fighting for you. The first thing is it's kind of a mindset question, and issue. You have to understand is even though your attorney is an expert, or hopefully and expert in family law, everywhere in the country there are good attorneys and bad ones, and some attorneys who are okay and in the middle. And so the point of that is that attorneys are just humans too, they're just like you or I, they just happen to, in the family law world, specialize in divorce, and custody, and family law issues. But, you should not treat your attorney as God. Sometimes attorneys have flaws, we all do, I have flaws.

There are good attorneys, there are bad attorneys out there, and even some of the most highly reputable attorneys actually, even though they have a great reputation, and may have a lot of experience, I know some very highly reputable attorneys that I would never send a client too, because they're not that good in my opinion. And if you're in a position, or maybe they're just not good with you, and your personality, and your case. And so if you're thinking about an attorney and your relationship with them, if you have issues, they might be real. You may have hired, I have some people who've hired and spend hundreds and hundreds of thousands of dollars on legal bills, and are very dissatisfied with their attorneys and rightly so. Because they're not oftentimes doing a good job representing them.

I also know people who spent $1000 on an attorney and who did a killer job for them. Or I should say a couple thousand dollars, it's very rare to get a $1000 attorney, but a very inexpensive relative to the cost of divorce amount, and attorneys do a great job. So it's not always money, or prestige, or anything else, just because they do a lot of branding or have a very nice office doesn't mean that they're going to be doing a good job for your situation. And so if you feel as if you're not being adequately represented, you should take stock of that feeling, and that intuition, and really understand and try to articulate what those things are.

The second thing is, once you understand that, is that you should address your concerns with your attorney. Now there's ways to address concerns without being confrontational. And what do I mean by that? Oftentimes if I have an issue with someone, particularly another professional, and particularly a professional that I have to work with closely, I will be very polite about it. And what I might say is, "Hey Mr. Smith," or, "Hey Miss Smith, here are some things I noticed about my situation. I have some questions about these, is this right?" And I'll say, "Here are my four concerns" or, "Here are my three concerns." One, two, and three, and I'll draft a nice E-mail. I'll make it very polite. And I'll say, "Hey, does this make sense?" Now if that person brushes off my concerns then that's a good indication in terms of what you should do. If they say, "Oh, those are very valid concerns. Let me address these for you," and they fix the situation, maybe that's all we need.

But maybe, you know you need to bring them up, and usually politely, to make sure that they understand what you're feeling, and make sure that they understand your perspective as politely as possible. Look, even though you've paid them and they're there to fight for you, every human has different styles, and attorneys have different styles. But you need to make sure that they understand your concerns, and you need to be forthcoming about them so they know that you have an issue. Sometimes, as I say, I'll talk to lawyers, or go to happy hour or something with an attorney, or dinner, and they'll tell me about this case or that case, and oftentimes they had no idea that a client had a concern with them, or that there was an issue that arose, or something else.

Or sometimes they'll say, "Man, this person really had unrealistic expectations and so we had to address these concerns one, two, and three." And it's one of those areas where if you say, "Hey I think on the house issue we're not doing a good enough job about protecting my interests. Are there some alternatives?" They might say, if you were to put that in an email, or put that into writing to your attorney, they might say, "Well, the law in our state says this is the way it's done. I understand your concern, but unfortunately the law is not on your side on this particularly issue," then that's a great way for the attorney to address your concern. However, if you were to send that same email saying, "I don't think we're doing enough about the house," and they were just to say, "Yeah well it is what it is. We need to focus on this other issue," maybe that's not ideal for you.

Or maybe they'll say, you wanna kind of test these issues and bring them up head on to really understand what is their reaction and are you justified. Sometimes, a lot of attorneys, and I do wanna defend them for a second, they do this all day, every day, and for a living, and they know the law inside and out, and sometimes they forget to communicate certain elements of it to you. And so you have to kind of usher them along in the sense of that relationship, and tell them your concerns, and bring up your concerns. 'Cause ultimately this is your divorce process, and you really wanna fix up and have a productive relationship with your attorney to the best of your ability.

Another thing I wanna bring up to that point is, you also need to make sure that your attorney knows what you want. Oftentimes in most of the calls I'll get is we'll talk for a little bit and I'll say, "Okay, well what do you want? Do you want this issue, or that issue. Or do you not want. What do you want to happen after explaining your concern." And if your attorney, or if I don't know what you want to happen, then it's hard at times for them to craft agreements in your interest, and in the interest of what you ultimately want and need.

Now the last thing is, sometimes you've done all this. And I know people in situations where they're having some concerns with their attorney, they've brought up, oftentimes over a series of coaching calls with me, we've gone through the relationship with the attorney. I've written emails for clients and say, "Hey, I hear what you're saying. Let me write up an email, you can copy and paste it, and change the language a little bit. But then you can send it off to your attorney and see what he or she says." But let's say we go through the steps and understand, and it turns out that your attorney is just not up for the job. Well, then you need to make a change. And making a change is very, very, tough, and it's not always easy, and it can be expensive.

But depending on your situation, if your attorney is not fighting for you, it only adds to problems over time. One of the things I like to say on coaching calls, I don't know if I've ever said it on the podcast before is, "A bad attorney does not magically get better just because you keep paying them." A bad attorney does not magically get better just because you keep paying them. And so oftentimes if that attorney is not doing a good job for you, you will get to a point where you need to make a change. I've worked with some people who had a bad attorney for years, and they keep paying the retainer checks, and bills, and bills, and bills, always with the hope that, well if they just do this it'll get better. And two, or three, or four, years go down the line and still the same situation, still the same poor representation. And you should have, when you first saw an issue, started to work on an adjustment then.

So there are things to be said about your attorney, and how things are going, and you gotta know that they don't magically turn around, and don't magically become better. And so you need to look for an alternative. Have a couple of consultations with some other attorneys in town, and get second opinions. Choosing an attorney is ... It's not something that you should feel bad about if you made the wrong decision. It is very, very, very, hard to choose an attorney correctly the first time. It's just tough right, you might've gotten a recommendation from a friend. You might've looked on-line. You might've this or that, but you never know, attorneys are people too.

I have an attorney friend, who one of the only negative reviews that they got, they're one of the best known attorneys in a very large city, one of the only negative reviews they got was, well my attorney got cancer, or this friend of mine got cancer right after they hired them. And well their case didn't go as smoothly as they would've hoped. But of course it wasn't going too. And that person, and that situation, probably should've gotten a different attorney for the duration of their case and it would've been okay. But it's one of those things where it's just tough, you never know, attorneys are people too, they have their own wishes, they have their own families, they have everything else. And it's hard to figure out what a relationship is going to be like with an attorney, during one of the most difficult times of your life, just from a few data points and writing someone a check for a lot of money.

And so you really just just need to kinda keep that in mind, and try to be objective, and professional about your situation. There's no need to scream and yell at your attorney. But if they're not doing a good job for you, you need to address and deal with those things upfront and clearly, 'cause it's going to have a big effect on your divorce and the rest of your life. As I like to say, "The decisions that you make today are going to affect you for the next decades," and so you really wanna make sure that you have a trusted team working on your behalf, and advocating for the things that you care about the most. And if there comes a point where they're not doing that, well, then you need to make a change, and find some people who will.

0196: Why You MUST Know Your Judge before Going to Divorce Court Jan 22, 2019

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

This may be the one of the most important episodes that I've ever recorded. I spent a good chunk of my time in December at a conference for lawyers and a lot of the top family lawyers in the United States were there. And one evening we all went out to dinner and we spent three or four hours together, just discussing what's going on and what's going on in everyone's practice. What they're thinking about, whatever. It was fascinating because all of these lawyers, they're the top in their respective cities and states, from California to New York to Florida, and everywhere in between. They all universally had one big issue. One very important issue that they wish that their clients understood so people like you listening to this podcast.

They wish that everyone would get a better handle on and understand as it pertains to the divorce process. And what was that? That was you need to know who your judge is and how they think about decisions. Many times you come from this perspective thinking, well because we haven't come to a settlement I think we're just gonna fight it out in court and that's gonna lead to a judge listening to everything I have to say. They're going to take into everything into consideration my ex-spouse has done over the past year or 10 years or 20 years or whatever the case may be. Ultimately if they just hear my story that you are ... That that judge is going to listen, take it into account and rule in your favor.

It turns out that's not the case. What you really need to understand is most of the time if you can avoid court, you should. You need to understand how judges think, how they react, and how unique judges are and how much of a gamble going in front of a judge is for most people. I was talking with these lawyers at dinner and as I said we were together for three or four hours and it was just amazing how much time we talked about the judges and really a few issues came up when it comes to judges and thinking about what might happen in front of a judge. I wanna get into a few of these issues. The first is that many times in your county court you don't have a family law specific court. So if you are in certain ... Whatever county you're in, where your courthouse is, that county or the judge that you might see in a given day might have 10 other different types of issues that he or she may be dealing with on that same day.

That judge might be looking at traffic ticket cases. They may be looking at a criminal case. They may be looking at a business dispute. They may be looking at a neighbor dispute. Oh yeah, and then you stroll in and you wanna talk about this family law issue that you're having. Your divorce, this hugely important issue. But then as soon as you walk out of the room they're thinking again about the next five traffic cases. Then they have something with the police officer. Then they have some sort of meeting with attorneys and the point being is, they aren't just focused on family law often times. You can't expect them to know all the intricacies of the law, all the ends and outs and really understand and be able to critically analyze all of the things that you want them to think about because that's not their primary job.

They're either appointed in some places or elected or whatever the case may be. They have so many different responsibilities. Your case, even though it might be the center of your world is one of many things that they are dealing with and looking at on a given day. On top of that, there are some counties that do have family law courts. But what happens often times is what many of these attorneys were speaking with me about is that even when you have a family law court those judges often times don't come from a family law background. The ones that do, they might be there for a year or two before moving on to their next appointment or the next step in their career or different court entirely because family law issues can be exhausting and very tough to deal with day in and day out. So there's a lot of turnover there. So the first thing you need to understand is not all judges specialize in family law and the ones that do often don't have that much experience in family law.

So you shouldn't necessarily get your hopes up. The second, is I kind of eluded to this in the first point but judges don't have a lot of time. Almost in every courthouse across the country judges are overworked, underpaid and understaffed. And actually I'm gonna hold off on the underpaid part for a second. But I will say overworked. And so judges have an enormous case load of people that they have to get through on a given day and it's very tough for them to negotiate and deal with every intricacy of every case on a day because you might be one of 10 cases they're seeing that day. And maybe 50 different people they're seeing that week. Then maybe one of 200 people they're seeing that month. It could even be worse than that in terms of the numbers. And so trying to get them to really I don't wanna say care about you, 'cause not that they don't care but really be able to have the ability to get into the in's and outs from any judges is exceptionally difficult and nearly impossible.

Otherwise they'd be working 24 hours a day, 7 days a week and still not get through the amount of work that's on their plate and that's being required of them. Therefore it puts them in a position where you don't get to share all of the facts and consider all of the facts that are relevant to you. The third thing is that judges have bias. Judges are humans. I mean often times I hear from you and we talk and it sounds like you feel as if the judge is going to be your savior. You almost speak in terms like that. That's just not the case. I'll use an interesting example from Dallas 'cause I'm based in Dallas and I know a lot of Dallas family lawyers and I get to speak with them pretty clear. And I have a decent sense of the Texas court scene, you know I'm not there every day by any means but one of the things that's fascinating is in one of ... I think in Dallas county, there's something like 32 judges or something to that effect, I don't remember the exact number off the top of my head.

But point is if you were to go in front of, you could be assigned any one of those 30 or so judges and on top of that is you could end up with 30 completely different results from any one of those judges on any given day. Which means even though there is a family law, even though there are facts to the case you could present those same facts and those same laws to each one of the judges and end up with a totally different outcome. It could be very much in your favor, it could be very much opposite of your favor. The point is, is that you don't necessarily know what that judge is going to do and how they're going to rule. Judges are people and they have certain things that they like and they dislike. I call them bias.

You might go in front of a judge ... A judge might not like your lawyer. And because they don't like your lawyer for whatever reason, they rule against you. Or it may be the case that a judge doesn't like what you're wearing. Or it could be the case that a judge tends to think that the mom should have primary custody and most of the time, so that's how they think about decisions. And so even if you're the father and you should probably have primary custody and maybe even during the divorce you had temporary custody of your children, the judge might say, "Well I think it's better for the mom," and therefore the mom gets it. And you're like, "But wait a second." You're left totally confused 'cause in your situation that just wasn't the way things are working or it could be the exact opposite. Is the judge might say, "Well I think the father should have primary custody." Or a judge might say, "Hey, you know what. My default position is that whether or not it's good or bad, custody should be split 50/50."

And you are SOL as we say is, "shoot out of luck." If that is the bias that your judge has even if it's not appropriate for you. Then the fourth thing that is very important is that judges often make decisions on things that are totally irrelevant. What do I mean by that? Well it's interesting, I don't know if you ever watched one of those ... I'm going to switch from family law to the criminal law for a second. But if you ever watched television and you ever watch one of those shows that's like what happens after a big jury verdict in the courthouse. So if someone gets committed for a crime of if someone gets acquitted from a crime and they go and interview the jurors and they'll say, "Juror #7, why did you say that that person was guilty and you gave them the death penalty?" And the juror will go, "Well I knew when he walked in that room he was a bad guy." Then the interviewer will be like, "Well but, there was this evidence that says he wasn't even in town the day of the murder." And the juror will say, "Yeah, well. He must have done something. That's why he's in front of here, right?"

You're just like, well wait a second. That has nothing to do with the facts of the case. Unfortunately in the family law world judges can often be the same. Judges can walk in and they'll say, "Oh, well I saw this piece of evidence and therefore I'm just gonna vote this way and this is how we're gonna split things." Or if you have something super complicated they might not wanna think about it and so they'll just make a decision based on what feels right to them. Whether the facts support it or not. Some judges ... You know, I caution myself when I was talking about pay increase or don't get paid enough. Some judges, becoming a judge is pay increase for them. That's why they became a judge and they get paid more to do less work often times. Or at least to have a shorter workday. 'Cause their legal careers weren't necessarily going the way that they thought they would.

You just never know the motivations of the judge that you're going in front of. And you never know what is going to resonate with them. Maybe they grew up in a single parent household and therefore they identify with one parent more than the other. You might not know that going in. So the decision they come to might not make any sense to you or to anyone but it is because it is what is it, because that's what you signed up for and that's what that judge believes. And so it's something that you really need to think about. So what's the point? The point is this, is I have nothing against judges by any means. That's not the point of this episode. But the point is this, is that most cases settle out of court. There's a reason for that is because there's a lot of things you can solve and come up with most of the time a semi-reasonable agreement. If you settle out of court.

Now it's not always going to be the case, but your position shouldn't be, I'm going to fight this out and I want to take this all the way to trial and that's the way things are going to be. It's not necessarily going to beneficial to you. Going to court is a gamble and it can be a very big and very expensive gamble. I was speaking with someone just yesterday and I said, "Look. You, instead of going to court, you may as well just put $100,000 on the roulette wheel." Your odds are going to be better then ... And having a good outcome rather than you going in front of a judge." Because you're just taking up ... This person was very close to a settlement agreement but just couldn't quite get over the finish line and they're now thinking about spending a bunch of money on an expensive trial and I was like well, that's a waste of money. Just go to Vegas, gamble it, put it on black and call it day because that's basically what you're doing in this case rather than just agreeing to something that may not be perfect but it pretty dang reasonable from what they had said.

So you need to really be careful about whether or not going to court is good for you. Now sometimes you're in a position where you have to. It just is the case, your spouse is unreasonable and everyone's gonna be better off unfortunately if you go to court. My point only is that you should not use that as your default position. Because court is a very dangerous game that you're playing and very expensive gamble that you may be making. Judges are the ones who are in charge of this process when you're in front of a court. And judges aren't always going to consider all of the things that you have in your head in terms of becoming a final, in terms of becoming a great arbitrator towards your case. Some judges out there are great but you need to really understand what's going on in your local court and really understand what judge you may get assigned. And how that judge feels about certain issues and how they generally like to rule on certain things and if you're going to be in a good position or a bad one by going in front of this judge.

0195: Shawn Leamon Interview with Attorney Christian Denmon, Florida Family Law Attorney Jan 15, 2019

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Thank you for listening! Find a transcript of this episode below.

Chris: Hey everybody, it’s Chris Denmon with Denmon and Pearlman out of St. Petersburg, Florida and today I’m with Shawn Leamon. Did I pronounce that right Sean?Shawn: You got it right.Chris: All right. Shawn Leamon, who is a certified divorce financial analyst and the host of a podcast which is Divorce and Your Money. Which is how I found Shawn and we’re continuing our series today. We’re interviewing tangential professionals in other professions that can help our clients get through the divorce process in the best possible way and help them move onto their lives in the best possible way. And so Shawn, you’ll be talking to some of my future clients and my current clients. And take it away, what did I miss? What else about you should we let people know?Shawn: No, I think that’s great. I’m a certified divorce financial analyst. I get to work with people all over the country. My podcast, Divorce and Your Money is probably the largest divorce podcast that’s out there. I like to help people as much as possible because you know, divorce in many aspects, financially, legally and emotionally as well, is a very complex process for someone. So I like to help at least in my small segment where I can. Chris: Absolutely. And yeah, the same idea, right? So when I’m a lawyer and I do lawyer things, and my clients are going through the process, they’ll come to whether it’s for a figuring out a budgeting issue, or whether it’s a tax issue and I’m not an expert at that. That’s not what I know best, and I turn to people like you to help me answer those questions, and a lot of times, it’s easier for me to just introduce my clients to somebody like you, or you to you because then you can help them get the answers they need better than I can do it. And you and I were talking before we started, and I know you from your podcast. I also know you because I was looking up an answer to something that here I am, the divorce attorney, I didn’t know the answer, and you had answer it on a very detailed, excellent blog post that I was able to get the answer for me and then share it with my client. And you’re able to help that way. Chris: So, thank you for taking some time to chat with me today. I appreciate it.Shawn: Thanks for having me. I’m glad to be here.Chris: With my clients, I have two different phases where I think they need help and I’m going to kind of just mention that and let you kind of help educate in any way that you can. But I know that I have clients that right at the very beginning of the process, in anticipation of a divorce, or in anticipation really of a separation where they have one household and they’re getting ready to potentially move into two households, and they have to figure out how to budge for it. Plan for it and make the right decisions with their finances. That’s kind of one bucket where my clients need help.Chris: And then the other bucket is when it’s all said and done, you know as a divorce lawyer I think we’re good at getting things done and then we shake hands and then we release our clients into the wild, right? And sometimes we have clients like maybe a needy spouse who for the last 20 years, she hasn’t really done any of the budgeting and I don’t want to leave them … I don’t want to shake hands and let them go off and have them ill-prepared. And that’s another, that’s an area where I think that they need help. Is that kind of your experience?Shawn: Yeah. You know I think the main focus for anyone who’s thinking about divorce is already in the process, really boils down almost to two things. The first is knowing what you have. The number of conversations where people don’t know they have a retirement account, or you need to know … I mean, if you have a house, you need to know what it’s worth and have a good sense of that. If you have a mortgage, or if you have other debts somewhere. If you have credit cards. Regardless of whether you were the spouse who took care of the finances, or has never seen them at all, your first step is just to figure out, “Well, what are we splitting up?” And from that comes the second question which is, or a second answer that one should know the answer to is, what do you want?Shawn: The other problem or other area I see everyday is that, well you know you have a house that’s worth a certain amount, you know you have these retirement accounts, you know you have maybe a little credit card debt or whatever the case may be, but you don’t really have a clear sense of, “Well, what do I want when this process is over? What will I need to live?” Most of the people, at least that I deal with getting divorced, I like to say, “Look, you’re going to probably die these days at 100 years old. So if you’re 50, you’ve got 50 years of thinking and planning to do. What are you going to be thinking about over the next two or three or five decades? And are the decisions that you’re making right now, splitting up your family and your assets and everything else, are these really kind of what you want for the long-term and are they working for you?”Chris: Sure. And I mean, how do you help people engage in that conversation when … Because divorce is so life-changing, right? People tend to identify with what they’ve been for an extended period of time, especially in a long-term marriage. And then now, sometimes, am I right, would you say that sometimes they don’t even know what it is they want yet? Shawn: Yeah, it’s a great point. And one of the things that I try and tell everyone, which is very hard to do in practice, but actually makes a lot of sense is to depersonalize what you’re going through when it comes to making your decisions. Or the way I like to phrase it is, pretend like you’re the CEO of this process and you’re the businessman, businesswoman and what would just a rational person looking from 30,000 feet think about and would recommend for you and your situation? Meaning, if you’re going through a divorce, there’s any number of overwhelming emotions that make it hard to have any sort of clarity of thought. You know you have got a million questions, you’ve got to figure out this process, let’s forget all of that for a moment. Let’s just pretend that we take … Or the way I do it, or the way I speak about it with people, is let’s just take at least the asset part, the financial part. Let’s just put it all on a piece of paper. Your name doesn’t even have to be on it. It can John Doe or Jane Doe. What would you recommend Jane Doe for their future given what they have right now? And what do you think makes sense?Shawn: and once you kind of remove the you from it, I know it sounds weird, is to take yourself out of this process, but when it comes to making decisions, if you make emotions kind of cloud your judgment, that’s where people can go very far astray or end up making pretty poor decisions. Once you kind of depersonalize it a bit, you can really sit there and just treat them as X’s and O’s or numbers on a sheet of paper and say, “Hey! This person that I’m looking at on this piece of paper should probably do X instead of Y. Or take more of one asset or ask for more support, or ask for less support. And would be better off if we did whatever.”Shawn: And it becomes actually, for most people, a lot clearer pretty quickly once they take the me out of it.Chris: Sure. You got me thinking of the scenario where a party, they’re emotional to a home, and maybe the home is too big for the party by themselves,. The kids may be out of the house, the home might be too big already. But then you may have a, one of the party’s who are really attached to the home and they want to stay in the home but maybe the numbers don’t make sense and maybe if they were to keep the home, not only would they be keeping assets that are not going to generate any money for them in the future, I mean not really, unless you sell the house, it’s not a liquid asset.Chris: But they’re also, their standard of living is necessarily going down because they’re not going to have enough cash flow to do what they want to do. You know, so that’s a … Is that something, is that a problem that you … Is that a scenario –Shawn: That’s one of the most common things that I have to deal with on a daily basis. And the way that I teach people to think about it is before you decide what you want, start with your expenses. And so, the divorce process for most people, as painful as it is for most, is really only going to be a year or two of their life. And as I said earlier, you have decades to think about. Well, let’s start with, what is your life going to cost after this divorce? What is your mortgage payment or rent going to be? How much are you spending on cars and telephone bills and everything else. Once you kind of know – or your kids as well. Once you know what your expenses are, then you can start to say, “Well, all right, now I know at least how much income I need to stay even.”Shawn: And also you can say, “Well how much am I …”, and then you can start thinking about bigger questions like how much am I going to need for retirement or whatever else. But if you start with your expenses, things like that house that you have an emotional attachment to, you can see very quickly and very clearly that in many cases it’s not affordable. And you’ll see, like wow, you know if you’re spending … I’m just going to make up a number but if you’re spending 3,500 dollars a month on a house, and your income for a given year after a divorce is only going to be 5,000 dollars a month, it becomes very apparent that you don’t have much money for anything else.Shawn: And, once you just kind of map out – and when I say map out, I do things very simply. I take a blank sheet of paper and a pen and I say, “Let’s just do some simple math. How much is the house? How much is the car? How much are you spending on kids, clothes, going out, travel, vacations, whatever?” I just take a pen and a paper, nothing fancy, and just start writing down these kinds of things. And then once you have that kind of rough number, doesn’t have to be precise, you can start to think about is, well what is that really look like for me and start making the right decisions based upon that.Chris: Right, that’s a great way to do it, because … I think a lot about the stay at home mom because we represent a lot of stay at home moms and they just … Their responsibilities for the family have traditionally been kid-related stuff, maybe. Maybe the stay at home mom hasn’t traditionally had dollars and cents responsibilities. I mean, they’ll go out there and they’ll do the work and they’ll go do the shopping and all that stuff. But they may not be doing the budget and then it comes time, they have to now figure all of this out and they also have the great unknown of what their income is going to be when this is all said and done, and you know alimony will often play a big part in that.Chris: But if you don’t know what your expenses are, how are you going to know what is the money that you need outside of just saying, “We’ll get you the most amount of money possible.” Which is great, but it’s not really a great way to solve the problem. You just gotta know what you need and then try to get that and maybe some more. And I like your idea of just putting pen to paper with it because sometimes there are lawyers will do things that become a little cumbersome. Spreadsheets and it doesn’t really work. Sometimes simpler is better to help people, especially with so much else that’s going on in a divorce. So many other things to worry about, you know?Shawn: Yeah. There’s a lot to say about that point, particularly with the stay at home moms. I also work with many and there’s a variety of issues oftentimes with the stay at home moms. Sometimes a lack of confidence. I said you have to be the CEO of your divorce process. I’ll always say, because I talk to stay at home moms every day, everywhere, and I’ll say, “Hey, so, while your husband was working, who took care of the kids? Who took care of the house? Who took care of every other daily detail that happened?” And it was always them. And they have all of these skills in terms of managing a very complex life. They might not feel like they do, but they’ve been doing it for 10, or 20, or 30 years. And this is just one other challenge in that process. But they already have everything they need. They just need a little bit of guidance in terms of focusing that same energy they’ve had for a very, very long time.Shawn: And, as part of that, sometimes it’s, you know when I think about things that you need to do when it comes for planning for the process. Well, one big question is, we talked about the house. Sometimes I’ll say, “Well, let’s take some action towards it and find out. If you want to stay in the same neighborhood, why don’t you contact a real estate agent. See what houses are available in your neighborhood. You know particularly if your kids need to stay in the same school district.” I’ll say, “Go check out some apartments in the area. Are any of them feasible? Find out what the rent is for something that you could live with.”Shawn: It might not be the same, but sometimes just gathering some basic information that’s free, no cost to anyone, to call up a realtor and say, “Hey, I’m about to get divorced, or I’m in the divorce process, can you show me what some options are in the neighborhood?” Or, walking to the apartment building or driving over to the apartment building and say, “Hey, what’s a three bedroom in this area cost?” And those types of little steps, not very hard, and you can also start to crystallize, and you can say, “Hey, you know what? This three bedroom apartment actually could really work for me for the next few years while I get back on my feet.” Or you might say, “You know what? I’m priced out of my neighborhood. I need to think about what the right option for me in the long term.”Shawn: And it gives you the ability to confront reality head-on. Good or bad or anywhere in between. But at least you come through, or you start the process with some solid information so that you can make the right decision when it comes to going to mediation or talking with you or whatever else. It’s just you have a real, clear picture of what the future might look like, instead of just guessing and hoping for the best.Chris: a little bit of information goes a long way on the path. So that’s a great idea. And do you find yourself encouraging people to do that early in the process? In the middle of the process? When?Shawn: Yeah, it’s a good question. The answer is as soon as you can. You know, divorce is challenging of course, to understate it. And, you know, it’s not an instantaneous process even to get to the point where the D word gets dropped, much less serving papers and everything else. So, you know, it really depends. What I say is, the sooner you can figure these things out, the better. But, I have people who, and I actually am talking to someone in just a few minutes, who has to, has their proposals, their settlement proposals on the table. Right? And so the question is, well, does this make sense or should I be trying to make some adjustments? And some of the things that we’ve already discussed are going to be exactly that.Shawn: It’s like, “Hey, did you check to make sure that you’re going to be able to afford the house? Or be able to move to another place? Or be able to refinance? Or whatever the case may – or your spouse be able to refinance? If you go with this proposal, and if not, we gotta get these kind of details done now, so we make sure that we’re not walking you in to something that is not ideal for you.”Shawn: You know, the sooner you can plan the better. For the people that I get to work with before even papers are filed, I’ll say, “This is awesome. You’re going to go into your consultation with an attorney, with almost everything prepared, and your attorney is going to be able to take this job and do everything for you and I won’t need to talk to you again.” Other people, if you’re kind of still in the middle of the process, figuring things out, it’s okay, if you’re in the middle, so long as you’re starting to formulate that picture of what it is that you’re really aiming for.Shawn: I mean what I’m trying to say is that, if you don’t have a goal, you’re not shooting towards anything and you really need to have a clear sense of what your goal is for this process, otherwise your attorney, you aren’t as empowered as you could be to help them get to be where they need to be when this process is over.Chris: An awesome way of framing it. And we, again as an attorney, we’re always, we’re goal oriented. We have a process from the very beginning of getting them to conceptualize our clients and focus on their goals. But it can be easy to focus on goals that are more related to the divorce process and maybe kids, and sometimes, for however, it works out, because maybe our clients when they’re coming in, some of the issues we’re addressing at the beginning are more emotional. Sometimes the financial goals outside of minimizing my alimony payment, or maximize my alimony award, which isn’t very concrete, it isn’t very helpful. But outside of some of that stuff, we tend to maybe miss some of those financial goals from the very beginning. Whereas, if we have them from the very beginning, makes it easier to get people to where we need to get them to.Shawn: That’s exactly right. And you know the only thing that I would add to that is also if you have the goals, I say this all the time, is, once you have your goals written down, now’s a great time to talk to your attorney and make sure that your goals are reasonable. Because, you know, I see people who might say, “I don’t want to pay a dime of alimony and no child support and I want 100% custody.” And you’re like, “Your spouse is a decent human, even though the two of you don’t get along. That doesn’t seem like a reasonable case. You might want to think about those a little more.” But, you know, it’s having kind of a sense of what that is, so you know, my job, the way that I do view my job is to make them prepared for you.Shawn: And to, so that whatever time you spend with the client is maximized and you can do your job more effectively. You as the attorney and as the people listening are the people in charge of this process. And you know I’m sort of a support person, but you know, I want to make sure that what you’re doing and what I’m doing can kind of help them get to the best position possible.Chris: Absolutely. Before we go Shawn, do you have any like any tips to help somebody, whether it’s the husband or the wife, when they’re in the beginning of the process, maybe they’ve contacted me, maybe they haven’t, and they’re considering separation. And so, from a financial perspective, do you have any tips to help somebody who is thinking, “Hey, I think I need to get … I think for my own emotional wellbeing, I think I need to be in a separate household from my spouse. Obviously I’ll talk to a lawyer about things like custody and stuff like that. But what do I need to pull off from a financial perspective? And how do I get there?”Shawn: Yeah. I think the two things when it comes to separation. Some of the things that we’ve already discussed, but one is your credit report. Knowing what’s on your credit report. I have clients who make 100,000 dollars a year. I have clients who make 100 million dollars a year. You’d be surprised what’s on a credit report, and there are always surprises. And so just kind of knowing what that is. And then also, knowing what your expenses are. I mean look, when you’re separating, we’ve talked about expenses before, but, your income is going to be the same more or less, whether you’re married or in the separation process. The income part is semi-fixed. The expenses part is now all of a sudden doubling. And so you need to really understand is can you afford that? And what that looks like. Do you have enough savings? Do you have enough income? Do you have enough whatever the case may be that you need to separate.Shawn: And actually might add a third thing to that, is, separation can have other effects on the divorce process and so I always encourage my clients before taking that separation step, to talk to someone like you. You know, consultations are confidential. It’s not like, you know I have some clients who are afraid to step into an attorney’s office. I say, “Look, attorneys are confidential. No one’s going to know that you’re there. No one’s going to sign, put a billboard up in town that says, ‘They met with Christian’. It’s just so that you can understand your situation, the implications of what you’re doing and making sure that you ultimately protect yourself and don’t unintentionally run afoul of something that might come back to hurt you later.Chris: Absolutely. That’s right. I can help them with the legal pros and cons of separating, but you can help them with the practical if you separate, can you do it, and how will you make it work? And what’s it going to cost? Shawn, thanks so much man. I had a great time. I really appreciate you taking a few minutes to chat with me and ultimately chat with my clients and some people that are watching this just for advice. If somebody needs to reach out to you, what do they do? How do they do that?Shawn: Yeah you can visit me at divorceandyourmoney.com, and there’s a podcast by the same thing if you search any podcast player called Divorce and Your Money.Chris: Sounds pretty simple. Shawn, thanks.Shawn: Yeah.Chris: I appreciate it.Shawn: Thank you, Christian. Take care.

0194: Know Where You're Going in Your Divorce Jan 08, 2019

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Shawn Leamon: I want to start this episode off with a quote from Yogi Berra, in which he says, “If you don't know where you're going, you'll end up someplace else.” I think that's a good theme, particularly as we're starting the year, and thinking about the divorce process, or regardless of where you are. I want to discuss a little bit about setting goals.

Shawn Leamon: It's the beginning of 2019, at least when I record this. There's almost 200 episodes of the podcast, and 100,000 people listened in 2018. One of the goals I have, at least for the podcast, is to help as many people as possible go through the divorce process, and make sure that I can do it in an affordable, cost efficient manner for most people. One of the ways that I can do that, is having regular coaching calls, and for some people working in greater variation, and more hands on with others.

Shawn Leamon: When it comes to the divorce process you have to have your own goals. A lot of times goals, particularly at the beginning of the year, come up in the context of, oh well what's your new years resolution? Are you going to lose weight, or exercise, or stop smoking, or whatever the case may be? Ideally I should say, you should attach something specific to that. If you're trying to lose weight, it might be, I need to lose 15 pounds.

Shawn Leamon: Well the goal setting process, is equally relevant when it comes to your divorce, and understanding what you should be doing, and understand really what you want out of the process. That way once you set your goals for the divorce process, both you, your attorney, your divorce team, myself, can help you get in the best way possible, to the place that you're aiming for.

Shawn Leamon: As I said, we started with the Yogi Berra quote, “If you don't know where you're going, you'll end up someplace else.” One of the most important things you can do during the divorce process, is really set your specific goals for the things that you want. There's a concept out there called smart goals. Smart goals stand for smart is an acronym. Smart stands for specific, measurable, achievable, relevant, and the t is time bound. If you look up smart goals, if you type that online, you'll find the acronym.

Shawn Leamon: You should be setting up smart goals for your divorce, and in terms of the things that you want, when it comes to the divorce process. A lot of times I might speak with you, and either you're still in the planning phase, or you're midway through the divorce phase, or even you're right at the final settlement proposal, and I'll say, "Hey, that's all well and good, but what do you want?"

Shawn Leamon: One of the issues is, sometimes you don't know what you want. You want what's best for you, and what's best for you really depends on what your dreams and desires are. When it comes to the divorce process, it's temporary. It can feel overwhelming, I get that. It can be a lot on your plate, and of course it is, but at some point for some of you in a few months or others in a couple years, whatever the case may be, this process will be over, and you will have moved on with the rest of your life.

Shawn Leamon: Well, what do you want the rest of your life to look like? What does it look like? Of course this divorce and your money, so what does it look like financially for you? Are you receiving support? Are you paying support? Are you working? Are you retired, or planning to retire in a few years? Are you living in the same home? Are you living in a different home? Are you starting a new career? Are you traveling more? Are you doing all these other things in life, that you'll have to ultimately try and figure out in the best way possible about yourself?

Shawn Leamon: And so one of the things I say, regardless of where you are in the divorce process is, don't necessarily ... Or one of the starting points, is actually start after the divorce. Sit down with a pen and paper. If you ever see me in person, and I get to see a lot of you in person across the country. One of the things I carry with me, 100 percent of the time, is a notebook and a piece of paper. My notebook, actually I love blank white sheets of paper, and bring a pen with me.

Shawn Leamon: What I do is, I want to make sure that I always keep on top of my goals. I keep them very simple. But I sit alone, sometimes on a plane, or a coffee shop, or in my office, and I make sure that everything is written down. Sometimes my goals are just for the day, what do I want to achieve that day. Sometimes they are, what's going on that week, that month, that year, and in life. That way, at least when I'm presented with different options, I can say, "Hey, does this fit within my goals, and ultimately what I think I would have liked to do with my life?"

Shawn Leamon: When it comes to the divorce process, you should be thinking in many ways the same thing. Fast forward, the divorce process is over, you're envisioning you, and your kids, and your family. Even thought it's split, how do you want things to look, from a financial perspective, or a custody perspective, if you have children that you're going to have to be dealing with custody issues with? Do you want partial parenting time? Do you want split evenly? Other things to think about, how do you want to plan for college? Is that's something that's relevant and important to your kids? What does that look like, for you specifically? What do the holidays look like? Or all of those types of things, and types of questions.

Shawn Leamon: Once you start at that end goal, you need to have it clearly written down. When I say clearly written down, you should be able to email me, or send to your attorney, or send to a friend for all that matters, and say, "Hey, here are the goals that I am achieving." You've got to have it written down, specific, and posted up somewhere that you won't lose it.

Shawn Leamon: Then when it comes to your team, and the divorce process, you can say, "Hey, here's the stuff that I'm shooting for, can you help me get to those points as part of the divorce process?" You're sitting down with your lawyer, one of the things you should be doing, is saying, "Hey, Mr. or Ms. Attorney, here are the goals for my life. How can I, during this divorce process, get there the best way possible?" Your attorney might help you say, "Well, I think these are pretty reasonable, and we can get you there."

Shawn Leamon: I just had a lunch with someone in person, and we were looking at her goals. It was very clear, I was like, "Look, you're goals are going to be fine, so long as you just do these two or three things, you should be able to achieve your financial goals, and move where you want to move, and live the rest of your life the way you want to live it." Other times, I'll hear from you and I'll say, "Hey, what are your goals for your divorce?" I'll say, "You might need to adjust some things." Or, "Hey, you're going to actually probably need to get a job." Or, "Hey, you might really need to think about it, if you can really afford this house, if you're planning on saving for retirement, and whatever the case may be. Maybe there's another property in your school district that might be okay, so you can keep the kids in the same school, but you might need to move, so your monthly expenses are lower, and therefore you can actually afford a good life in the long term for you."

Shawn Leamon: We start with your future goals, and I think that's a great place to start, particularly at the beginning of the year. It doesn't matter where you are in the divorce process, but knowing what you want is crucially important.

Shawn Leamon: The other thing that's very important, is knowing your goals. Once you know what you're aiming for, knowing the best way to get there through the divorce process, is also something that is very relevant.

Shawn Leamon: The approach can be very different, depending upon who you are. And so sometimes you are in a situation where perhaps there is an abusive spouse, and you don't really have the option of sitting in a room with them, and mediating the divorce in a very civilized manner, pursuing like a collaborative divorce process, and so you have to take a tougher handed approach, to get through your divorce in the best way possible.

Shawn Leamon: Other times, in many cases, you and your spouse are actually very civil with each other, and you know that this divorce process is coming, and you can still talk to each other. Basically, your job should be, hey lets minimize the fees, lets minimize the damage, lets not make this more difficult than it needs to be. Maybe we can work out 70 percent of this on our own. We still might need attorneys for another 30 percent, or a mediator to help us for this last 30 percent. That's okay, but I think we can get to a pretty fair place, at a much cheaper price, than both of us fighting it out in an adversarial divorce process.

Shawn Leamon: For you, that might be the goal for this process, and the approach that you take. For others, it might the case that you end up in front of a judge somewhere at the end of the day, deciding upon where the judge is the one, who after many months and potentially years of fighting, litigating, and everything else, the judge is the one who has to ultimately make a final decision. Sometimes that's the approach that you have to take too for this process.

Shawn Leamon: To the extent possible is, you need to think and set goals for your divorce process. It could be as simple as, if you haven't chosen an attorney yet, you can say, "Hey, here are my goals in the choosing of an attorney process. This is what I want. Here are the goals when it comes to how I want to interact with my attorney. Here are the goals for how long I hope this process takes or doesn't take. Usually it's as little time as possible, but for some there's reasons to extend it out a little bit.

Shawn Leamon: There are different ways to set those goals. For everything in this process, take a sheet of paper, map them out, make them very clear, look up the smart goals framework, and really understand where you're going in this process, and what you want to achieve from it, so that everyone is on the same page, including you. You need to know where you are going. If you start the year off right with your goals, and where you want to go, you can set up every action that you take from this day forward, to make sure that you're doing the actions that fit within your goals.

Shawn Leamon: I'll give you an example that came up recently, this is a family friend who got divorced. They didn't have very clear goals for their divorce process, and they ended up spending 10's of thousands of dollars on who got what silverware, which was a waste, it went to the attorneys, and many years later they regret the way that they handled that divorce, but neither of them went in with the appropriate goals, and process to think about them.

Shawn Leamon: One of things you should be doing, is just making sure you always stick to those goals. You do that, you'll put yourself up for ... I'm not going to say that this process is ever easy. I'm not going to say it's always going to go in the way that you think it will. It rarely goes the way that you envision. But my objective for you, is to make sure that you're putting yourself in the best position possible, to achieve all of the things that matter most to you, and to do it in the best way possible.

Shawn Leamon: And so, start this process, start this year, regardless of where you are on the divorce process, either making your goals or reviewing your goals, to make sure that you are on the right path.

0193: Understanding Divorce Settlement Negotiation Tradeoffs Dec 05, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

When negotiating a divorce settlement, you need to understand what trade-offs you're making, and make sure that you're keeping the big picture in mind. When it comes to your assets, and the debts that you have in your financial life and your marriage, they are what they are. When you're thinking about your divorce settlement and your future, your goal, really, is to figure out what the best combination of assets is for you, so that you can move on with your life in the best way possible.

You need to be realistic and reasonable, and make sure you're negotiating for things that make sense for you. One of the biggest areas I see people having trouble is not being accepting of what the status quo, what today, what their actual financial picture is, and not confronting head-on what you actually have. I understand everyone wishes they had more money, more cash, less debt, higher income, or whatever it is. What I see, oftentimes, in the divorce process, when working with you, is that you might feel, or at least pretend to negotiate as if you have a higher income than you have, or as if you have more money than you actually have. I'll say this on calls all the time, it's okay to advocate for yourself and ask for a little bit more to that you get ... you have wiggle room. But at the same time, you need to be realistic about your financial picture is and what your future looks like, and be real about how that's going to work for you in the future.

One of the first steps when it comes to negotiating and thinking about your divorce settlement, and preparing and structuring things the way that you want to do, whether you're working with a lawyer, you're doing it yourself, going through the litigation process, doing collaborative divorce, or whatever, is you really need to understand what you have and what you're splitting with your soon to be ex-spouse. Not only do you need to know what exists, be it a house, a mortgage, rental property, investment accounts, cars, a business, all of the basic stuff that we talk about a lot on the show, but you need to understand the value of those things with clear numbers and specific. It's not enough just to say, "I have a house, and I think it's worth $400,000." That's not right. You need to do your homework and figure out either with a real estate agent, or an appraisal, or whatever the case may be, whether it's $400,000 or whether it's 375 because of something, or maybe it's 437,000 that you could sell it for. You need to understand the value of that. You need to understand, if you have a rental property, if you have a business, what is that worth? Because knowing that value could serve as a big impact on your divorce process.

When I comes to knowing the worth of things, you need to know what that means in total. One of the questions I'll ask you is, I'll say, "Hey, let's break down the major assets. Let's figure out what you have. We'll subtract out any debts." But what is your total marital pot worth? Is it $325,000? Is it 3.2 million dollars? Or more than that? Or somewhere in-between? Or somewhere less? Whatever the number is, you need to clearly understand and keep in mind the total value of all of your assets as you're thinking about your divorce settlement.

And then, from there, you also need to understand and have a clear sense of what support obligations you'll either be paying or receiving. This is an important point and is relevant to the total calculation of stuff that you're splitting up, and you need to understand that number. I'm going make you some simple numbers just for the sake of discussion on these two point; the total value of your assets, and then also the support discussion, to illustrate an example for you.

Let's say the total value of all of your assets is $200,000. That means any houses, bank accounts, retirement accounts, everything totals up to $200,000 between you and your soon to be ex-spouse. Now, let's say, on top of that, you're expecting to receive some sort of financial support obligations. For the sake of discussion, I'm going to assume that you're going to receive $5,000 a month for five years, which means $12,000 a year, times five years, is $60,000 in support. Now, if you think about that, that actually adds to the total amount of money that you are splitting up, because not only are you splitting up $60,000, but on top of that ... I'm sorry, not only are you splitting your $200,000 in marital assets, but there's also an additional $60,000 on top of that that you need to keep in mind.

Now, why is that such a big deal? Well, that's a big deal because when it comes to negotiating a divorce settlement and thinking about your options, is that you need to understand that regardless of what you do, there's always benefits and disadvantages and potentially trade-offs that may work better for you, that you haven't considered or are still thinking about.

Let's take this example: Let's just say, since you're going to be getting $60,000 in support over five years, on top of your share of the marital assets, what would I be thinking if I am doing a coaching session with you, or if we're working more in-depth together? One of the first things I would think, and just on my mental checklist, is all right, you're going to be getting ... Let's just say you're the person receiving support. You're going to be getting about $100,000 in assets that you're splitting, because you have a $200,000 pot, so you're going to split that in half, roughly. It varies, but let's just say for simplicity sake, you're going to be getting about 100,000, plus you're going to be getting about $60,000 in spousal support over five years. In total, you're going to be getting $160,000 from the marital pot.

Well, when I think about that, I say, "Okay, well, what ... Do you want all of that now? Would you like to take all of that upfront, or do you not mind getting support over the five years?" One thing I might say, particularly if you don't want to be reliant upon your example-spouse, or if you need cash upfront to get yourself back on your feet, I might say, "Hey, you know, the $100,000 is pretty easy to split because it's mostly coming from a retirement account or something. That extra 60, well, what if we made it $50,000 instead of 60, because you're going to it all upfront, and we just took out extra, and maybe your spouse keeps the house and just cashes out some of equity to pay you off." That's an option that I just kind of made up off the top of my head.

But the point is, sometimes you need to think about, well, you know what, it's actually a better scenario if I get more money upfront and take that money now, rather than delay the divorce process some. Excuse me, not delay the divorce process, but take that money over time. And your spouse actually might give you less money for that effect, but it could be worth it to you. You're no longer waiting on those monthly payments to clear every month. Who knows what happens. And on top of that, maybe you get some spending money upfront, because you moved to a new place, or moved to a new town, or are in school for a little while, and that additional support upfront could be very useful to you.

Also, the converse is true in terms of thinking of your trade-offs. Let's stick to this example. For some of you, if you know you've never really created and stuck to a budget before, and you think you're going to blow through all of that money upfront, maybe it's wiser for you to take those payments monthly, that $1,000 a month each month for the next five years, because it will help you plan and budget better. Someone like me, I know myself well enough, oftentimes that would be a much better deal for me personally, because of the way that I think about money and spending, and cashflow, etc. Sometimes, it's more valuable to kind of have that stable payment coming, rather than if you're one who is potentially tempted by having a lot of money sitting around in a bank account. Then it's better off if you take those payments over time, and it might be worth it for you.

Now, conversely, if you're on the other side of things, and you're the spouse making these payments, it can be very important and very well worth considering, do you really want to write a check every month for the next however many months you're going to be paying support? Or maybe you can buy out all of that support upfront, or a large chunk of that support upfront from your previous savings, be it retirement or from cashing out of a house, or otherwise, because that will give you the advantage of, maybe, having more flexibility later.

I'll give you an example. I have a friend of mine here in Texas who basically said, "Hey", to their spouse, "I'm going to give you 80% of the assets that we have, in exchange I'm not going to pay you any ongoing support." But this person, in particular, is an entrepreneur, and he knew he could made the money back, and so he did. He say, "Hey, you know what? It's worth it for me just to pay all my support obligations. Now, you'll be comfortable and you won't have any issues, and I'm not going to be writing that check every month. And then, I'll just have to find a way to re-earn and rebuild myself financially in that case."

If you're the one paying, it can also be a win for you to think about some of these trade-offs, because you can actually clean up your financial picture a lot by not having this ongoing monthly bill, or reducing that monthly support payment substantially over time, just by understanding some of your trade-offs. You have options and leeway in terms of thinking about, well, maybe a lump sum is better for all parties involved. Or maybe it's not. Or maybe a partial lump sum is better, where we front-load support a little bit; get more of it upfront and less later. Maybe there are other considerations where we structure a deal so that everyone ultimately is better off. You could have higher monthly payments for the first two years, and then a slightly lower the next two years, or something like that, so that everyone ends up in a better position possible.

When you're thinking about your finances, and your picture, and your divorce, and your settlement, I want you to look with a little bit more creativity, in terms of solutions. Understand, all right, well, here are all these numbers on a sheet of paper that you have. There're going to be assets and debts and everything else. What's the best way that we can come to an agreement using these assets? And what are some ways that I might not have thought about before, in terms of getting a benefit from these assets and things that we need to do? Something for you to think about.

And regardless of where you are in your divorce settlement process, if you haven't started, or you're in the middle of the process, what I want you to do is a little bit of homework. You have a picture in mind in terms of who's going to get what, and how those things are going to be split. Well, what I want you to do is come up with some alternate scenarios where, financially, everyone ends up just about the same, but you're getting a different set of assets and debts, and splitting it a different way. Come up with one or two or three more scenarios, or I can help you come up with those scenarios, as well, but different ways to think about your picture. Some of the best settlements that I've had the pleasure of working with, are literally that exercise, where you think you got to do things one way, but let's say, "Hey, let's split things a totally different way, and let's just see how that looks, and see if everyone is agreeable for it." There might be something to it that would satisfy everyone involved.

Just by, at least, doing the exercise, whether or not you ultimately stick to the path that you're on, or consider some other ones, you can often come up with some really useful solutions that you may not know existed. But, that's the nature of the divorce process. It's a complicated process. There's a lot of different moving parts, and sometimes you just need to use those moving parts and the complexity to your advantage to come up with something that's more creative than maybe you considered before, and actually it might be something that works better for everyone involved.

0192: How to Handle Stock Options During Divorce Nov 27, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

A subject that's been coming up a lot recently in coaching calls is stock options, and many of you have them and you may not realize it, or you do know they exist, but you're trying to figure out what you should do with stock options. And stock options are actually a pretty complicated subject. They're one of the most complicated financial instruments even when the divorce process isn't involved. And when you add divorce on top of it, trying to decide what you do with the stock option, whether you keep them, split them, how do you negotiate for them? They're tough.

I remember when I was much younger, I still have on my bookshelf an old book about stock options and it is one of the hardest to read books that I've ever purchased because they are a very complicated subject. But because it's the podcast, I'm going to, of course, simplify it for you and try and make it as easy as possible. And I want to give you an overview of stock options, what to think about with them in the divorce context.

Some of you may have them and not realize you have them. Some of you might not have them at all, and which point this episode might just be some general education on stock options, or maybe you know someone who's a friend who has them. But I'm going to go through kind of what they are, how they work, why they're important. They're one of those assets in divorce that if you have them, they can be very, very valuable. In some cases, I've had cases were stock options are the most valuable asset in the divorce and other times, stock options can be worthless. They are a very fascinating subject in that regard.

But let's start with the basics. And by the way, in my book, Divorce And Your Money, The No Nonsense Guide, I have a short chapter on stock options that explains what these are and why you need to be thinking about them. What stock options are, I call them stock options or employee stock options, it's a form of compensation and basically, it gives you a right but not an obligation to buy a certain number of shares in a company, in the company that you work for usually, at a specified price.

Now, what does all of that mean? It basically means that stock options give an employee the benefit or give employees the opportunity or the ability to benefit when a company goes up in value. Stock options also give an incentive for an employee to stick around at a company rather than leave. And the way it does that is it says, "Hey, you get a certain percentage or you can buy shares of stock at a discounted," I won't call it a discounted price, but you can get stock in this company and appreciate in its growth.

And if you are or your spouse is an executive in a company, but don't have to be an executive, can be at many different levels, but most of my clients are generally executives or pretty high up in a company when they think about options. You can have these stock options there and it says you're a part owner in a company, basically. There's some specific mechanics to it that make them a little bit more complicated than just being a normal owner, but they basically give you ownership.

And if you're at a public company, in a company will usually have thousands of employees, it has a stock market ticker. You can look up the price for it. I know lots of people who have stock options at public companies. They're a very common form of compensation. Actually, even when I was working at my very first job out of college, I was working at JP Morgan and they gave stock options basically to everyone as a form of compensation and to keep you at the company longer. You get a big bonus of stock options.

And then if you work at a private company, and so this is the private company side is actually pretty complicated when it comes to stock options, but if you work at a private company like a tech startup. At the time of this recording, I'll give you an example of a big name. Uber is a tech startup that you've all heard of. Well, most of their employees have lots and lots of stock options that could be very, very valuable. They are a sign of ownership in the company and it's a big form of compensation for the company.

And so at the end of the year, or at a certain time during the year, a company might say, "We're gonna give you part of your bonus in cash and part of your bonus in stock," and those stock are usually in the form of options. Now, the reason options are tricky is because of something called vesting. I'm not going to get into all the mechanics of vesting because it's just so complicated and it really varies on a case by case basis. But just because you have these stock options doesn't mean you have ownership in the company yet. As I said, they're still called options.

And because of this term vesting, it's basically just says that you don't own, you don't get a full value of your options just because you have them. You might get your options awarded to you the longer you stay at a company. So if you got $100 worth of stock options, well maybe only $10 have value today, but if you stay at the company for five years, you earn the rest of that money and you get the full value of those options.

So the point is that, I know this is difficult to grasp, but stock options are a piece of ownership in a company. They have a vesting schedule, they call it, but they vest and so you earn that ownership usually the longer you stay at that company over time. And if you leave the company before your stock has vested, that stock becomes useless.

That's not a point we're going to get into for the sake of this episode, but oftentimes in negotiations, when you're thinking about stock options and what you should do with them, if you or your spouse or whomever is going to leave the company with unvested stock, then that will become useless to you. Something very important to think about as well.

So whenever you have stock options, you're going to need to know that they exist and also you're going to need to know their vesting schedule. Now, that's just some basics on the stock options. Now, the real question is, what happens in a divorce context? The real thing to understand in a divorce context is the way you treat stock options in divorce varies substantially on one factor.

And that is, if your spouse is working for a private company, a company that's not listed on a stock market, whose shares don't trade every day, then the way you approach stock options in divorce is very different than if your spouse works for a public company. If your spouse works for a company like Bank of America, or Walgreens, or Best Buy or Walmart, or any number of big companies, there's also tons of publicly traded companies you may have never heard of before, but you can go online, you can look up their stock symbol, and you'll see a specific price for the share.

If your spouse works for a publicly traded company, then stock options are much, much easier to deal with. If your spouse works for a private company, then the stock, or you I should say, then the stock options are much more complicated in terms of how to split them in the considerations you should be thinking about as you try and figure out what to do with them.

Now, I was going to start with a public company example. So when I worked at JP Morgan, they gave stock options a lot. And basically, you can go online and you can type in, you can go to Yahoo Finance or Google Finance. You can type in "JP Morgan stock price" and you can look up the exact value of what each stock option is worth. And so if I had 10 ... So as of the time I record this, JP Morgan stock is worth about $100. Very easy. It's good for our math.

Let's just say they gave me a 10 shares of stock as part of my bonus. They actually give much, much more than that, but let's just say they gave 10 shares of stock as part of my bonus and options. And so I have 10 shares of stock at a stock price of $100, which means I have $1,000 worth of stock options. Well, if you are trying to figure out what to do with those stock options, that is a pretty easy thing to figure out because one of the biggest challenges with any asset is trying to figure out what it's worth.

Well, with a publicly traded stock, you know what the stock price is, you know how many shares of stock you have, and you just do some basic math and you come up with a value. In my case, I've got 10 shares of stock at about $100 a share. So I've got $1,000 of stock that I would have to split. Not much fancier than that. The only thing that's complicated is usually the math isn't that easy, but it's not much harder than that.

Where the complication comes is if your spouse works for a private company, and I've actually had this discussion on calls quite a bit, is the difference between a private company and a public company. Just so that you know, is private companies aren't listed on a stock exchange like the New York Stock Exchange, or the American Stock Exchange, or the Nasdaq or whatever. And so the value of the company isn't traded every day. And if you want to ... You can't just look up how much the company is worth.

A public company has a share price and you can buy and sell the stock every day, but the good thing about a public company is you can always look up what the market value is at any given time. With a private company, it might just be a few people who own it, might just be the employees who own it, or might just be an investment firm that owns it, and they won't necessarily tell you the exact value. And so when you're dealing with private company stock, the considerations get much, much more complicated.

The reason is you don't know how much that stock is worth. The challenge with private company stock is valuing it. Private company stock, I'm not going to get into all the mechanics of it because it's way beyond what we could do and talk about in an episode that's useful to you, but one thing to consider, one thing that's weird about private company stock is it has no value until someone gives it a value. Now what does that mean?

Well, you can have private company stock. You can have 10,000 shares of private company stock that's worth one penny a share. So in theory, it's not worth that much, but what happens is with private companies, they might raise money from investors, in which case that penny a share that I talked about could become worth, all of a sudden, $2 a share instead of a penny a share. And so what was almost worthless before is now worth millions of dollars.

Or if that company gets bought, or if that company does any number of different transactions, those stock options, while initially on paper aren't worth anything, could become very valuable in the future. Private company stock is very weird in that regard. And when we think about it in a divorce context, it's one of the areas that causes a ton of complication because of this very issue. I had to work with a lot of attorneys on it, a lot of clients directly, and educate you that private company stock is a very complex area and thing to deal with and you have to be careful with it.

Let's just go through quickly what the difference is between private and public company stock in a divorce context and how you think about what you should do with it and try and come up with the best decision for you. If you have a public company stock or the company's traded, you can look up its value, you know the value. The value is clear. There's no real reason to split the stock and go through the complicated splitting process for stock options. It's usually not worth it.

Best thing to do is the person who has the stock keeps it. The person who doesn't have the stock gets credit for it, and you give up a little bit more of another asset to make up the value. But that's it. When it comes to ... It's simple. You treat the stock like a car. If you really want part of a publicly traded stock or you really wanted to split it, here's what I always say.

You can open up an e-Trade account, or a TD Ameritrade account, or a Schwab account or whatever and in five minutes, purchase that publicly traded stock. It's a very easy thing to purchase and there's no reason to add thousands of dollars of fees and complication trying to split publicly traded stock most of the time, or stock options most of the time. It's just not worth the effort. There's so many simpler ways to deal with it than splitting it.

When you're dealing with a private company stock, that is a very tricky area because we don't know what the value is. And so in general, most of the time when we're dealing with private company stock, you split it in half or you split it in whatever proportion you're splitting the assets. The reason is private company stocks value can fluctuate so quickly, so instantaneously that if you don't take your half the value, you could end up losing out quite a bit.

And there's definitely a lot of complications around it because it depends on how big the private company is and the mechanics of splitting the stock, et cetera, et cetera, but what the current value is of that stock. But many times, I see cases where the spouse who has stock options says, "Oh, these are worthless. We don't need to worry about the stock options. Let's just move on." And in theory, at the time they say that, they actually might be true, but the reason they have stock options is because they could have a lot of value later.

And so at this private company, it's a tech startup or whatever. I had a case like this this year where the person works at a tech company, the stock options aren't worth very much, but all of a sudden, a big investment firm in the middle of the divorce process, thankfully, comes in and says, "Hey, we're going to buy this company." And all of a sudden, those stock options which were worth a few thousand dollars at best, became worth hundreds and hundreds of thousands of dollars overnight and became a much bigger issue.

It sounds weird because it is, but that's also how stock options work, is oftentimes their value can fluctuate substantially, particularly with private companies where they're fast growth, valuing them as very, very difficult. And so the easiest way to get around that is by just splitting them evenly and therefore no one can lose out.

I'll give you another example, is if you are, say your spouse have stock options and the stock options are currently worth $1,000. Well you say, "Oh, I'm going to skip the stock options. I'm just going to get my share in the house and move on." Well, what if two years from now those stock options are worth a million dollars? How are you gonna feel about that? It's such a weird example, but that's how stock options can work.

Now also on the opposite side with stock options, this is something to consider, is they can also lose value. So you could say, "Actually, I want my share of those stock options," and it turns out the company goes bankrupt and they're worth nothing. So that's also a consideration as well. The point is there's a lot to think about if you have stock options. And if you're in the divorce process, you need to make sure you know that they exist and you really need to think through all of the different scenarios that could happen with these stock options so you can figure out, well, what is the best course of action for you later down the line with the options?

There's a lot of creative solutions that you can come up with for this very complicated asset. I hope I gave you a basic overview. It's not an intuitive subject and it's tough to explain and tough to explain clearly, but give you a basic overview of stock options. And if you have them, it's definitely an area, whether you have them or your spouse has them or you think you have them, it's definitely an area where you need to raise a red flag, make sure everyone has clear information as to exactly how they work, and from there, there's a lot to be thought about in terms of the divorce process, in terms of stock options and what the best strategy is for handling them.

It's an area that most attorneys, actually, I know aren't super well equipped to handle. Some are. There are definitely a handful of great attorneys out there who are super financially savvy who know the ins and outs of stock options better than me, but the average attorney off the street, certainly not. And actually, even many financial advisors, even good ones, don't know how to handle stock options well. And there's only a handful of people who really have good expertise in the stock option world.

If I were actually going to ... I'm going to leave you with a nugget. I love to give you resources and things to check out. One area or one person who's very, very good with stock options is a certified financial planner, a CFP. If you or your spouse have stock options and you're thinking about what to do with them in divorce, of course you can call me.

But there's also local certified financial planners who can help you think about the calculations, walk you through all the ins and outs of stock options in your specific scenario, and help you figure out, what are the best courses of action given this highly complicated, highly unusual asset that actually, a lot more of you have and you don't even realize that you have it or maybe you have an inclination that you have it but haven't really given thought to it in the divorce process.

So you can get a CFP, certified financial planner, contact me, or make sure you have an attorney who is very savvy in terms of the ins and outs of stock options because they are one of the most complicated areas for you to think about.

0191: How to Refinance Your House in Divorce Nov 06, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode I want to discuss refinancing the house in the divorce process and some considerations that you need to be thinking about as part of this process. Now, whether you're the person who's going to be keeping my house or if you're the person giving it up, there's going to be some information in here that is going to be helpful for you. Another thing I just want to mention right off the bat is if you go to the store and you get the quick start guide, I have 9 or 10 episodes dedicated just to considerations regarding your house in divorce and there's a lot of great information in there. It's a whole section in the quickstart guide and if you haven't checked that out, definitely go and get it because only some of the episodes are here available wherever you listen to podcasts. But the vast majority of them with a lot of great information a part of the quickstart guide.

Now, what we're talking about in this episode is house refinancing. It's a very common topic that comes up on coaching calls almost every day. And what we're talking about is basically transferring the name of the house from one person to another but there is a mortgage involved. I'd say 9 out of 10 times you have a mortgage on a house, some people in their houses outright, but most of the time there's some sort of outstanding mortgage balance. And the question is how do you actually get that mortgage out of one person's name and onto another. And so the house could be in both of your names, both you and your spouse's name and you want to put it in just one person's name afterwards or it could be in one spouse's name and they want to transfer the home and the mortgage to the other spouses of name.

And the reason I want to talk about this topic is there's a lot of considerations and things you need to be thinking about today and implementing today to make sure that you're thinking about your future and you're thinking about the refinancing process properly because there's a lot of common knowledge that I share on pod or on the coaching calls that people don't really know and so I want to bring that up for all of you who are listening. I'm going to use some examples to clarify what is important in this process and to give you some nuggets to think about. So I'm going to use the example of a husband and wife couple and the husband or the house I should say, is in both of your names. Both the husband and the wife's name's on the house and guess what? Both the husband and the wife are on the mortgage.

Let's say you have some young kids and so it's going to be better you think for one of you to keep the house. We're going to use the stereotypical example of the mom staying at home with the kids or at least wanting to keep the house with the kids and having primary custody. So the husband in this just sake of example, I deal with everything in between, but for the sake of this example we're going to assume the husband wants to transfer the house and the mortgage to the wife's name and how that process is supposed to happen. And actually it's not a simple process. I'm going to get into some further descriptions on the wife or the mom in this case because it's going to be relevant in terms of whether or not you can refinance.

What you do when you refinance a mortgage is you're basically getting a new loan out, paying off the old loan and then just the new loan remains in place. So I'm going to give you an example. I'll use some very simple math, keep it easy. Let's say you have $100,000 of a mortgage on your house and both of your names, well we're going to give it out. In this example we're giving the mortgage to the wife and so as the wife or soon to be ex wife and soon to be custodian with the kids, that person has to get a new mortgage and they are going to have to refinance and pay off the old mortgage and get the new one. And so with the new one, they are probably going to have to get a mortgage for about $105,000.

What I mean is there's going to be some fees and some expenses associated with getting the mortgage, but you have $100,000 outstanding. The wife is going to have to go to a mortgage lender and see if she can qualify and get a mortgage for $105,000. They'll take out $5,000 in fees and then what you're going to do is you're going to repay the mortgage with both your names on it. So it's going to be a zero balance. And then the wife is just going to have a mortgage in her name outstanding. Now, there's a lot to cover in that relatively straightforward example. So I want to dig into some details and some things that you should be thinking about if this is going to be an element of your divorce process.

First and most importantly, and this is where almost everyone goes wrong that I talk to and doesn't think about, is if you're planning on refinancing a mortgage and just putting one person's name on that mortgage, that person needs to be able to qualify mortgage on their own. It means that person needs to have enough credit and enough income to qualify and fully pay off that new mortgage. Many people do not have this point. If you are trying to take the house yourself, you're going to need to refinance and get a mortgage in your name or if you're trying to give it to your spouse, you're going need to refinance and get a mortgage in your name. Often times the spouse who wants the house will not qualify for it because you not only need good credit, but also you will need income to prove that you can repay those funds.

So if you are a stay at home parent and have not had income and your only income is going to be potentially some form of spousal support, you may not qualify for refinancing the house or if your spouse has bad credit and they're about to take over the house, they may not qualify to refinance the mortgage in their name only. And if you are a bank you want to be certain that the person who's going to be taking this refinancing loan out can actually pay for it. Look at the time, well, you are married and both people's names are on the house. If you stop paying, the bank has the option and will not just the option, they will pursue both of you aggressively until they get their money back and there's two people that they can pursue and two people's assets and income and everything else that they can over.

Now, if you're making it just one person, well the risk to the bank is much higher because now there's only one person whose assets and income they can go over and try and take and so they're going to want to make sure that if that one person is only on the hook that that one person can repay for things. But if you don't, if you're a stay at home parent and you don't necessarily have a clear source of income for the foreseeable future of your refinancing time, then it is very likely that you won't be able to refinance the home and therefore won't be able to take your spouse's name off the home and therefore either going to have to sell the home or figure out another arrangement. There's a lot of risks to that and a lot of things you need to think about and conversely if you're on the other side of it.

Let's talk about the other side because I work with a wide variety of people in a wide variety of situations. Let's say you are the person who wants to take their name off the house and so your spouse is the one who's going to have to qualify for the mortgage. Well, there are some issues with that because if your spouse is unable to qualify for a house refinancing, you are putting yourself in a world of risk and potential liability if you leave your name on the house and the mortgage. And so here's what I'm getting at. Let's just say you come up with some great divorce settlement, you think you're pretty good and as part of the divorce settlement you write in my now ex spouse is going to be responsible for any future mortgage payments on the house, but we're not going to refinance it we'll leave it as is and keep both of our names on it.

Well, let's just say three years down the line something happens and your spouse misses a mortgage payment and then maybe starts missing two mortgage payments or three. All of a sudden you're going to be getting calls about mortgage payments being behind, your credit's going to fall substantially and you're going to put yourself into a lot of risk and liability for this outstanding mortgage that you should have refinanced or at least gotten rid of one way or another down the line later. And so there are some things for you to think about. I almost never encourage people to leave their names on the house if they're not living in it after divorce because it just presents too much risk down the line. But oftentimes you have to make sure your spouse can qualify for a that refinancing.

Now, I've talked a lot about some of the circumstances and situations and considerations as you think about refinancing your mortgage in divorce. The good news is now that you have a little bit of a handle on it, there's an easy solution to this whole thing that all of you, if this is going to be a question in your divorce, either you or your soon to be ex spouse needs to do this sooner over later. It's not hard. You contact a mortgage broker or a mortgage lender and you see if you will qualify for refinancing or you could say prequalify for a refinancing. You can't actually do this process in most cases until the divorce is signed. But you can find out if this process is actually feasible for you before that. And what do I mean? You do this, you contact a loan company. I don't endorse this company. I don't know much about them, but they advertise a lot so Quicken Loans.

Quicken Loans I see their ads all the time. You can contact Quicken Loans and say, "Hey, here's the situation. I'm about to get divorced. I want to make sure I can qualify to refinance for refinance my mortgage and put the house in my name as part of this process." They do this thousands of times a day with tens of thousands of people, they're very used to this conversation. You can go to them and they'll ask you for your information, your income, etc. And they'll say, "Hey, you can be approved up to X amount of mortgage." And so you can take that amount to them and they might say, "All is good. Yeah, I think this will work out for you. You're looking good." Or they'll say, "Actually, you don't meet the qualifications at all for what we require and this probably won't work out for you." And you have to go back to the drawing board or you go to the company that originally did your mortgage and contact them.

Whoever you want to contact, it takes an hour or two or whatever, but you apply and just say it's for preapproval to see if you can do this thing. You don't have to take it, there's usually no fee just to preapprove yourself. It's an hour or two of your time, very straightforward and if you meet the information they'll send you a document that says, "Yeah, you prequalify for this refinancing. Here's all the terms, here's the fees, everything laid out." It's usually on a couple pages and you're good to go and you know what your options are, whether or not you pursue it or not. Or if you go and you find out and you say, "Hey sorry, given the house, given your credit, given your income, given whatever their issue may be, you don't qualify for this refinancing." Well now you know your options in terms of the divorce process or if it's your spouse who's the one who needs to go through this process.

I would say, "Hey spouse, look, I'm happy to give you the house, but you need to just make sure that we can actually refinance it. Just go call this company or call one of these three companies to make sure that this process is doable." And so there are things to consider and you just go and get an answer. If the answer is yeah, you could refinance this mortgage, then you know the answer. If the answer is no, you can't refinance this mortgage, then you know that answer too and you can make an appropriate decision in terms of all of the other issues in your divorce process and really come up with a divorce settlement. The worst thing that I see, and I see this happen many times down the line, is when you have an idea in your head or you're deep in the negotiating process and you book a coaching call or whatever else and you say, "Hey, here's what we're going to do. Here's what we're thinking about. How does this sound?"

And I'll say, "Hey, this whole transferring the house and refinancing isn't as simple as it sounds. Have you been pre qualified yet? Have you contacted a mortgage broker?" And you'll say, "No." We'll say, "Hey, why don't you just take the next two days, I'm going to give you some homework, go contact a mortgage lender and see if this is actually feasible." And many times you are very surprised with the answer or what is required and you have to really adjust what you're thinking about. Now, it's not all bad news either. Maybe you find out that everything's on target and you're okay and you have the definitive answer and you're good. But the sooner that you can figure out and contact someone about a refinancing the better. The other thing I want to just toss out there is there are also other creative solutions when it comes to refinancing a house.

I've worked with some people where we can partially pay down the mortgage with retirement funds as part of this process and refinance a chunk of the mortgage and if you do a chunk of it, you're in good shape and can refinance or can come up with a creative solution. It really just depends on individual circumstances. One of the reasons I do this podcast is this stuff is complicated and oftentimes there's many different ways at looking at things and that's some of the things we get on coaching calls or with the people I work with on a longer term. But you could come up with some pretty interesting solutions down the line for things that you might not have thought about when it comes to the mortgage. And so the other thing when it comes to a refinancing, and as I said you should really contact some mortgage firms or some banks that provide mortgages and explain the situation.

I promise you all of them have dealt with hundreds or thousands of divorces each year and are very familiar with the circumstances involved in the moving part of the process. There's nothing scary about it, it's just taking the time to do it. But you could be in a position where, well, let's just say using $100,000 mortgage that we were talking about before, they could say, "Hey, given your part time work and your income and whatever else, maybe you can only refinance $40,000 of that mortgage." Well maybe that's sufficient because if you have $60,000 on other assets, you might be able to pay off with using a retirement plan or something else. There are ways to structure it so it's tax advantageous if you know the laws and work with an accountant or work with me or whatever else, the ways to structure a creative solution so that, all right, well we're going to take $60,000 from this retirement account.

We're going to refinance for $40,000 and that way we're going to get rid of this mortgage, you're only going to have a $40,000 mortgage outstanding. Everyone's going to be happy, no weird liability, etc. We've done that time to time with people as well because that's just the solution that makes sense. It's really about and this podcast is about and what I'm here to help you with is understanding your options, understanding the complexity involved, understanding that some of these decisions even though conceptually they're pretty basic, refinancing a mortgage actually in practice, they have a lot more complications to them that you don't often think about. And I want you to be informed and really understand, hey, I need to think about this decision further and really make sure that whatever my spouse and I decide is really the appropriate financial decision and feasible financial decision for both of us and puts us in the best position possible.

And making sure that you're not forgetting anything that is a very important as part of this process. And refinancing the house in theory very simple, in practice very complicated. And it's been coming up every week on calls and so I want to make sure you're all informed as to how much there is to such a very, in theory, simple decision.

0190: How to Get Access to Your Financial Information in Divorce Oct 26, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

Most of the information on this podcast is focused on leveling the playing field in divorce and making sure that if you aren't the person who was in control of the finances, that you make sure that you're able to get the information you need so you can create and structure a reasonable settlement for the rest of your life and ultimately, to put it bluntly, so you don't get screwed, as they say, in the divorce process. As part of that, and part of the coaching calls that I do every week, one of the recurring themes is that many times you don't have access to essentially information that you'll need so that you can make an informed decision about your financial picture and what the best things are for you to do.

One of the things I want to discuss in this episode is a few ways to get the appropriate financial information in your divorce and make sure that you have a clear and full financial picture. This could be for many reasons and many situations this comes up. Sometimes your spouse is deliberately hiding assets and hiding money from you or misstating your financial picture. That's a very common one., sometimes in a small way, sometimes in a big way. Sometimes it could be the case that your spouse made a mistake and forgot about something. Or maybe you have a complicated financial picture and there are just a lot of different moving parts that you have to keep track of. Or maybe you just didn't really even know what existed and you're just trying to get a sense of what actually do I have. You're just trying to figure out the whole thing and get some information.

What I want to do in this episode is go through some specific tactics to help you get a clearer financial picture of what you have and what you need so that you, and your attorney, and perhaps me if I'm working with you, you can make those informed financial decisions or at least the things in this episode, I want to help you start to figure out where to look so that you can start digging and start getting on the right path financially. I'm going to go through five tips, tools, tricks, whatever you want to call them, in order to help you get financial information in your divorce if you don't have direct access to it otherwise. Five things. The first one is ask. Second is check your tax return. The third is use your memory or any clues that you may have. The fourth is a subpoena. Finally, the last one is using a forensic accountant. The forensic accountant is going to be last because it's a combination of many of these things.

Let's jump in and go through these tactics. The first one, as I said, is you just need to ask. Sometimes if you ask the question, "Hey, can you provide the latest account statements for this retirement account, or this mortgage, or this whatever?" either through your attorney or in writing in some manner, your spouse will do so. I always encourage people to ask in writing with any specifics you may have because it's good to have a record of times if your spouse doesn't comply. It's nice to have a record of all of the times you've asked and all of the times they have not provided full and complete information because that will look bad to them later on. You always start with an ask. Asking is easy, but it doesn't mean you're going to get a response. We're going to go through the other areas and eventually some of the ones that will mandate that they provide a response.

The second thing is related to getting your access to your tax returns. One of the very common things I hear actually usually multiple times a week is that your spouse or that a spouse basically forged a signature on a tax return, and you're unsure if the information in the tax return is correct, if you have some additional liability you might not know about, if the taxes are reported correctly. You never signed them yourself. You don't really know what's in there, and you're worried about the contents of the tax report. The other thing that's relevant about a tax report is that assuming that everything is in order on those tax forms that you file, tax reports are one of the most useful areas to get a sense of what assets that you have. Here's what I mean. If there is a bank account somewhere that you might not know about, let's just say at Bank of America because it's the largest bank, I think, in the US, and if there's a bank account that you don't know about and it earns a dollar in interest over the course of a year, guess what? That bank account and that dollar of interest should show up on the tax forms. If it does not, there are some bigger issues. Oftentimes you will find a lot of assets you don't know about if you're used to knowing what you're looking for on a tax return.

Here's the challenge, of course. We're talking about getting access to information. The challenge is that how do you get your tax reports if you don't sign them, if you don't have a copy of them, your signature was forged, you don't have them handy laying around, and your spouse isn't being forthcoming about them? Actually, it's pretty easy. If you go to the IRS website, they have something called Get a Tax Transcript. If you type in get your tax transcript or transcript from the IRS on Google search or online, the IRS website will pop up, and they have a form you can provide to get a copy of your transcript and your taxes. You can get, I think, three to five years worth of your tax returns. They will provide either an electronic copy or a physical copy in the mail of those tax returns. Of course, you have to fill out some information to get those tax returns, but the point is if your name was signed on a joint tax return, it's a record that you can get from the IRS as a government service. It's free, and you can get copies of your tax returns by requesting that transcript.

The other thing that you can do is IRS offices are everywhere across the country. I've had many people do this. You can go to your IRS office, identify yourself, and request copies of the tax transcript. They will provide those for you if you go into the office and ask them in person. This is one of the most important ways. I think I say it on every call where someone asks, "Well, where do I get this information? I think I don't have a full picture of our accounts." I always say, any forensic accountant, any lawyer will ask this question as well, is start with the tax returns. From there you will be able to have a lot of clues that show up in a myriad of ways on the tax returns.

I could talk about this point for a while. Even with my personal taxes, I filed my taxes. Because I've traveled quite a bit and I have a few different addresses, I missed a document. I didn't sent it to my accountant, and I filed my taxes, and the IRS rejected them. I was like, "Oh, well what's going on?" They said, "Well, you're missing this form." What happened is I had to add in this form. I went and dug it out, and I added in this form. Then I resubmit my tax. The point being is all of these items that you might be looking for, these accounts, these interest retirement accounts, contributions, other investments, whatever, will show up or should show up on your tax form somewhere, particularly if you're looking for outside assets or outside investments that you don't know about. If they don't show up on your tax form, then it might not be there or your spouse is substantially cheating on their taxes, in which you have a lot of other considerations to think about. But let's move on.

You can get copies of your tax transcript. That's important. The third thing on my list is use your memory. If you have any inclination of accounts you may have had, be it investments, be it real estate, be it a bank account statement, be it something you remember coming in the mail, it could've been a credit card, it could've been anything, any account firm that you've seen, or have a clue about, or have thought of, try and jot down as much information about those things as you can because ultimately you might actually find a way to get access to that information and use those clues or breadcrumbs just from memory. Oftentimes you know more than you think you will. Then you're going to be able to use that information to help your attorney, me, your accountant to know where to look, and know who to ask, and where to start digging. Anything you can dig up by memory, or if you remember an email, or an account, or whatever, make a list of those and collect just as much information about them as you can because they're going to be useful for the next point, which is point number four.

This is the big one. This is the subpoena. I'm sure if you've ever watched a television show that talks about legal stuff, you've heard the term subpoena. Subpoena is a very important word and legal time. Basically it is a legal document that says that the person receiving it or company receiving it needs to act in a specific way or provide specific information. I'll give you an example of what this is. Let's return to Bank of America. Let's just say, "Hey, I remember some sort of account from Bank of America that we had for a few years. I don't have the account number of information on it, and my spouse isn't providing the information willingly." You can say or your attorney can say, "All right, well we're going to issue a subpoena to Bank of America to provide all of the records related to an account with this person's name on it." Bank of America will be legally obligated to provide that information to you. It's not always mandatory, but it's 99% of the time mandatory. You can fight a subpoena, but that only happens in very rare circumstances.

I have a case now where there is a real estate under question. One of the ways we got some information from them is we had to subpoena the building management company and everyone who was connected to this real estate. They were legally required to provide certain records about who owns it, what percentages, what financial information there was about this building. They provided that information, and now we have it and can make much better decisions during the divorce process. If you don't reply or your spouse doesn't reply to the subpoena, subpoenas come with a wide variety of potential punishments as part of the case. It can include fines, jail time, and many other things depending upon your state and what's going on. Subpoenas are a great way to force or require access to information.

The reason I put subpoena fourth on this list, and this list is in a particular order for a reason, is if you've asked about some accounts and maybe you get some information, you look at your tax returns and you get a little bit more information, you use your memory and you get some more information, with all of those clues if you're starting to put together this puzzle, it's big pizzle and you're starting to put it together piece by piece, ultimately a subpoena is that tool that attorneys can use to force you to get a much larger section or pieces of that puzzle, particularly when you know where to look. If you don't know where to look, your attorney can't subpoena, I guess he or she in theory could, Every bank in town or every financial institution in the country, we're talking about tens of thousands, if not hundreds of thousands of different places.

What you need to do is be able to say, "Hey, I have this breadcrumb that I saw on my tax return on page eight. I have this breadcrumb from my memory that we had an account here at one point. I have this breadcrumb from whatever else that I think we need to follow up on, and there's more to the story here." Let's take that information and leverage a subpoena to see if we can get some more information out of it and get a more complete picture of those things.

Then the last thing on the list after subpoena is a forensic accountant. I have episodes on the podcast with forensic accountants. I have a large series in the store in the Quick Start Guide, as it's called, with information about finding hidden assets and how to use a forensic accountant. A forensic accountant is one who is an accountant whose expertise is taking all of these breadcrumbs and putting together a coherent financial picture. A forensic accountant can look at page 17, or I'll use an example. I have some clients with tax returns that are 180 pages because there's lots of supporting documentation. They have complicated financial pictures. A forensic accountant can take a 180-page tax return and look on page 79, line 16 and say, "Hey, there is something to this account. We need to do a lot more digging. Let's track down more information about it. Here's what I know from this account, and it's probably a big one."

A forensic accountant is specialized in doing those types of analysis and basically taking all of these breadcrumbs and putting together a clear and coherent picture to the best of their ability to help you track down all of these assets that may be missing, hidden, or some other way financially questionable in terms of things that are going on. It's a very specific niche of accounting that requires a good deal of expertise. It's not cheap, so one of the things I always say before hiring a forensic accountant is, "How much money do you think is realistically missing?" because I've seen forensic accountant bills go up into the tens of thousands of dollars easily, particularly when there's a lot of complication and it's hard to get things. If you have hundreds of thousands of dollars or millions of dollars at stake, then oftentimes it is well worth the investment. Think of all these things as an investment. If you have to invest some money to get a lot more money, then it can be worth it. A forensic accountant will ask for all of these tax returns, all of the things that you remember from memory, things from a subpoena. They might help your attorney craft an appropriate one. All of these things a forensic accountant, a good one, will ultimately put together a comprehensive picture for you when it comes to finding that money or assets that are missing.

The thing about this process, and I want to step back for a little bit, if assets are hidden, it's not a guarantee that you're going to find them. Even if you do find them, it's not a guarantee that you are entitled to those assets. It can be a complicated process, and there can be a lot more to it. But you do need to oftentimes know that these assets exist. The good thing I will say in the modern world, unless your spouse was a drug dealer or had a cash business, you can find a trace of assets everywhere from an email, from a wire transfer, from a public document, from whatever. There is a transaction record of everything. The question is how much it's going to cost you to get access to it, and is it really worth it for you. If your spouse is being forthcoming, and you think they're being forthcoming, and everything seems to make sense, you won't have to go down this path of getting a forensic accountant, and issuing subpoenas, and everything else. This process takes a very long time to put together, sometimes years, when it comes to all of these things. You have to really wonder and think about what the right decision is for you.

But if your spouse is not being forthcoming and there are a lot of things, and questions, and concerns that you have, I know because I talk to you every day on coaching calls, you ask me these things. Sometimes I'll talk to you and say, "Hey, that sounds a little suspicious. I think there's more to it. Let's dig in further." I say this as well. I try and be as honest and frank with you as I can. I'll say, "Look, from what you're telling me, I understand that some stuff is missing or this sounds a little bit questionable, but I don't know if it's worth it emotionally, financially, time-wise and everything else to drag on this process given what else you've told me to date. Maybe it's not the best idea to pursue this path." Whatever the case is, you have to think about what's right for you. I just want to give you the tools and the information so that you can think about these things and ultimately make the appropriate decision.

Just to summarize quickly again how to get access to information, I talked about five things. The first is you ask. Second is get copies of your tax return, and specifically your tax transcript. The third is use your memory. You probably know a lot more than you give yourself credit for. Fourth is a subpoena, which is issued by an attorney. You can ask your attorney about that and if it's appropriate for you. Then finally is employing the services of a forensic accountant. For many people, that may be an essential item. I've seen some great work from a forensic accountant that's just unbelievable, particularly where there is a lot of money and financial complications. Forensic accountants can be the essential part of this divorce process.

0189: How to Use Mediation to Resolve Your Divorce Oct 16, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode I want to discuss mediation. It's a topic that I haven't talked about in a little while, and mediation is very important for many of you. You end up hearing your attorney talking about mediation, or you end up going for it, or you're preparing for mediation, or you've just heard about it and you want to know what it is, what it's like, and whether it's right for you.

One thing I will toss out there is, mediation for many of you can be a very useful way to resolve many of the issues in your divorce. I want to go through a little bit about how it works, and why it exists, and provide some information in terms of whether mediation is something that you should consider during your divorce process.

Now, the reason people pick mediation, or even consider this mediation process is, it's one of the tools, not the only tool. But, it's one of the tools, and one of the most common tools people have to avoid going to court. Anything you can do to avoid going to court, and avoid going to trial, is generally speaking beneficial for you. The goal is, in the divorce process. I mean, aside from getting out of this process as quickly, efficiently, and in a best position possible for you and your family. The goal of this process is not to end up in front of a judge.

Now, for some of you, it's inevitable. I deal with a lot of cases, probably a higher percentage than most end up going in front of a judge just because the issues that you're dealing with are so contentious that, and you can't come to a satisfactory resolution. But, for those who can, you don't want ... You want to use, or at least consider mediation as one of your options.

I've talked about judges and courts before on the podcast, and just the one thing I'll say about it is, imagine a stranger who knows nothing about you, making in just a few minutes, the decisions that'll affect you, your assets, your kids, your support, for the rest of your life. They determine that as just a stranger. They're in charge of making some pivotal, life decisions. They don't know you, they don't necessarily care about you. You're one of hundreds or thousands of people they have to decide upon each year, and they don't spend a lot of time with you, and they're not really getting to know you. Is that how you want your divorce to be decided? That's why people don't want to go to court, and mediation is a very useful process for some of you.

Now, how does mediation work, what is it like? What is it? Well, mediation is basically the process where you, your spouse, and a neutral third party, usually a neutral attorney, or retired judge, or professional mediator. Helps you work through the issues in your divorce, and helps you come to a point where you can find middle ground, or some sort of reasonable compromise on the key things that you're thinking about, and trying to decide in your divorce.

What do I mean? Well, there are several things that we could consider and think about. You have issues in your divorce. Some things might be very clear, right? I'll just use a very simple example I see all the time. You and your spouse both probably have separate cars. In most of the cases, nine times out of 10, it's not really a dispute over who gets what car. If you drive a truck, I don't know why I said truck, I don't. But, if you drive a truck and your spouse drives the Toyota, the Toyota Corolla car. Well, you probably will keep the truck, your spouse will probably keep the car, and we move on. Nine times out of 10, or probably 99 out of 100 times, that's not going to be a contentious issue.

But, something that might be an issue is, how much of that retirement account are you really entitled to, or is your spouse really entitled to? What's the appropriate amount of support to consider? How much parenting time, and how should we work out some of the custody issues? Or, whatever other issue or consideration you may have on the table, mediation could be a way, a place, a format for you to resolve those issues. As I said, there is a neutral third person in the mediation. At a minimum level it's you, your spouse, and that neutral person talking it out.

Perhaps in a conference room, or in someone's office, to figure out these discussions.

But, alternatively, there are more ways to ... More formats to mediation. You could both have attorney's to help you during the mediation process. That would mean five people involved. You, your attorney, your spouse, your spouses attorney, and the mediator. Or, you could ... There's different options. Sometimes mediation takes place in the same room, where you book a half a day, a full day, several days, even a week to sit and negotiate the issues around the table.

Now, for some of you, being in the same room with your spouse probably is not going to be the most productive way to reach a resolution, so they have options for mediation where you're in separate conference rooms. What happens is you and your attorney, or you by yourself, are in one conference room. Your spouse and your spouses attorney are in a separate, or in another conference room. During that process your spouse ... Or so, the mediator might come into your room first. The mediator will come in and say, "Hey, what do you care about, what do we need to work through?" Let's say you go through your top three issues. Your mediators say, "Hey, you know what? I think on this point number two, you're not being totally realistic. You need to have a little bit of leeway here. Can you give up something?"

You'll listen, you'll say, "I don't know if I want to do that." The point being is you'll come up with some sort of resolution and move on. Then the mediator will say, "Okay, I'm going to go to your spouses room and let's see if we can bring these issues closer." The mediator will leave, go to your spouses room, and the spouse will ... Will say, "Hey, what's important to you? Can we work towards these kind of things?" Then the mediator will kind of go through and they'll say, "Oh, you know, you're doing well here. You might have to give up some more," whatever else. Then they might come back to your room. Or, if you're doing it all live or in the same room, whatever the case may be.

Then, the other thing to think about too with the mediators is, so their goal is as a mediator, to get you to a resolution. That is the whole point of mediation. Sometimes even the court mandates that you have to go to mediation before going to trial. The goal is to resolve as much as you can, as soon as you can, without going to court. The mediator also, if you have a good mediator. As I said, they're often a retired judge, an attorney, or a professional mediator. Part of the things they will do aside from being very good negotiators, and helping you come to a resolution, is that they will also make sure that you're doing within the bounds, understanding what's in the bounds of the law.

I've heard a mediator say, "Hey, that issue that you're thinking about." Be it, let's just say you're asking for a particular amount of support. The mediator might say, "Look, I've been a judge for the last 20 years, and now I'm a mediator. The courts in your county won't give you that much support, so you need to lower your expectations, and lower that amount. Let's go to something that's reasonable, within the bounds of the law."

Or, that judge might say, or that mediator might say, "Hey, I don't think you're asking for enough here. I think it's reasonable for you to ask for more." Something like that. Just, the overall point of this is to say is, the mediator is there. They're not there to be your friend, they're not there to favor one spouse or the other. They are there just to help you negotiate, work through thorny issues, and get to a place that's often times much more productive than just your two attorney's, or just you and your spouse going at it from opposite angles. Their goal is to get you to that agreement.

I hope that provides a good general overview of the mediation process. Some other things I want you to consider, is there are some benefits to mediation. One very clear benefit, is that you get to avoid court. I already discussed that. The second is that, it's a less expensive process in general. Now, what do I mean by that? Well, court by itself is all consuming on your part, your attorney's part, and everything else. That's already on top of the normal divorce process. It just adds an extra layer of very intense complication to everything.

Mediation is, if you're preparing for court and you're paying your attorney, that's the times when I see legal bills go into the 50, 100, 150 $500,000 mark, even when you don't have that much in assets. I've seen some astronomical legal bills, and almost all the time it's because of court. The only other time is if your finances are really, really complicated. But, most of the time it is because you are going to trial. It is such a high stakes event for everyone involved, the legal bills are expensive.

Now, mediation is a way to avoid that. Now, I'm not going to say that mediation is cheap. It is not. Mediation, a day of mediation can cost $3,000 a person often times, or more. That's on the low end. If I were called into the mediation and you wanted a day of my time, it would be several thousands dollars. It's not cheap. But, it is a way to break through, and often not only get through these issues faster, but also much cheaper than if you had gone through every issue back and forth with your attorney over months, and lots of letters, and lots of phone calls, and lots of arguments. Mediation can be very effective in that category. It's a very efficient way to come to a resolution.

Then there's the third thing for mediation. Now, if you and your spouse are on reasonable terms, I strongly recommend mediation instead of fighting it out through your attorney's. Mediation can be a very inexpensive way for some of you to resolve just one or ... If you have just one or two issues, or that you're thinking about that you just kind of need to have a third person chime in. Or, if you and your spouse are just generally civil, and you think you can kind of work it out pretty reasonably. Then, mediation could be a very exceptional process for you, and a good way to resolve things without a third party interfering, and over complicating the process.

Now, that's just a basic overview of mediation. If you get the quick start guide in the store, or work with me on the coaching calls, we have a lot of information about how do you prepare for a mediation? How do you think about negotiating? How do you really make sure that your wishes are clear, and you're coming up with some creative solutions? The nice thing about mediation is that you have a lot of options that you can, flexible options that you can work through and use. Mediation is an effective way to pursue some things you might not have thought about, that get you into the position that you always wanted all along, and everyone is as happy as they can be given that you're talking about divorce.

I would encourage you to check out some of those episodes, and some of the ways to prepare. Also, for a lot of you, you call me and say, "Hey, I got mediation in a month." Or, "I've got mediation in a couple weeks." Or, "Mediation in three months down the line. How do we prepare for this, and how do we put some information together so that you walk into the room, the mediation room ..." 'Cause remember, this might be a half a day, a day, a week at the most for most of you. How do you really prepare for that, really get clear on your goals, the things you want, and acceptable bans? When I say bans I should say, acceptable proposals that will really work for you.

Some other things to consider. Then the last thing I forgot to bring up is that, mediation isn't always a binding process. Sometimes it is, sometimes it is not. Often times you can, and most of the time you can go into a mediation voluntarily and you say, "Hey, we're going to work really hard to get to this agreement. But, if it does not happen, then we're not forced to sign anything that you don't want to sign." Often times it's very good, and I encourage most of you, even if you do come to a pretty good solution in the mediation room, to take a day, or two, or three just to think about it.

Just from experience, going through mediation can produce a lot of adrenaline. You can feel very wired on mediation day. Often times there's emotions, there's a lot. There's just an extraordinary amount of feelings, and moving parts, and it can often feel overwhelming. I hate to use the word exhilarating, but almost in a way. There's a lot going on. Sometimes after that's over, you might need a night of sleep, or two, or three before you sign that final agreement, unless you're just getting everything that you want in the room.

Mediation has a lot of dynamics to it, but I do and want you to, if you have the ability to, consider using it as a process as you consider your divorce. And, the options that might be best for you, whether you're still preparing for the process, in the middle of it, or are trying to work out some of the issues. Often times, mediation can be a great route to go.

0188: How to Divorce a Narcissist - and Win (or at least Survive) Oct 03, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode, we're going to discuss how to divorce a narcissist and when, or I should say at least survive the divorce process, and really come in in one piece, and come through this situation in the best position possible given a particularly difficult spouse to handle during the divorce process.

The reason I bring this topic up, I haven't talked about it in a while, and through the coaching calls I've had over the past few weeks, many of you are identifying that your spouses have some form of pretty severe or extreme narcissism, and are wondering, and have been asking, "Well, how do I deal with that, and what kind of strategies can I employ? What are some things that I should be thinking about?"

I'll say of course individual circumstances always matter, and if you want to talk about your case, we can do that via a coaching call, but I also want to give you some general tips and strategies and things to think about, and also for those who haven't really thought about narcissism with any depth and thinking about that in the context of your spouse, I want to go through some of the characteristics of what someone with narcissistic personality disorder, or what a narcissist is, and then also go through really just three very specific strategies to help you get through that situation.

Let's first start with what a narcissist is. The technical term, you heard me mention it earlier, is narcissistic personality disorder. It is a disorder, and it does have a clinical and psychological definition that's very specific, and I'm going to actually read off some of the symptoms of that.

One of the things I do want to bring up though, is it's a continuum, so what that means is some people would score, if I wanted to keep the language simple, some people might score 100 out of 100, as they are an extreme narcissist, but some of us, including some of us listening, still have forms of narcissism, we all do, but we might be a five, or we might be a 10, or might be a 20, but your spouse could be an 80, or a 90, or 100, or I bet some of you think your spouse might be off the charts.

What I'm going to do, is I'm going to read the definition of some of the symptoms. These come from the Mayo Clinic website, and it says that, "People with narcissistic disorder can have some of the following," and I know some of you are going to be nodding your heads as you listen to these descriptions, so here we go.

So people with the disorder can have an exaggerated sense of self-importance, have a sense of entitlement and require constant, excessive admiration, expect to be recognized as superior without achievements that warrant it, exaggerate their achievements and talents, be preoccupied with fantasies about success, power, brilliance, beauty, or the perfect mate, believe they are superior, and only can associate with equally special people, monopolize conversations and belittle or look down on people they perceive as inferior, expect special favors and unquestioning compliance with their expectations, take advantage of others to get what they want, have an inability or unwillingness to recognize the needs and feelings of others, be envious of others, and believe others envy them, have an arrogant, or I should behave, in an arrogant or haughty manner, coming across as conceited, boastful, and pretentious, insist on having the best of everything.

That is the first set of characteristics. Believe it or not there are more, but I know just from that reading, some of you have a pretty clear sense and probably know where those behaviors come in with your spouse. Maybe it's not your spouse, and that wouldn't be relevant to the divorce context, but I know we all have friends or might know some people in popular culture who you can clearly identify these characteristics with. I will not name any names, but I think it's pretty obvious for some.

Now, the definition from the Mayo Clinic also has some other characteristics they say, and it says, "People with narcissistic personality disorder have trouble handling anything they perceive as criticism," that's very important, "and they can become inpatient or angry when they don't receive special treatment."

Now, I'm just going to give you all a little insight into me. That one definitely falls in my category. I do love special treatment, and that one's me. But anyways, other things is that they have significant interpersonal problems and feel slighted, react with rage or contempt and try to belittle the other person or make themselves appear superior, have difficultly regulating emotions and behavior, experience major problems dealing with stress and adapting to change, feel depressed and moody because they feel short of perfection, and have secret feelings of insecurity, shame, vulnerability, or humiliation.

That's a lot. That is a ton of different things, but in conversations I have with you every day, I know a lot of you are living with spouses that share these characteristics. These are daily behaviors that you are living with, and you're trying to figure out how this process is going. One of the extra challenges with someone who shares these narcissistic characteristics is that most narcissists don't think that anything is wrong with them.

One of the challenges with diagnosing narcissistic personality disorder is someone who is a narcissist will not sit down to be diagnosed, and they won't think that anything is wrong. In the divorce process in particular, which is what we're talking about, it really drags on the divorce process, because everything becomes bigger than it needs to be.

Now, while I'm not saying that the issues that you're facing in divorce are small, they are big, but what happens is usually you, the person who are listening, has pretty reasonable expectations, and needs, and wants during this process, whereas dealing with the narcissist can be just complicated, and their expectations are the opposite of unreasonable. Every time you force them to give an inch or ask that they give an inch, they react in ... they overreact, I should say, kind of in an out of control manner, and it just becomes a much bigger fight than necessary.

Compounding that is I like to say ... I had this funny thing. One of my first jobs I had when I was working on Wall Street, I was a financial advisor at a very good firm, and there were lots of financial advisors working there. I noticed something very interesting that applies to the narcissist in the divorce context.

What was interesting is the personality of the financial advisors, their clients would also share a similar personality to that advisor. What do I mean by that? So there would be a financial advisor who was very ADD, always wanted things really snappy, was kind of all over the place, and when their clients called, their clients were the same way, very ADD, a little bit all over the place, kind of snappy, and that was interesting.

Then conversely is there would be an advisor there, and he would be very thoughtful, very deep thinker, very analytical, relatively quiet, not kind of a big sales personality, and when that person's clients called, that's what they were like, the clients. They were generally very thoughtful, very analytical, very deep thinkers. It was interesting because I was sitting around, I don't know, 20 or 30 very successful financial advisors, and in general, all of their clients matched their personalities, and it was one of the weirdest things I had noticed.

Why do I bring this up? Well, in the divorce context, it turns out that narcissists tend to find lawyers with those same personality traits. What could have been even a reasonable process becomes that much harder, because not only is the spouse suffering on the scale of narcissism to an extreme degree, but their attorneys are often further complicating that situation rather than helping it.

It turns out, at least in my experience, I can't speak for everyone, but oftentimes, those with narcissistic personality disorder tend to have very narcissistic attorneys who are just a pain and a half to deal with. I can't stand them, to be quite frank. Least favorite people to deal with in the legal process.

I don't mind a mean attorney, I don't mind any form of attorney except for the narcissistic ones. I can deal with the mean ones, but those who are just full of themselves and have clients who are equally that level are the biggest pain. I think if you were to talk to any very good divorce attorney, they would say the exact same thing. Every town and every city across America, there are attorneys who share these capabilities, and also attract those very frustrating clients who are probably like your spouse if you're listening to this.

Now, all that said, let's shift gears a little bit. What do you do? What are the strategies ... and I'm really just going to go through three ... strategies that you can put into place to deal with a narcissist during the divorce process? I like to only discuss three strategies, because if you focus on these three things, you will be focused on the right things, and actually, I use the word, "focus," because one of the challenges with dealing with a narcissist is small things become big, and you can quickly lose sight of the big picture, or as I like to say, "You can't see the forest for the trees."

I only want you to focus on a few things, and if you focus on those few things, you will get through in the grand scheme of things in the best position possible. So what are those three things? The first is document everything and get organized. The second is make sure you get an experienced attorney, and the third is you're the CEO. Remove emotions from this process.

Now, I'm going to get into each one of these three things, and intentionally, this is a little bit longer episode, because I think it's a very important one, and I'm going to go through these three topics. First one, document everything and get organized. Even though you're dealing with a narcissistic spouse, it's only one part of the process.

You still have everything that you're dealing with in divorce. Your spouse's personality characteristics are just something on top of that. It's a little frustrating, but you still have to deal with all the custody issues, hidden assets, unwillingness to compromise, trying to come up with a settlement agreement.

One of the things that really helps during this process is staying ... not only staying organized, but documenting everything that's going on, and everything that's happening. When I say, "document everything that's happening," is it can be overwhelming trying to keep up with all of the major events in your divorce process, particularly with a narcissistic spouse. Sometimes I'll talk to you or work with you over a long period of time, and you'll have 100 specific examples of things that have happened.

Of those 100 examples, it's just really hard to keep track, like what's going on, because you're living with these things, but we're trying to help you from the outside, and trying to catch up on these stories, and make sure that we do the best we can for you. So here's what I suggest you do when dealing with a narcissistic spouse, is you put together a timeline, a very, very simple timeline in chronological order, of the things that are happening. If you have evidence of those things, you supply the evidence of them. I really mean one or two pages of just the main things in the divorce.

What would I do? I would take a document, or a spreadsheet, or write it by hand, you put the date. So you're going to put June 4th and the year, and you're going to say, "Spouse yelled at me for this, and this happened," or whatever. Then you're going to say, "June 18th, X amount of money was suspiciously withdrawn from bank account. Unsure of where it went." And you're going to put behind that, is you're going to put a bank statement with that withdrawal on June ... I forgot what date I already said, we'll just say June 20th.

Then you're going to go to July, and say, "In July kids were with spouse. They did not eat for 18 hours according to them. Came home hungry, no food, and were unhappy," and you're going to write that down. You might say, "On July 17th," and whatever happened. You might say, "Police were called." Sometimes that happens with many of you. You'll say, "Here's the police copy of the police report."

Whatever the different things are, I'm just making up those examples off the top of my head, but you'll have a very simple timeline with the date, one sentence or two sentences of what happened, and if you have evidence of it, any evidence of what happened. Might be text messages, might be photos, might be bank statements, might be any number of things that could have happened, and you're just going to put that together in one file, and keep it organized.

One of the biggest challenges for your attorney or for me when it comes to helping you through this process is not only ... The most frustrating thing about dealing with a narcissist is it can be very isolating for you, and very overwhelming for us trying to help you. The goal is ... and I'm going to talk about each of those.

Let me talk about overwhelming for a second. So many things are going on, it's hard for me or hard for your attorney to keep things straight sometimes in terms of all of these different things that happen. If you have proof of them, if they're relevant for the divorce process, if they're he said she said type things, and we just need to keep them in order. So maybe we show this to a judge later, or maybe something's not relevant, or maybe it is particularly relevant, but we need to be able to keep those things straight.

The other thing that's relevant about that, is I said it can be very isolating. The other thing that's particular ... many things are particularly frustrating with dealing with a narcissist, but almost universally, narcissists are loved except by their family, or I should say their spouse in particular.

I know that everyone who might interact with your spouse might love that person. They might think, "Oh, Johnny's great," or, "Oh, Jill is awesome. Love getting a beer with Jill," or, "Have a great relationship with Johnny, I always say hi to him. I know he's the best." Always walking around the restaurant, or walking around town greeting people, and everyone knows who they are, and very well liked, but when they come home, they're a terror to you, and they don't treat you well, and it's awful, and it's very isolating, because you might feel that people don't believe that this person is actually not as good as everyone thinks.

One of the ways to combat that is to really prepare yourself, and document all of these things that are happening. If you have evidence of these things that are happening, and documented clearly, it's easy to change the narrative in this divorce process about who this person is, and really get the truth about them out, and advocate yourself and fight back. Narcissists are often bullies, and they like to yell and scream and everything else, but there is a truth that is happening, and you can expose that truth when you have the appropriate evidence together.

A lot about point number one, document everything, get organized. That is crucial in this process. Point number two is get an experienced attorney. Now, I talk about attorneys a lot on this show, and I don't have a ton of additional things to add, but I do want to talk about an attorney in the context of the divorce process.

Now, my last episode was how to find an attorney if you don't know anyone, so listen to that. Also in the store, if you get the Quick Start Guide, I have a big section on how to manage and improve your relationship with your attorney. Even with some of the coaching clients, particularly those I work with over a longer basis, I'll help you strategize, well, what's the best communication process with this attorney, and how do we do it effectively?

What I wanted to bring up though, is if you follow my resources on picking an attorney, one of the questions if you know, and if you're listening to this episode, doing some additional research, and you figure out that your spouse really has some pretty severe narcissistic tendencies, well, that really comes into play as you pick your attorney.

In particular, in your initial consultation, you should be asking ... well, one is you should have this beautiful timeline that's clearly documented, and you should say, "Look, I'm dealing with a narcissistic spouse," one question you should ask, "Have you dealt with spouses like this before? Do you have strategies in place? How do you feel like we should approach this given the information we have? If this were to go in front of a judge, what do you think? Will the cost of this divorce be more because of the nature of my spouse? Can you tell me how things would change, or what I should be thinking about? Will the length of time be longer because of my spouse? If my spouse weren't like this, would you have a different approach?"

These are kind of questions that you should be asking your attorney during your initial consultation or your early consultations, because it can be very relevant as you think about who you hire as your divorce attorney. Now, I know some of you will look for attorneys that specialize in narcissism, or will have it on their website. I'll tell you this, that's probably not the best method.

Most attorneys that I know that are very good that I work with who are super experienced, they are not ... they don't necessarily have a section of their website dedicated to narcissistic spouses. That said, I guarantee you, they have all dealt with them all the time, because that is just part of this process, and part of what they do. Just because someone's website doesn't say it, I wouldn't say that's a cause for concern. I would just look for a generally very good, very competent attorney, and I promise you, they will have seen it dozens or hundreds of times, unfortunately.

So the second thing was getting an experienced attorney. Now, the third thing is you are the CEO of your divorce, now remove your emotions from this process. Much easier said than done, but let me tell you what I'm getting at. Whether you are a stay at home mom, or dad, or maybe you're the one who was out working, it doesn't really matter.

If you were a stay at home parent and you've been running the household this whole time for the last two years, or 25 years, whatever it is, you have been the CEO, the Chief Executive Officer of your household. If you've been the one at work every day for the last two or 25 years, however long you've been married, you have been the financial earner out after it, earning the money, and earning the lifestyle.

Whatever the case is, you have a lot more experience and a lot more capabilities than you probably give yourself credit for. When it comes to dealing with a narcissist, or a narcissistic spouse, one of the things that you should be doing is really treating this divorce process as if you are the CEO of this divorce process, which you are. You have many more skills, regardless of what your spouse might say to you. Oftentimes they're trying to belittle you, or they're berating you, or they're just a terror at home.

I get it, but it doesn't lower your individual value, and it actually ... you have a lot more to it than you think, and a lot more skills than you think. When it comes to deciding what the best courses of action are during the divorce, you need to take that individual person out of it to the extent you can. It's almost impossible to remove emotions from the process, but go to therapists, talk to friends. I give lots of different advice in this podcast or via the Quick Start Guide in the store, or via coaching calls on this subject, but the point is, is when you try and decide what's best for you, you need to treat it through the lens of, "All right, I have to ... this divorce process will end one day."

It might not feel like it now. For some of you it might be a few months, and for others it might be a few years, but whatever that time period is, it will be over at some point. Really, your main goals should be, "Well, when this process is over, I'm going to have 10, or 30, or 50, or 70 years life left ahead of me. How do I make the smartest decisions today regarding my finances, regarding my kids, regarding my family today, that will set me up for the next 10, or 20, or 50, or 70 years of life?"

When you think about those decisions, you have to take the emotions out of them. You have to think, "Well, what are the dollars and cents? What are realistically the best options for me, my children? If I were a third party thinking about this, and if I were giving myself advice 10 years from now, or 20 years from now, what would I say to myself today as I go through this process, or what advice should I be getting from a third party that will really ... If I were just the boss of this process, the CEO of this process, what decisions would I be making to get me through it?"

If you make decisions from emotions, your emotions can easily lead you astray during this time, but if you make your decisions through logic, you can start to cut through all the fluff, cut through the bullying, cut through the rough nights, cut through all of this, and really focus on, "Hey, here's what I want. Here are my three goals," or, "Here are my five goals." I've talked about goals on this in the podcast.

"Here's what I want for my future. I know he or she is going to say this or that, or whatever in this process, but that doesn't matter. Here's what I'm focused on, here's what I'm going to fight for for myself, here's what I need to get through this process in one piece. That is what I'm going to fight for, regardless of what my spouse decides to do or tries to do, because I'm the CEO. I'm the boss of this process, and I'm going to put myself in the best position possible for my future, and for my kids' future."

When you start to adopt that attitude, you will really shift the way that you think about dealing with divorce with a narcissist, and it will be a much better position for you for the future, and for the long-term in setting up things the way that you need to set them up. You will be putting yourself in a position to fight back, and to make the smartest decisions you can to put yourself into a position to get you into a good spot not just for the next six months or the next year, but really for the rest of your life.

So as I said, three pieces of advice for dealing with a narcissist. The first is document everything and get extra organized. The second is make sure you get an experienced attorney who has the knowledge and strategic thought and thinking, and knows how to handle a narcissist, and the third is remember that you are the CEO of this process, and you need to treat yourself as such.

Try to use logic and smart thinking over emotions during this process, even though it is a tough time for you unquestionably, but know that if you think about it, the smartest way possible, you will get through this process in one piece, and you will get yourself through this process in a position to set yourself up for a great future.

0187: How to Pick a Divorce Attorney if You Don't Know Anyone Sep 26, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

How do you pick a divorce attorney if you don't know anyone? A lot of people just guess, they'll search online, type in “divorce attorney near me”, and that's the attorney you pick. Well I don't think that's necessarily the best option. I wanna give you some guiding principles in terms of how you can pick a good divorce attorney without having to know anyone in advance. A divorce attorney is one of the most important, if not the most important, decision you make during the divorce process.

Finding a good attorney can be tough, I mean how do you know that that firm that you're going to call is really good? Are there any ways that you can narrow down your search to at least improve your chances of getting a good attorney? The way I think about some of the information in here is I know an attorney, so I'm here in Dallas, and I know an attorney who might be looking for someone in Florida. And I'm going to tell you the same methods that the good attorneys will use to recommend an attorney to someone if they aren't in the right state.

It's actually not that complicated, there's a few things that you can look for that will very easily help you pick a very good, very competent attorney. I'm gonna go through those ... Four issues that I'm gonna go through, and I'm just gonna go through them quickly, and this should be your framework if you don't know what attorney to choose, or if you're looking for a new attorney for any reason.

Here they are, the first one is they should be a member of the AAML. That is the American Academy for Matrimonial Lawyers, AAML. Every family lawyer knows what that is, and if they don't that's a problem. But there's a website, aaml.org. If you find ... The AAML is a group of attorneys, they vote each other in as I understand it, but they all have a minimum level of experience and they are all respected by their peers. So what you can do is you go to the AAML website, you type in your city and state, and they will provide a list of their fellows within them.

Of 1,000 attorneys, maybe 20 actually get into the AAML in a given place, and so most, if not all, but most of the attorneys in that group are very, very good and very respected. So you go the website and you pick one out.

The second thing that you should do is look for board-certified attorneys. Many states, not all states, but many states have a state board that certifies an attorney in a particular practice area. Could be family law, could be personal injury, could be trial law, could be education law, could be estate planning. But if your state has a board certification you should type in “board-certified family lawyer Missouri”, or “board-certified family lawyer California”, or “board-certified family lawyer Virginia”, and the attorneys who pass the board exams, it's always a very rigorous process and only a small percentage of people pass it. I think the number for Texas is less than 3% of attorneys in an area pass the board certification.

There's minimum requirements they have to make in terms of length of time, experience, etc. But if you do that, then those people will also often be very, very good attorneys. So we have number one is the AAML, number two is board certification.

Number three is you should, or can, ask another lawyer. If you know other attorneys, then they can help provide recommendations for you. This method is not foolproof, because everyone has their friends, and you can be steered astray. So if you ask an attorney I would still check number one and number two to make sure they fit those minimum criteria.

Then the fourth thing I want to recommend is reviews and testimonials. Check them out. If your attorney does not have reviews and testimonials, that can be a red flag. You need to see what other people are saying about that attorney. If they don't have any, that may be they're just not very good at their online marketing. But if they have a bunch of negative ones, you should read those negative comments, and conversely if they have lots of positive ones you should see what people like about that attorney. But you should check the reviews.

So the perfect attorney, if I had to find the perfect attorney, I would ask all of my lawyer friends that I have, I'd say, “Hey, can you recommend me a family law attorney?” I would double check to see if they're part of the AAML. If they are they will usually have that badge right on their website. I would check to see if they're board-certified, if they are that's awesome, it's right on their website. I would check their reviews, if they have lots of great reviews then that is perfect, and it's right on their website. And then if I have those four things, you are 95% of the time going to have a very, very good attorney in your corner.

You can still end up with someone who might not be a good fit for you, now that's a separate conversation, and actually in the store if you get the divorce quickstart guide, I have tons of resources on how to manage your attorney, making sure your attorney's doing the right things for you, and other elements of the attorney relationship that I haven't talked about for a while are all available in the store under the quickstart guide, which is the archives for the podcast. It has almost 50 hours of information, and it's one of the best resources available out there in terms of having a wealth of information at your fingertips.

I know some people who have listened to the podcast more times than I have, and they got it at the quickstart guide. There are questions about fit for your attorney, but if you get an attorney that has lots of good reviews, AAML, board-certified, and recommended from other attorneys, you are going to be most of the time, 95% of the time, in very good hands in terms of negotiating your book ... Or sorry, negotiating your divorce and the future settlement.

Now, there's something that I do want to bring to your attention, and sometimes people ask me, is they say, “Hey, can you recommend an attorney for me in city and state here?” Well, I'm very upfront with people, I have a handful of about 10 attorneys, less than 10 actually, across the whole United States that I've worked with closely for a while that I can truly recommend to you. You just happen to be in one of those areas for me to recommend someone to you, but I still get to recommend an attorney once or twice a week of that handful of people on the list.

That said, in a coaching call one of the things that we will do is we will go through these methods and help you narrow down that list of potential attorneys, or I'll follow up with you after a coaching call to say, “Hey, why don't you call these three firms or two firms, schedule an initial consultation, see what you like the best, and go from there.”

But ultimately I'm going to be doing exactly what I just went through with you. I'm gonna figure out where you live, I'm gonna go to the AAML website, I'm going to see if they're board-certified as well, I'm gonna check their reviews. And if I happen to know a lawyer in that part of the country I'm gonna ask my lawyer friends and say, “Hey, do you know anything about Jane Doe or John Smith?”

But it's not that much more complicated than what I just said. You need to ... There's no guarantee in this process unfortunately. It's tough, and it can be a challenge to find that attorney, and even if you do everything perfectly, it can be off. And you might end up with someone who's not good for you.

But if you follow these four steps, you're in a very good position going forward, and if you're still trying to choose your attorney, or you're still early in the divorce process, or maybe you just want an initial consultation with someone, these are the steps that I would tell my best friend to follow to find someone good for them.

0186: Can Do-It-Yourself (Pro-Se) Divorce Work? Sep 12, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode, I want to discuss do it yourself divorce and specifically whether or not it can work. Do it yourself divorce, just to make sure we're all on the same page, means not having an attorney represent you or your spouse during the divorce process. Basically, the two of you decide to work out all of the issues together yourself and you don't involve lawyers in the process and it actually has a term also called Pro Se divorce. If you ever see the term Pro Se divorce, it's a form or it's the same thing as do it yourself divorce and a lot of people choose this process and actually, I was speaking to several attorneys recently and they said it's becoming a more and more common practice and for good reason. In many cases, depending upon your situation, you might not need an attorney.

So in this episode I want to discuss some of the situations in which do it yourself divorce can work and some little tips to help you navigate that process should you proceed with do it yourself divorce, and also just some other considerations to think about. Now, when you go the do it yourself divorce route, there are three specific benefits that I like for people to keep in mind. Number one is that it is generally a much cheaper process. Look, you can pursue a do it yourself divorce if in the base level for only the court filing fees. I'm gonna talk about that in a little bit about going to the court, but basically, you are saving perhaps many thousands or tens of thousands of dollars by doing the process yourself. Just cheaper. You're not paying hundreds of dollars per hour for lawyers fees.

The second thing, the second benefit is that it's usually a less contentious process. Now, in the context of divorce, almost everything is contentious and let's get that out of the way. But there are degrees of fighting, you're getting divorced for a reason. Things aren't working out. We got it. So when I say a less contentious process, when you go do it yourself divorce route, it means that you and your spouse can have civil conversations, and even though this is a painful process, you can work things out between the two of you in a civilized manner. Yes, there are still emotions involved. Yes, you probably aren't going to be happy about all of this, but you can talk with each other and talk to each other and therefore work things out. Also as part of that is you can split your stuff up in a reasonable way. You're not going to be spending $5,000 trying to determine who gets the blender that's in the house or the food processor or whatever else.

Then the third benefit is, or I'll just say the third, this isn't necessarily a benefit, but the third thing to keep in mind is that almost anyone who's against do it yourself divorce is an attorney and there's a reason for that is because the attorneys do not get their fees as part of the process. So, there are downsides to do it yourself divorce, and I'm going to get into those in a little bit, but most of the time it can work if you think it can work and you fit the right conditions. Now, what are those conditions for do it yourself divorce? There are some things that really should be in place, otherwise you're going to run into trouble and the money you save is not going to be worth the effort of doing this yourself, and it's probably a better, probably would've been a better solution to pursue another divorce methods.

So, I like to keep things simple. I'm going to keep it a list of three things, three conditions that you should have before pursuing do it yourself divorce. The first one is both of you should have a very clear understanding of all of your assets and your debts. Or to put it another way, you both need to have a clear picture of everything that you own and that you owe. You need to know, if you have a house, how much is the house is worth and be able to agree upon that. If you have a mortgage, if you have credit cards, if you have a 401k or a pension plan or other retirement accounts, if you have cars, if you have other assets around, you need to know what those things are and both of you need to be on the same page regarding them. If you're not, do it yourself divorce is probably not the best option for you.

The second thing is you cannot have complex custody issues. Complex custody issues are a challenge to say the least. An attorney I work very closely with who will probably be on the podcast in the coming months, specializes in complex custody cases and just from knowing her and the types of issues she deals with and the book that she just wrote on the subject, it is one of the toughest things that you can deal with as part of the divorce process, and if you have a complex custody issue, do it yourself divorce is not for you. Now, the third condition that you need to have is the ability to negotiate a reasonable agreement with your soon to be ex-spouse. Now, I didn't say you have to like your soon to be ex-spouse, but you have to both be in a position to understand and agree to something that's fair.

Now, there is no divorce agreement in the history of divorce agreements that's perfect, right? Almost never do I see two people smiling at the end of the divorce settlement and saying, "I got everything I wanted, I'm ready to go," and if that does happen, there's probably an issue and someone got cheated. Most of the time, this has to be some sort of an agreement where neither one of you are perfectly happy, but you can live with the results of the process and if one of you is trying to "win" in the divorce process or trying to punish the other spouse or has some other issues that prevent you from negotiating something reasonable, then do it yourself divorce is not for you and you should most likely pursue other methods.

So let's say you have those three things, look, you have, you understand what you own and what you owe, and the other thing I meant to say about that one is that if you have complicated assets, do it yourself divorce is usually not the right idea. Second is you don't have complex custody issues, and third is you think you and your spouse can work out something reasonable. So what do you do if you're going to pursue a do it yourself divorce? Well, what I recommend is you write up your agreement. You put it all on paper. I've seen spouses negotiate it and sit down around the kitchen table and come up with an agreement. I've seen spouses do it by email. I have a number of people that I've worked with over the years who will email each other back and forth some detailed agreements.

I know spouses who do it in any number of methods and ways, but whatever it is, you need to put it on paper and you need to work out, you say, "Hey, here's what we're going to do." I like to do things big to small, so if your biggest asset for most people is a house, second big asset is a retirement account, but if that, let's just assume for a moment your house is the biggest thing, you'd say, "All right, here's what we're going to do about the house. We're going to put it up for sale. We're going to split the proceeds 50-50," or whatever you think is right or one is going to keep the house or whatever else, and then when you come to agreement about the house, you move on to the next asset and the next asset then the next asset, and or maybe if you have debts to consider, then you go through down the line on the debts. But the point is is you negotiate something reasonable and you go through each thing and you put these items on paper and you come up with what you want your agreement to be.

Now it doesn't stop there. Next thing you have to do is you have to figure out how you're going to actually file the paperwork. One complexity about the divorce process that's really challenging is that every county has a different divorce procedure in the United States. I'm going to give you an example. I'm based in Dallas, but I travel very frequently. Dallas, where I am in the city of Dallas, there is about four to five counties within a 20-minute drive of where I live. Each one of those counties handles divorce totally differently, even though they're all in the city of Dallas or the Dallas metroplex, each county has different rules, different procedures, different judges, different processes, so that's one issue.

Another issue that's involved is they have different paperwork and so you need to understand what county you're going to file in and how to do that. Now, one, there's a few solutions that are out there in terms of figuring out the right paperwork to get. One thing you can do if you really want to keep costs to a minimum is drive to your county courthouse. If you go to your county courthouse, you go to one of the clerks at the windows and you can ask them, "What divorce paperwork do I need?" and they can point you in the right direction. Some counties actually have it on their county website, but you need to make sure you get your appropriate county's paperwork because even though the laws might apply on a statewide basis, the exact procedures occur county by county.

Second thing you need to or so one method I said is is going to the clerk. Another method potentially is going online. Now, aside from going to the court's website, you can also use one of the online divorce services. There are many do it yourself divorce services that guarantee that they'll provide you the right paperwork and it'll be filled out correctly and whatever else, and usually those services go anywhere from I've seen $150 upwards to about a thousand dollars and, if you get a reputable one, there's a lot of questionable ones out there, but if you get a reputable one, they can help you in that process and through that process.

Now, another thing you can do is either work with a paralegal or an attorney on an uncontested divorce package. Many attorneys in just about any city have an uncontested divorce pack, uncontested divorce package where it is usually a fixed fee package that you pay and they guarantee that the paperwork works or will be handled appropriately for you. So it's usually between a thousand and $3,000 depending upon where you are, but you get to guarantee that everything you've done is ... That everything that you've done and submitted is correct. Here's why this might be a good option. You might have all the paperwork, you might go to the court, you might have everything correct, you might submit it in the right way, but guess what? Unfortunately, this is a complicated process and papers can get rejected for oftentimes some of the silliest, smallest reasons. Court paperwork, I've almost never ... I'm sure there's a state somewhere that's good, but I haven't found it yet. Almost no court paperwork is easy to navigate. It is complicated. I haven't talked about this example in a while, but the state of New York where I have lots of clients, New York, California, Texas are my three biggest but all across the country, lots of clients. But in New York, the New York paperwork is so difficult to complete. Even just the basic paperwork, I hate looking at it. It's necessary, but it is not very user-friendly. The point being is if you have a little bit of money saved aside, it can be cost efficient just to say, "Hey, we want an uncontested divorce, here's everything we've already agreed to. Can you just check over it and fill out the paperwork for us, please, attorney," and you can do that for a fixed fee.

So it's okay if you're going through a do it yourself divorce to get limited help. So that's the other thing I would say is so those are the options for filing the paperwork but just my last tips for those considering do it yourself divorce is consider getting some additional help, what I call as the sanity check. One of the most common things or the biggest things I recommend is maybe once you've come up with a full agreement and you got everything down, it can be worth having an attorney or an associate or a paralegal or me, via a coaching session say, "Hey, this is everything that we've agreed to. I think it looks good. Why don't you read over it? Give it a check and let me know what you think," and oftentimes you might see something. Someone who looks at these, hopefully for you, this is the only time you have to deal with this, but someone who sees hundreds or thousands of divorces can say, "Hey, you're missing one, two and three," or "Hey, it might be better if you consider this thing for a tax purpose," or "Hey, you're going to both end up in the same position, but maybe we should split stuff in this manner instead of the way you propose."

It can be pretty quick for someone who looks at these things all the time to figure out what the best options are. So I might say for some people, and I tell people all the time, go sit down for an hour with someone or 30 minutes with someone just to get a second opinion just to make sure that everything is okay. It doesn't mean that what you've done is bad, but sometimes it can be helpful just to have that other set of eyes. Look, do it yourself divorce, if the issues at hand are not too complicated, I'm a big proponent of it. I mean, I think you should by all means save money in your divorce. It's not for everyone and it won't work in every situation, but if you are in a position where you think it can work for you, definitely start by pursuing that path. It doesn't necessarily mean that you have to. There's options you can pursue the do it yourself divorce path and then, looks like things aren't working out the way you would have wanted them to and therefore you switch up and you do both get attorneys. But if you think you can start with the do it yourself divorce and resolve things that way, by all means, check it out because it could be a good solution for your situation.

0185: Signs You Have a Good Divorce Attorney Aug 29, 2018

One of Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

The most important decisions you can make, during the divorce process is, choosing a good attorney, and having a good attorney work for you and on behalf of you. One of the main questions I get with a lot of people is, is my attorney doing a good job? I have the fortune of working with attorneys, family law attorneys, seven days a week. I can tell you which attorneys are good and which are less good. Actually, even from time to time on the coaching calls, I will make a recommendation for an attorney if you happen to live in a city where I know an attorney, who is a good one. But that happens only on the coaching calls.

If you don't have a good attorney yet and you're looking for one, I'm going to record an episode on how to choose ... another episode on how to choose an attorney. I already have lots in the archives. But I can also help, sometimes, on coaching calls, help you figure out, hey, who are the best two or three attorneys near you that can help you through your divorce process.

But the subject of today's episode is for all of you who already have attorneys, are they doing a good job for you? What I want to go through is I want to give basically four characteristics that pretty much every great law firm, in general, but particularly during the divorce process, has when it comes to an attorney ... and providing a good service. I want to go through these four things that you should be looking out for, and asking yourself if they apply to your attorney and to your case. If they don't, you need to think hard about what the best way is to proceed for you.

So, here are the four things. The first is your attorney advocates on your behalf and creates a good game plan for your case. The second is that they provide responsive customer service. The third is that there are no surprise bills that come due for you. And the fourth is they help you through the case closing process. I'm going to jump in and discuss each one of these four things in a little bit more depth.

Let's start with part one, is that your attorney advocates for you and executes a clear game plan for your case. Well, what does that mean? Well, I think 100% of the people that are listening to this want ... if you have an attorney, you want your attorney to be in your corner. Simple as that. And a lot of times, you will say, "Hey, I don't think ... " and here's the phrase that I hear far more often than I should is they say, "I don't think that my attorney is fighting for me." And that's unacceptable. When you pick an attorney, you're hiring that person, you're paying them a lot of money, and you want them to feel like or that they're fighting for your best interest, and getting what you deserve as part of this process. You want your attorney to set you up in the best position possible for your future.

Sometimes ... you know, I say all the time, your state laws vary and what your attorney can and can't do, in certain situations, can be very different, depending upon your individual circumstances, what's going on in your case, what the law says, et cetera, the particular dynamics. But, one of the most frustrating things I hear is you'll say, "Hey, I brought this up to my attorney, and they ignored me." Or they said, "It won't work," but didn't explain why. Or they said, "Well, I should just do this." And you don't want your attorney ... it's okay if you suggest something that might be outside of the course of the law, or maybe incorrect, but you want your attorney to at least understand your position on certain items, and make sure that even if you are presenting something that might not be logical or might not be in your best interest, that your attorney sits down and explains, "Hey, John ... Hey, Jane, here's ... I understand your concern. I understand what you're getting at, but here's why the law says otherwise." Or, "This is what the judge says." Or, "Here's why I don't think that's the best example in your case and here's a better solution for you." You always want that person to be advocating for you and on your behalf.

The other thing that's very important as part of this advocate process, is you want your attorney to have a clear game plan for you. One question I ask ... or I encourage you to ask every attorney in every initial consultation, or even if you've already hired that person, you should say, "Hey," ... this is a very important question. You should write this down. "Given what you know about my case, what do you think are the range of outcomes that I could be looking at?" And what does that mean? I'll say it again.

I'll say the question again, then I'll get to what I'm getting at. "Given the circumstances, and the facts of my case that you know now, what do you think are the likely range of outcomes, based on your experience?" And here's what we are going for. The question is, is your attorney should be able to say, "Hey, based on the facts of the case, you'll probably get about ... between 40% and 60% of these assets. The exact split may be a little bit different. I think your child support will come in around this amount. Your spousal support will come in around this amount. Here's probably how the custody will work itself out. And ultimately, here's what the court will likely say, if we were to go in front of a judge. And so, the goal is, is given this information, I think this is how we should proceed through the case and negotiate and get what you deserve." I think this is the best option.

If your attorney doesn't explain something like that to you, then that's a real problem. You should have a very good sense of what your game plan is, at all times throughout your case. Now, the game plan doesn't have to be fixed, but you should know, from the very first appointment, what that overall strategy looks like. That strategy certainly changes as the dynamics on the ground change, and certain tactics pop up, and whatever else. But, if your attorney doesn't have a clear game plan for you, then that can be problematic. Sometimes, the game plan is we're just going to have to go to court to deal with some of these issues because the spouse is being unresponsive. Other times, the game plan is ... actually, sometimes the game plan is ... and I have this with a lot of people that I work with ... is, I don't know what the game plan is quite yet. Here's what I know, is we know that there's these assets thus far. We need to get more information. So, the game plan for now is we're going to subpoena, or request, a bunch of additional information, and once we have that information, we will have a much clearer picture of what we should be asking for, and I can update you with more then.

There could be other game plans in between, that are very specific, that say, "Hey, here's what the state laws are. This case is pretty clear cut. This is what we should get to, and ask for, and as long as everyone's reasonable, this is what you should probably end with at the end of this process." Your attorney should have some form of an answer for that question. They should be, at every step of the way, helping you get to that position. So, that's enough on number one, which is advocating and executing a clear game plan for your case.

The second thing is providing responsive customer service. What do I mean by that? Responsive customer service really just boils down to some very simple things that bad attorneys don't do. Very simple, is they should be returning your phone calls and messages within a timely fashion. I usually say within 24 hours. Even if it's to say, "Hey, I need some more time to look into this." But, I know ... and I hear from you ... attorneys that do not reply to you for a week or two at a time. That is unacceptable under any circumstance. For most of the people I work with closely ... and I try and practice what I preach ... you'll hear from me within the hour, or certainly within the day. If something's urgent that comes up, you call me immediately and I'll try and stop whatever I'm doing to help you, if I can.

Your attorneys should be doing the same thing. We're all busy, all trying to help you, but if you have a question, and you say, "Hey, here's my list of questions," they should be able to say, "Hey, let's schedule some time later this week to talk about it," or they should reply to that email, or they should have an assistant say, "Hey, these are the things that you should ... that we'll get back to you with some answers soon."

The other thing they should be doing is they need to be keeping you updated with deadlines. The legal process is filled with deadlines. Courts or documents that you need to submit to the court, or depositions, or requests for information, or any number of things that you should be thinking about, you need to be keeping track of those and keep updated with those items as things go along.

And the worst thing that can happen is ... actually is ... I hear this from time to time, is there's attorneys out there that won't tell their clients that there's a big deadline coming up. Or, they'll tell you the day before. So, I'll have a client say ... we'll be speaking on a Wednesday, and then on Thursday, they get an email that says, "Hey, on Friday, we have a big court date." And that is unacceptable. You need to know ... these things are scheduled, oftentimes, months in advance, and you should know months in advance, or weeks in advance, or as soon as possible, what deadlines you need to mark on your calendar and be prepared for.

And the other thing, when it comes to responsive customer service, is just keeping you informed on what's going on. Now, unfortunately, the divorce process isn't just a continual step-by-step thing, in most cases, and there's often gaps of weeks, sometimes even months, between things that happen. That's okay. But, you need to know what's going on. One of the best attorneys that I know in the country, that I work with, who's based in Florida, in Orlando, he does this cool thing. At the end of each month, he goes through every case that he has open, and he sends a short video, two minute video that he records at his computer screen, and says, "Hey, John, just want to send you a monthly wrap-up. Here's what's going on in your case. We did X, Y, and Z, this month. Next month, here's what you should expect. Just wanted to make sure that you keep updated." Two minutes. That's all he sends, even if nothing's going on, but if something's happening, or whatever, he can just say ... just do a quick check in, just to know that he's still thinking about you and your situation. If there's a lot more going on in your case, then he'll record a longer video, but you always know where you stand, and you're always informed on what's going on.

Now, speaking of staying informed, we're going to switch to point number three, is that you don't get a surprise bill. This one is one of those shockers. I know attorneys who will rack up ... if this has not happened to you, I guarantee all of you know someone who this has happened to ... is you pay your retainer, and the retainer gets exhausted, and the attorney keeps working for you for a while. Next thing you know is you get a bill for $17,000, or $24,000, and no explanation happens. You're looking there, and you're like, what ... you're just dumbfounded. It's like, where did this bill come from?

I know a lot of attorneys who might lure you in with a, "Oh, we'll just pay a $5,000 retainer and we'll get working," but that $5,000 lasts a week and a half, and then they start asking you for a lot more money. And then I also know attorneys who say, "Hey, you're going to pay me $25,000 up front." Guess what though, there's not going to be a surprise bill. We're going to get this done for $25,000. It might take a week. It might take two years, but you know, there's nothing that ... there's not going to be any surprises. If it only takes a week, you're going to be happy, 'cause you know that the exposure wasn't ... you know, you paid $25,000 for a fast week, but if it takes longer than that, you already know that things are good. But, in any case, they communicate very clearly the cost of what is going on, and you're never in shock when you receive a bill.

Doesn't mean that this process going to be cheap. I was having dinner with an attorney I work closely with, a few weeks ago. And she told me that she has a client that has a very complex custody battle, that was over a million dollars in legal fees. So, it's not necessarily going to be cheap, and hopefully you're not going to spend a million dollars in legal fees, but sometimes it is necessary. But, there were no surprises and believe it or not, this person who spent a million dollars in legal fees is one of the happiest clients that can exist because they were able to get what they needed out of the divorce process. It was a long and complicated battle. There were no surprises. It was going to be expensive. But, it was what it was.

And while I think about billing, as well as the other thing that you should make sure you really understand, is how your attorney charges for billing. You should try and get a sense ... and it's okay if you have to ask this question after you've hired the attorney but, try and get a sense. Do they bill by the quarter hour? Do they bill every six minutes. How do they bill you if you send a quick email? Is that a 15 minute bill minimum charge? Or is it something else? You should figure out what that billing is, so you're not surprised down the line. 'Cause even a 15 minute conversation, for an attorney, who is $600 an hour, can cost you $150 for 15 minutes, which can be a lot of money. And that adds up. And so you want to make sure you maximize the time and the interactions with your attorney.

And finally, the last thing you should be thinking about, and what a good attorney will do for you, is help you out through the case closing process. This is very important, which is just because you sign a divorce decree, doesn't mean the divorce is over. I talked about this on previous episodes, very recent previous episodes. It can be very tempting to just put on the brakes and ... I wish you could see my hand motion, but pretend like your hands are clean, and you can move on.

Unfortunately, it's not that simple. There's a lot of stuff that has to happen after the case is over, or at least after you've signed the divorce decree. And there's a lot of assets that have to move, custody schedules, support that has to be paid, et cetera, et cetera, that need to be documented and done. Every great attorney that I work with has a very specific case closing process, that is quite robust and substantial, and probably has 30 or 40 things on it. And they will help you still through that case closing process, and then make sure that all of the things that you were supposed to get as part of this process, actually happen. And if there is an issue ... and sometimes there are ... that you get those resolved, and so you're not stuck, years down the line, saying, "Hey, wait a minute. Wasn't I supposed to do this or that?" And I actually have some people that I do coaching sessions with, who will say, "Hey, three years ago, I signed this, but I never got this asset. What do I do?" And we have to walk through how to make sure we get those things done. But, the important part is, is all of these things can be resolved right after you sign the divorce decree, so you should be paying attention to that very closely.

So, four things for you to remember. That your attorney advocates and executes ... sorry, I should say advocates for you, and executes a clear game plan for your case. The second thing is that they provide responsive customer service. The third is there's no surprise bills that pop up as part of the divorce process. And fourth, is they help you when the case is closing.

0184: The Major Tax Change to Alimony Coming in December (Everyone Needs to Hear This!) Aug 07, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In this episode, we're talking about a major tax change to alimony coming in December. And I wanna go through what's happening, what you need to know, and how you need to plan for it. And why this could apply to your divorce if you are thinking about getting divorced this year. So at the end of 2017, the Tax Cuts and Job Act passed. This was right at the very end of last year. And there were a lot of different tax changes that occurred to many people. This was one of the biggest tax bills that passed. But, there was a small provision in there that affects alimony. And this small provision can affect many of you in a big way. And so what happens is that certain tax benefits in divorce are being eliminated effective December 31st, 2018. And this is the biggest change in alimony in about 75 years or so. And many people have forgotten about it.

As it is today ... Or actually, I'm gonna tell you what's happening. What is going to happen is from a tax perspective, alimony is going to be treated exactly the same way that child support is. What does that mean? It means a person who pays alimony will not get any tax benefits for paying alimony. And the person who receives alimony will not have to claim that alimony as income starting next year. Now, that is what happens on January 1 of 2019. What happens today? Well, if you get divorced during 2018, there are some important things that happen from a tax perspective. If you are the person paying alimony, and I know many of my listeners are the ones who are going to be paying, then you get to deduct that money from your taxes each year. So, if your income ... And I'm gonna give you an example in just a moment. And conversely, if you are the person receiving alimony, you have to when you file your taxes each year say, "I've got X amount in alimony." And you have to pay taxes on that amount just like it is income.

Now, here's why this is a big deal. And I wish more people were talking about this. The big effect of this is that there is less incentive for someone to pay alimony. And I'm going to give you some examples so we can work with some easy to understand numbers. Let's say someone is going to be paying $10,000 or a little under $10,000 a month. But, we're gonna say $100,000 a year in alimony over a 12 month period. So over one year, they're going to be paying over $8,000 and some a month in alimony. I'm using $100,000 total just to make the numbers very simple. So, someone's paying $100,000 in alimony. That means that person can deduct from their taxes $100,000 in income. Which means they have a substantial tax savings on their income each year. 'Cause they don't have to pay taxes on $100,000 of their income. It's a simplified explanation. And the reason that's beneficial for them is when they are in a divorce situation, that gives them an incentive to pay some of that alimony instead of purpose structuring a settlement in a different way.

But, here's what happens starting January 1 of 2019. That same person who was paying $100,000 in alimony will not get that tax benefit anymore. And so, if they were going to think about what their divorce settlement looks like, that person does not get any tax benefit for paying that $100,000 a year. And now this is only if ... And I should bring up a very important caveat. It depends on when your divorce decree is signed. If you sign your divorce decree this year, then you will still get the tax benefits if you are the person paying alimony.

And if you sign the divorce decree starting January 1 of 2019 or anytime beyond that is when the law changes. And the tax rules change. And so that same person who was paying $100,000, or who was willing to pay $100,000 a year in alimony, may no longer be willing to make that same commitment. Because they don't get any tax benefits for paying that alimony amount. Now, it could be depending upon who's listening. Some of you, we could be talking about $10,000 a year. Others of you, we could be talking about $100,000 a year or a million dollars a year. I have a wide range of listeners in terms of the incomes that you all have. But, regardless of your income, it will affect most of you in one way or another.

Now, here's the reason this is extra important. So, basically what happens is the person who would be paying alimony will at least try to pay less alimony in the future. The reason that's unfortunate is according to the census, 97 percent of the people receiving alimony are women. And so, that will disproportionately affect many of the people listening who are facing or who would in theory be getting alimony. Now, it doesn't mean you should panic. It doesn't mean that you're screwed, or you should get upset and worry, or whatever else. There are many ways around this issue and ways to still get to a good position. And I'll get into some of those. But, you should be aware that things are changing. And things are changing in a big way. And you need to be cognizant of the change.

And one of the things that's very important about this is timing. And this is why we're putting this episode now in August. Because there's only a few months left in the year. And so, if you are facing divorce and you're in a place where ... Maybe you're in the middle of divorce. Or you're in a position where you think you can get this wrapped up before the end of the year. Then this is something that you should consider, because it can help with the negotiating process. If you're already in the middle of the process, great. Now, if you haven't filed for divorce yet ... I'm never one to even endorse divorce, but this is one of those times where you need to decide and think hard. Is now the time to file divorce and get this process going? Because I think I may be better off given what's happening with the alimony rules.

And I'm gonna look at this from both side's perspective in a little bit greater detail so you really understand the consequences and what we're getting to. And the reason when you hear this episode this is particularly important is we're in August as I record this. Some of you maybe listening to this later down the line. But, many states have some version of a cooling off period when it comes to divorce. And what that means is is from the moment you file divorce to the soonest your divorce can be over, depending upon where you live, can be two or three months in some cases. Because that's what the state requires. So, some states will say, "All right. Well even if you agree to 100 percent of the issues in your divorce, it'll take you 90 days before we'll sign off on a divorce. Because that's what the law says." Or some states, it might be 60 days. Or other states, it may be 30 days. I actually have a blog post if you type in quickie divorce. There's only a handful of states where it actually can happen reasonably fast.

But, given that we're in August, some of you August, September, will be the last chance you have if you are in the position to take advantage of these issues. Now, if your divorce process is already commencing. Some of you, it's been going on for many months. Some of you many years. Well, you're actually okay. The real goal would be in your perspective, in most cases, will be to wrap it up before the end of the year to benefit from these ... before the tax law changes.

And why all of a sudden this big tax change? Why did this happen? Well, the simple answer is actually a lot of people were cheating on their taxes. Not saying a lot of you were. But, what happened was there was a multi billion dollar gap every year according to the IRS records of people who were paying for divorce ... Or I'm sorry. So, there was a multi billion dollar gap. So, billions of dollars people were reporting that they were paying in alimony. But, a lot of people weren't saying they were receiving alimony. And therefore, could hide or not have to pay taxes on that money. So the IRS said, as part of the tax bill, that we're gonna change the law. And so, no one's going to get a tax break. And therefore, no one can cheat on alimony.

And so, what I wanna do in this episode .... It's gonna be a little bit longer than the normal ones. But, I wanna go through the scenarios depending upon who you are. And just some things to think about. All of this is complicated. It just is. And it depends on your individual circumstances which decision is best for you. There's no universal right or wrong. Ultimately you should be consulting with maybe an accountant, maybe your attorney, maybe with me. And we can think through what makes the most sense for you if you have these options on the table.

So, I'm gonna start with the person who is paying alimony. If you were the person paying alimony, or will be paying alimony as part of the divorce process, or spousal support or maintenance. It just depending on what state you live in what they call it. It is in your best interest from a tax perspective to wrap up the divorce before the end of the year. Because every dollar you pay in alimony for now and forever in the future, barring some sort of major unexpected tax change, you get a tax benefit for paying alimony. Simple as that. You'll pay less in taxes at the end of each year if you pay alimony. I'll give you a very simple example. If you're paying $1,000 a month in alimony, you get at the end of the year $12,000 deduction in your taxes. Now, if you don't finalize your divorce until sometime in 2019 or beyond, you no longer get that benefit. So for most of the people who are paying alimony, this might be a good reason to start that process.

Now, if you're the person receiving alimony, or will be receiving alimony. I know that one of my most popular videos with many, many thousands of views is on stay-at-home moms and divorce advice for stay-at-home moms. Which is one of the most common populations that I work with and people I get to help. And now some of you, I know from talk to you, might be panicked at this point. But as I said before, don't panic. The situation's actually more complicated if you're the person receiving alimony. I'm going to go through a few scenarios. A few things and notes for you to think about.

Now, if you're negotiating ... Let's just give you an example. Let's say you're negotiating or thinking about getting about $2,000 a month in spousal support as part of the divorce settlement. And you think you're gonna get this down in 2018. But for whatever reason, your divorce isn't finalized this year. And you're gonna be looking at 2019. Well actually if you still get $2,000 a month in 2019, you're in a better position. Because you don't have to pay income tax on that $2,000 a month you would have received. You're better off than you were before. If you get that same amount in pure dollar terms. Hope that makes sense. So, if you get divorced in 2018 and you get $2,000 a month, what happens is you're gonna be paying on income tax on what's going to be $24,000 a year. But, if you were in theory to get the same $2,000 next year in 2019 or beyond, you don't have to pay income tax on that. And therefore, you get to keep all of it. That's a plus.

But, there's a downside. Let's say if you were thinking about or you were probably gonna get $2,000 a month in spousal support this year. Well if your spouse is savvy or your spouse has a decent attorney, they'll say, "Well, hey. I don't get that tax break anymore for it. And you're actually gonna get less. So, we're gonna make some adjustments in terms of what we pay. And maybe we're only going to pay you $1,500 a month instead of $2,000 a month." That could be substantial. Or whatever the equivalent is for them. But, that is something that will certainly happen in the divorce scenario for some people who understand the way that this calculation works.

Now as I always said, there is a way around it. There are always clever ways to structure your divorce settlement. And I speak with you almost everyday about certain avenues you might not have thought about. But, one of them is a lump sum distribution. I've talked about this on the podcast before. If you haven't gotten the archives, you should definitely check that out. There is the ability to get as much money up front. And therefore, you won't have the tax consequences at all. Or they'll be substantially reduced. And you can ultimately, now it's a tricky calculation, but you can ultimately get to the same place you would've gotten all at once instead of doing it over months and over years. Now, you have to go back and listen to the lump sum distribution podcast episode, which is in the store, to understand all the mechanics of that. But is a very good solution, one of several, that could work for you.

So tax law or not, depending on your situation, you could still end up in the exact same place you would have if you structure things the right way. Ultimately, this is a complicated issue. I just wanna bring it up and make you aware of it. There's state laws you have to deal with. There's tax laws you're gonna have to deal with. There's just the divorce process you're gonna have to deal with. Certain states are considering different measures to counteract these changes.

And ultimately, if I were to say anything, you need to bring these up with your attorney. Bring these up with me. Bring these up with your accountant. If you don't have an accountant, this would be a good time to pay for a one off consultation with an accountant. It's interesting. Definitely bring it up with whoever you are working with. I know some very expensive and otherwise very good attorneys who have not said a word about this. Or who were less informed. Or have not brought it up with their clients. It's not because they are bad attorneys. They just have other things going on. One of the things you need to do is bring it up and take charge yourself.

I also know some great attorneys who have called all their clients and are saying, "Hey, here's what we're doing. Here's what we're thinking about. Here's the tax law change. Here's how it could affect you. Here's how I recommend we proceed to either get this done or delay it." It really just depends on your individual case. But, one way or another if you have not had this conversation with your attorney, I strongly suggest that you have it. And also, feel free to reach out to me. Book a coaching call and we can walk through your scenario in a half hour or so. And get the important details with you.

Just some last messages. I wanna reiterate multiple times during this episode, is it's not the end of the world if you don't wrap things up this year. And for some of you, it's just not going to be feasible to wrap up your divorce this year. You might not have started in the process. Maybe you're still gathering information. Or any number. It's not right for your family, or for your life, or for any number of things. And you're still doing your research. It's okay. You will come out through the other side. I'll still be here next year. And we'll still be coming up with good solutions to help you. And interesting and useful information.

But, if you think there's a benefit for you and your scenario to get things done this year, this is a ... We're kind of at crunch time. And this is a good time to really start getting the ball rolling. And making the important solutions and decisions that you need to be making. So, you end up in the best place possible for the long term.

0183: What happens after signing a divorce settlement? (Part 2) Jul 31, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. In this episode, we're trying to answer the question, what happens after you sign a divorce settlement, because the conception is that the divorce is over, but that's not true. There's still, unfortunately, a lot of work that needs to be done even after you have signed the divorce settlement. Because of that, I want to give you a sense of some of the things you need to be thinking about as soon as that settlement is signed because you can't just give up and call it a day. There's a lot that needs to happen after you sign the settlement and before and after the judge finally signs off on it. If you didn't listen to the previous episode, I strongly suggest you do. The two main tasks I group into these categories, the first being ensuring that you get, you receive, and also give up everything that you agree to. The second is that you need to update all of your accounts to make sure they reflect your new reality. Now, I'm going to get into what both of those things mean in depth in a moment. But the point is, is there's still a lot to do. I'm going to give you a process and a list of things to search for. For people who I go through in the coaching sessions, we oftentimes have a post divorce checklist and a post divorce summary of things you need to be thinking about the day your settlement is signed. First thing you do, step one, so you've signed the settlement, what do you do? You study it. What do I mean by study your settlement? Well, you need to gather a notepad, gather your calendar, and put yourself in a quiet room, get some highlighters, some different colored pens, however you take notes, and start making a list of everything that needs to happen as part of the divorce. You need to go, sentence by sentence, and make a note of everything you need to keep track of. If something is supposed to happen on a certain date, might be a house needs to be sold by June 30th, well you need to start putting on the calendar, "June 30th, house must be sold." Or if you get the kids' custody, if you alternate holidays every other year, well, you're going to need a multi-year calendar and start thinking about, "Oh yeah, here's the holidays every other year," and start planning those things out. Or if certain things have to happen on certain days of the week or certain times of the month, if you're expecting a payment or you have to make a payment every month on a certain day, you need to make those things and write those things down so they don't get lost. You need to start keeping track of them. These are going to be integral to your life, going forward, until they aren't. Another thing that you might need to think about as you go through your settlement, if you have to split retirement accounts, I have lots and lots of episodes in the archives about retirement accounts and QDROs and things like that. If you need to spend money or need to split the retirement accounts to get the money into the appropriate places, well, you might need a QDRO, a Q-D-R-O, QDRO. If you need one of those, those often take several months from the time that you get them to the time they're actually executed upon. Something else you need to think about. If you need to transfer money somewhere. All of these things, you're going to need to make a note of every little item that needs to happen as part of the divorce process to make sure that you're organized in there. The way that I like to do it is I actually ... It depends on your system, but oftentimes what I'll do with people is we'll go through your settlement, I'll read every line item, exactly how I described, and I'll put a little Word document together where we say, "Date, June 17th, 2018, this thing has to happen." Or "July 2019, this thing has to happen." We'll put it on one, or two, or three pages, however many pages it takes, and just list them out. Because I actually use a lot of my calendars just in a Word document format because it's easier for me to read than the normal calendar, but it's a great way to just keep everything organized. I can look and I say, "Hey, we're in the middle of August, and so, oh yeah, in two weeks, I have this thing that I need to do." If I don't and two weeks go by and that thing doesn't happen, maybe you were owed something, maybe something else, you need to make a note of that and figure out what to do. Anyways, I think you get that point. The first step was comb through your settlement and keep it all organized. The second step is to set up your new life. This is a step that a lot of people fail to handle properly in part because there's just a lot of moving parts to it and, quite frankly, some of the stuff involved in it is not the most fun thing in the world. That said, it is essential that you take care of these things. In fact, whenever I'm faced with a long, boring, and arduous process, now I don't always recommend this and you shouldn't do it too often, but I will treat myself to a nice bottle of wine or a nice, expensive drink. Now, I don't drink that much, but if I'm going to drink and I got to do some work, I'll get something expensive, treat myself, something pretty good, and I'll say, "All right, I'm going to get through this, but at least I'm going to have a couple of glasses of something nice as I go through these things that I don't necessarily want to do, but they are important. What's the first thing on that list of setting up your new life? Checking your credit report. Credit report is a very important thing to monitor. You need to make sure that everything on it makes sense. Whether you have $100 or $100 million, I strongly suggest you check your credit report. I've sat down with people of all income levels and many, many times you will find surprises on there or things you've forgotten about, and it's an essential thing that you should be doing. When you look at your credit report, of course with anything, you have to make sure that the information on there makes sense. But another thing that you should be thinking about is you should keep an eye out for every joint account. Any account that has your spouse's name on it with your name, you need to be closing. You cannot have joint accounts open. Well, you can have joint accounts open, but it's very dangerous to keep joint accounts open after you are divorced. Here's why. Believe it or not, I've seen examples like this happen. Let's say you have a house with a home equity line of credit and both of your names was on this home equity line of credit, but there was a zero balance, so you never used the home equity line of credit. You just had it, should you need it. Well, a couple of years goes by and, all of a sudden, you start getting collection notices in the mail. It turns out that you never took your name off that home equity line of credit. Your spouse, your ex-spouse for two years at this point has already ... or needed money for something, who knows what, and decided to draw down your home equity line of credit and took a bunch of money out. Guess what? They didn't pay it back, or didn't pay the interest, or didn't pay it as agreed. Who's on the hook for that? You are, even though you haven't used that account yourself, even though you've been divorced. Those little things happen all the time. If you have any joint credit cards, any joint loans, any mortgages, anything with your name on it and your ex-spouse's name on it, close it. Or at least have a very clear process for how you're going to close it to make sure that those accounts don't stay out hanging out outstanding. Now, in conjunction with closing some credit reports and credit accounts, you need to open new accounts. If you have a joint bank account, for instance, well, as soon as you can feasibly close that joint bank account, you should. But at the same time, you're going to need a place to put your money. You need to start opening accounts of your own. I speak with many of you, particularly the stay-at-home parents, but many of you who don't have accounts in your name, it's okay. Not a big deal. Now is the time to start doing that. There's no judgment. There's no problem. You just need to walk into your nearest bank. You don't have to have a relationship with them. You just have to have an ID, it has to be convenient for you, and start opening up your new accounts. Most banks are very accommodating. You just find a place that works for you. Same with credit cards and credit accounts. I've sat with many of you before and we walk you through the process of getting a credit card. Getting a credit card, there's a thousand different options. You have to complete what can feel like a daunting application process. But oftentimes, you just need to do it. I will walk through with you how to open a credit card account. Or you can do it yourself and just kind of do the research and figure out a credit card that is good for you. I know people whose families made millions of dollars a year and they got divorced, and one of the spouses never had a credit card before. We were just like, "Hey, let's sit and figure out how to apply for that so that you can have that at your disposal." I know people who don't make very much money and are super savvy in that regard and that isn't an issue for them. But wherever you are, make sure that you have some of the basic financial things taken care of. Now, shifting gears a little bit, you need to update your will and estate planning documents. As I said, you might need a glass of wine for some of these things. This is definitely one of those topics where a nice glass of wine makes it a little less painful to deal with. Will and estate planning documents. I've talked about this on the podcast before, but estate planning is basically just so everyone knows is estate planning is the process of planning for what happens if something happens to you, meaning if you die or if you're in capacitated. Unfortunately, it'll probably happen to us in one way or another at some point, and so the question is what do you want to happen with your stuff, who do you want making decisions, et cetera, et cetera. There are a lot of questions involved in that that are not necessarily the most fun to think about, but they are important. I want you to write down these four documents. You need a will, you need a health care proxy, you need a power of attorney, and potentially a trust. These four things can be very useful to you. If you want to find someone who can help you with this, you should look for an estate planner near you. I work with estate planners as well, but you should look for a local one. Many of them have fixed fee packages for the basics. It oftentimes costs a few thousand bucks, but it's essential. You need these four documents. You should certainly be asking about these four documents. I'm not going to get into all the intricacies. There's people who spend 70 years, 50, 60, 70 years of their career just doing these things, so I'm just going to tell you to look them up. The will, the power of attorney, health care proxy, and trust. They can be very helpful to you and they are essential for you after divorce. Now, if you already have these documents, you need to update these documents. Most of the time when you are married, these documents are written in the context of giving everything to your spouse to manage and to handle, which, while you're married, oftentimes makes the most sense. But now that you are divorced, these things will need to be updated and you need to go through them. Find a local estate planning attorney to help you. It doesn't have to be expensive, but everyone needs to get those basics done, and if you already have them done, to update them after the divorce process. Next thing you need to do is check the beneficiary on every account. What does that mean? Well, your bank account, your investment account, your retirement account, your pension plan, everything has a place it'll go when you die. You need to make sure that those things are still within your wishes. You might want to give everything to your kids. Oh, I should also mention something important. As I said about the will, the same applies to some of these financial accounts. Many of these financial accounts default to your spouse when you were married. If you don't update them and something were to happen to you, believe me, it happens every day, your ex-spouse will end up with a bunch of stuff that you had no intention for them having, and it could be many, many years or decades later. Just take care of this thing now. You got to look at every bank account, every investment account, every retirement account, and ask the institution that manages it for the beneficiary designation. That's what the term is called. Who is the beneficiary of this account if something were to happen to me? They will give you an answer. It's a very common question. You need to make sure it's within your wishes. You can make it your children. You can make it friends. You can make it a brother, a sister. You can make it anyone. But most of the time, you don't want to keep it as your spouse. Next thing on your list. If you haven't already, you should speak with a financial advisor. Now is a great time to get a financial plan together and one that may work well for you. What you do is you find a local financial planner. Now, I have in the archives I think a seven or eight part series only on the financial planner. If you get the quick start guide, which has all the podcast episodes in it, there is a huge multi-hour series on financial advisors because it's a very important topic. You should check that out. But also, you can ask your friends. I'm sure one of your friends has a financial advisor that they work with. They could be local, they could be online only. There's lots of great financial advisors out there that can help you, regardless of your situation. You should find one. Talk to them. Just because you talk with a financial advisor does not mean you have to hire that person, but it's worth having an initial consultation in that regard to see with one or two or three, to see if one of them may work with you. Finally, speak with an accountant. The year after you get divorced, a lot of things change. What do I mean by that? I mean your tax status changes, you might be moving houses, you might have other things that are changing in your life, and particularly even if you just do it for one year and one year only, this is one of those years where it makes a lot of sense to speak with an accountant in this area and just to explain what's going on, make sure there's no major tax things that you need to be aware of, make sure your life is set up properly. An accountant can really help with that and those things. I strongly encourage everyone, particularly the year after they get divorced, to add an accountant to their team and their list, just to make sure they're not running afoul of any rules and that they maximize their ... or I should say, minimize the amount that they pay in taxes in the following year. A lot of stuff in there in regards to what to do in between signing a settlement or right after you sign a settlement, but this is very important information. It's a lot of stuff to take care of and think about, but you can do it. It's just step by step. That's what I always say. Sometimes someone will say, "Well, what's the next step?" I'll give them the next step. Then they'll say, "Well, what's the step after that?" Most of the time, my response is going to be, "Don't worry about it. We'll get there when we get there. For now, we got to focus on one step at a time and you knock them out from there." It's not much more complicated than that, but you have to kind of do these things to make sure that you take care of the rest of your life from a financial perspective.

0182: What happens after signing a divorce settlement? (Part 1) Jul 17, 2018

In this episode, I want to discuss what happens after you sign a divorce settlement. The past month has been one of the busiest I've had in a while and the end of the year is looking to continue down that path. You know, as I've mentioned on a previous episode, the tax laws regarding alimony in divorce change in six months, and so that's creating a lot of pressure for people to get their divorces wrapped up before the end of the year, because there's often tax benefits to both sides, for wrapping up this year instead of delaying a year when the law changes in a big way.

If you don't know what I'm talking about, be sure to listen to episode 170 for some of the details and I'll be discussing it more in future episodes. But one of the things that's happened over the past month or so is that a lot of cases I've been working on are wrapping up, which is a bittersweet feeling for me.

I'm of course always happy that people are finishing their divorce and they get to move on with their life. But also, I feel a little bit of sadness because I get to work closely, closely with you during the process, during a tough time and then, many cases, we part ways and we don't have to speak with each other any more, which is also fine, but I do very much enjoy working with you. It is the nature of what I do.

And one of the things that a couple people have mentioned as their cases have wrapped up and they said, "Shawn, you don't really speak much about what to expect after the settlement's assigned. What should I be doing?" And I want to provide you some guidance to that effect. Now, of course, it varies for everyone, but I do want to outline some of the details of the divorce process once you have that settlement signed.

Most of you are going to go through the process where you negotiate a settlement and you sign the settlement, versus where a judge makes the final decree in terms of who gets what. Now, some of you do have to go that way, particularly in the tough divorces, but I expect most of you will be negotiating and signing some form of settlement.

And so what does that look like? And then what do you do afterwards? What kind of things should you be thinking about after divorce? One other thing I want to bring up is I have a, I think it's a seven or eight part series on choosing a financial advisor and financial topics you should know after divorce in the quick start guide. It's in the store. It's part of the full archive of the podcast. That might be something for you to check out because that is some critical information.

I mean, it's hours of information just of like basic financial concepts, how you choose a financial advisor, how do you know what to look for, how do you make sure you make the right option? But anyways, one of the things I want to talk about is, so how does the settlement process wrap up and then what do you do afterwards?

Now, for some of you, your settlement process actually might occur in two phases before you get to the settlement agreement. There's the part of the settlement that I might call the term sheet, which is ... in this part of the settlement, you outline basically everything that you want and your spouse wants on a sheet of paper or a few sheets of paper, without really legal terminology in there.

The way to think about the term sheet in a way is like, if you ... and I've had some clients do this, if you and your spouse, were to negotiate by email and you say, "I want this house," or "I want the house, you can keep this car, I want this car, we're going to split custody in this way," but you just go back and forth by email.

And then you say, alright, here's the final email with everything that we want. And you say, okay, good. That's the kind of the term sheet part of it. And what you do with that term sheet, I call it, because that's what you use, that's what you call it in the investing world. You say, all right, we have a term sheet, let's make it legal.

And so the term sheet is here's all the details that we've agreed to, and then you take it to your attorney and say, "Can you please draw this up in the appropriate legal framework so the court can sign off on it?" And so, for some of you, that's the first phase. Now, not everyone goes through that step of negotiating a term sheet first. Some of you go straight to the actual legal settlement document.

In which, you're going to get to this document in one way or the other, but sometimes it's just depending upon your process, you go through the term sheet phase first. But when you get to the legal documentation, this is when the attorney drafts up exactly what each of you is getting.

And the legal documentation, you're going to really want to pour over every word, every phrase, every sentence in this document to make sure that it not only matches what you agreed to, but also is what you want. I've seen cases where people sign settlements and they don't read it closely and you go back a few months later and you look at it and you're like, "What did that paragraph mean?" Or, "That's not what I wanted it to say. I thought it was supposed to be this," and that can easily be avoided by studying your settlement in the first place.

And let's just say you've gotten through those two phases. So you've got your term sheet, you've gotten a settlement and everything is wrapped up and you submit the paper to the court. That's an important step three, remember, just because you signed the settlement agreement ... This is an interesting topic that I actually will get into now; I didn't anticipate talking about it now.

So depending upon what's going on, you can sign and agree to the settlement agreement and sign it, have everything done, but not submit it to the court. And if you don't submit it to the court, you will never be divorced. But there are reasons sometimes that you might not want to submit that settlement agreement to the court and you might want to delay. Now, there's many moving parts when it comes to delaying, particularly with the tax law changes and other things.

But, if you wanted to delay, you can, and I'll give you reasons that people delay that come up pretty regularly. One is for tax purposes for filing jointly. So let's just say, you know, we're getting to the end of 2018 as I record this and, you know for tax purposes or you think for tax purposes, you want to file just one more time as a married couple because it makes sense for you. I know plenty of people who will negotiate their full settlement, sign the paperwork and not submit it to the court and just say, "Hey, we'll submit it to the court in 2019," the next year. Because for tax purposes, it'll save them many thousands or tens of thousands of dollars.

I've had some lesser common reasons, so one of my favorite reasons, I had a client who I'll just say lives in a town with one golf course and in order to keep their membership active at the only golf course in town, they wanted to stay one more year on the married membership because as soon as they became a divorced couple, they would be doubling their membership dues.

And if you know anything about golf courses, those dues can be in the tens of thousands of dollars. So to save one more year playing golf, they decided to save some expense. They decided to keep their membership, or themselves divorced, or excuse me, I should say, let me restart. They kept themselves married until they renewed their membership as a married couple for one more year, so they could save up the extra money for the golf course and the increased golf dues they were facing.

There could be any number of reasons that you may want to delay your divorce. And so, some people may do that, but you also need to keep in mind that if you have not submitted the paperwork to the court, you cannot get divorced and you should not be making other major financial decisions until you know exactly what is planned. And I'll give you an example of why that's a big deal.

I have a client who needs to ... I actually have several people in this category, who need to refinance their home. And as part of the refinancing process, the first thing the mortgage lender says is, "Hey, where's the paperwork that says you are divorced?" And so, they will ask for, that court signed, judge signed, county signed document that says I am officially divorced before they can make any major financial moves.

But let's say you submit the paperwork and you have everything in the court and everything is good to go. What do you do? Well, you wait. Unfortunately, just because you've signed the paperwork, just because you submit the paperwork, still doesn't mean you're divorced. And depending upon where you live, it could still be many, many months before you are divorced in the eyes of the law. I'm going to give you an example.

I spend a lot of time in New York, in New York City, and have several clients there. Some cases, this is crazy, even as I think about explaining it, you can file for divorce and submit the paperwork in August, so the eighth month of the year, and I'll tell you why this is relevant in just a second. We can file the paperwork then. You can get through the end of the year and not have official divorce paperwork.

I've had cases where someone files paperwork and August and they don't get the divorce paperwork until February or March of the next year. And because the New York court is so backed up and there's so many cases and not enough judges and not enough resources, unfortunately, in many cases, that it takes the court six months or can take the court six months to officially recognize the divorce.

Now, of course, they know that they'd be causing a lot of trouble for people if the divorce didn't go through until February. What happens is the New York court is so busy and they understand how much turmoil that could cause is they will backdate the divorce papers oftentimes. So if you file for divorce in August and they don't get to it until February, they'll say, "Hey, sorry, we just got to it. But because you filed it an August, we're going to consider you legally divorced as of December 31st of the previous year."

But the point is to bring up is that just because you filed the paperwork still means you need to wait. And from a practical perspective, you've just gone through a very intense process. And even though it's not over yet, one of the first things I recommend you do is you wait.

No need to rush into major decisions. Right after you file the divorce paperwork and you submit it to the court. First thing I say is breathe. Relax. Take a week or two. Focus on yourself, focus on your kids, your family, your work, whatever you've been neglecting during this process. Now that you've gotten this major step involved, take some time to get back to normal or to prepare for the future and don't make any major decisions unless you absolutely have to. If you take some time to breathe, you will get into a position where you can think clearly about the next steps of your life and the next phases of your life and get organized and prepare for the things that we need to do and that you will need to do as you go forward.

Once you've taken some time to breathe, decompress, relax a little bit. I want to cover two main areas that you're going to need to focus on going forward. I'm going to cover these in the next episode. The first thing you're going to need to do is you're going to make sure that you get and give up everything that you agree agreed to as part of the divorce process. And the second thing you should do is update all of your accounts to make sure they reflect your new reality.

Stay tuned for the next episode. I'm going to get into those very soon and get into some of the nitty gritty details of what those two things mean.

0181: The Most Important Financial Document - The Balance Sheet, Part 2 Jun 27, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

In the previous episode I gave you a high level overview of a balance sheet and if you haven't listened to that episode, be sure to go back and hear it because the balance sheet is one of the most important documents that exists in divorce, so I want to make sure that you get it and you understand the key details of the balance sheet. It's so important as I said in the previous episode that it's something that I update every month and have for many years and probably will continue to until, for the rest of my life. It's that important of a financial document to keep track of.

In this episode I want to discuss a little bit about specifically how you prepare a balance sheet and how you go about it. If you were going to prepare a balance sheet from scratch, how would you do that process? What do you need to know to prepare your balance sheet? Well, one thing I'll say is a balance sheet easier to produce when you ... it's easier to produce when you a computer specifically if you use Microsoft Excel. You don't need to be super fancy at Microsoft Excel, but if you know the basics of adding and summarizing columns, over the long term it's a much easier method to do. That said, you can do your balance sheet by hand on a couple of sheets of paper. If you have good handwriting and a calculator and you can keep things organized. That is a very legitimate method and people ... I'm a firm believer in doing things by hand.

I still have a lot of old schoolness in me, even though I run basically an online business, but some things like a balance sheet I still do by hand all the time. Particularly if I don't feel like updating every number, but just want to get a sensor if I'm in a meeting with a new person, I can just pull out a sheet of paper and say "Hey, let's just go through the balance sheet and we can put it together on a slider of paper just like that", but in even case you're going to want to have a calculator and what you should do if I were going to create a balance sheet from scratch is I would think about all of your most valuable things.

What are you most valuable things? Oh, I forgot to mention something important. One thing about a balance sheet is that a balance sheet is a snapshot in time, so the numbers on a balance sheet, you know I said I update it all the time, well whenever I update a balance sheet it's as of that particular day. In divorce situations usually you prepare your balance sheet as of the date of separation, but you can always update the time periods related to the balance sheet, so you have to pick a day. So that day might be June 1st. That day might by October 22nd of the previous year. That day might be today. Whatever day you pick is the day that you're going to value all of your accounts and all of your assets, that's what account balance you're going to use and when that's really important is if you have an investment account for example.

Let's just say you're listening to this towards the end of the year and let's just say at the beginning of the year the investment account had $100 in it, but later in the year that investment account made some money and now it's got $120 in it. Well if you got separated earlier in the year, you might have to use on the balance sheet the $100 number even though it's worth a $120. Depending upon your divorce situation, you have make the call as to whether you want to change that separation date. If that's even possible, like that's a big statement I just kind of slid in there, but you have to determine what day is most advantageous for you in terms of valuing assets like that, so you got to pick a day. For me I just pick you know whatever day of the month I decided to open and update my balance sheet, but something that you need to keep in mind.

Now when you're preparing a balance sheet, I was saying you need to think about all the stuff that you own. All of your assets, so if you own a house that's an easy one. Almost everyone has a bank account, so you put your bank accounts on there. If you have retirement accounts, you go through each one of your retirement accounts and list the total value of the retirement accounts and if you have a 41K, I usually write down on the line John Smith 41K, so I know what type of account it is and I'll say value, $237,556 and I will make a note as to what date I did it, so if it's June 1st, I'll just put the June 1st date on there and hopefully I said when you do it you keep every account on the same date, but you start with ... if I were to start with the assets.

Start with the house because everyone's going to have, most everyone's going to have a house. If you rent then you're not going to list it as an asset, but if you own a home of some kind, then you will put the home value and if you have a mortgage the home is a little bit tricky because you all have debt attached to it, but you have a mortgage also put the mortgage value on there and put if you have a second mortgage or something else, put that value on there as well and that way you can get a total home value minus mortgage and any other debt, so you can start there.

Then I say all right, well here's all my bank accounts, so I go through each one of my bank statements. I put in the amount of money that's in there, easy enough and I just list out each account, who's name is on it, so if you're doing it for you and your spouse, you should make a note as to who owns said account. So you do bank accounts. You do your house. You do any investment or retirement accounts, list every one of those.

Then you go to vehicles. You put all your vehicles. You can put ... oh other real estates, so I forgot, if you have a second home or you have a rental property or whatever else, don't forget to include that and then think about all of your other stuff. Could be furniture, collectibles, intellectual property, who knows what, but whatever that thing may be, you add it on and go from there and you add them all up. You put them nice and neat into a column. You group them by category and that way you know all of your assets. You take the sum total of all your assets. Maybe it's $100,000. Maybe it's $100 million, who knows. Likely somewhere in between there and you know the total value of your assets and who owns them.

Second thing you do is now you got to think about your debts. As I said some of you have debts. Some of you don't. It really just depends on your situation, but on the next side of the page, so if I split it down the middle. I have the left side with all my assets, the right side of the page with all my debts and so you list out every credit card you have or if you have a student loan, you list out a student loan. Or, if you have a personal loan that you have, you write that in there and you would go from that point and start working on your debts and you list them all out and you summarize your debts. I'm just going to use some basic examples.

Let's just say on the left side of the page, I like using $100 because everyone hopefully can follow $100 math. Let's say you have $100 of assets in between your houses and cars and retirement accounts and everything else. Let's say you have $20 of debt, what does that make your net worth on your balance sheet? Well your net worth on your balance sheet is $80. You're going to take all of your assets subtract out your debts and you're going to end up with a net worth of $80 and then you're going to have your balance sheet.

Now one of the things that's very important is making sure you attach the right value to the different assets and debts that you have. What do I mean? Well one thing I ask everyone. I will ask 100% of you when we prepare a balance sheet, how did you come with the value for your home? If you went to Zillow and said "Hey I typed in my address and Zillow said it was worth $357,000", I will say "Okay, thanks" and we may use that value for now, but I will say we need to get an appraisal to figure out how much this house is actually worth or I'll say you need to talk to a real estate agent to determine a much better value for this house because Zillow is not the most accurate place to go.

If you have a car and you have a 1997 Mercedes E300, I don't know if they may an E300 in 1997, but if you had bought that car in 1997 that would have been a $60,000 car. If you list that asset as $60,000 in 2018 when I'm recording this, I will say "Hey, you know that car was worth $60,000 something then. It may sadly only be worth $3,500 now", so we need to make an adjustment there and so you need to be cognizant of the actual values for certain accounts. Bank accounts are easy. You'll align again, you'll get the number on your bank account and you're good to go.

Same with investment accounts, but for any assets that don't have a clear value like homes and cars and jewelry, we will need specific appraisals for those types of assets, so just something to think about in that regard and then as I said, once you prepare your balance sheet what happens next?

Well you have to understand the information. Look at it. Make sure it all makes sense. Ensure that it meets your expectations or maybe there are some surprising things in there, which happen. The second thing is you have to really internalize your balance sheet, particularly when you're going through divorce and you have to think and what assets are most valuable for me to keep, or what do I want to keep? What assets do I not want to keep? What do I want to give away? How do we handle the debt situation?

So I've worked on many a client who had debt and we had to write in the divorce agreement we're going to sell you know if I were just going to toss out an example. Let's just say "Hey we're going to sell the house, the proceeds are going first to pay off the outstanding credit card debt" and then second whatever remains after we're going to split between us 50/50. That something that we start thinking about, but we got to start thinking about "Hey, what's the best settlement that we can get for you in that situation?" I'll give you a case that I've been working on lately where there were a lot of real estate properties, but in this situation the person who was determining their settlement wanted all the real estate, but they were going to be left with zero dollars in cash, which is not a good position to be in and I said "Hey, I understand that you're going to have all this real assets, it's great, but you're going to need to have some cash in a bank account" and so, while you might want to keep all these real estate assets, maybe left's find a way for you to get either from a retirement account or something else, some day to day funds that you have so that you can live your life normally and plan for some expenses that you're going to have after the divorce process is over.

You don't want to be real estate rich and cash poor. That's not always the best position to be in depending upon your life goals and what your immediate needs are and this person had some tuition payments coming up and so they were going to need the cash one way or the other. Trying live off the cash from the rental income plus save up enough for tuition, it just didn't make financial sense and so, that's one of the listings that we can look at. If you remember the previous episode I mention that we split up the assets and we said there's $100 in assets total and one spouse is getting $80 in assets, the other is getting $20 in assets. Well if you look at the balance sheet you can start to figure out, well maybe that actually makes sense given their situation or maybe that's a terrible deal and we need to make some adjustments, but when you prepare your balance sheet correctly you can quickly and easily identify all of the things that you need to know in a very usable format.

The balance sheet is meant to be a very simple asset and simple analysis I should say for you to review and have a clear picture of how your finances will look and so you use it all the time to understand hey, if this scenario happens and we adjust the balance sheet, does that leave me in a good position? That's a lot. The balance sheet I could talk about for a lot of time and the ins and the outs and it's actually one of those things that differs so much between each individual person. It's hard to sometimes cover all the different nuances of a balance sheet, but you know if you Google balance sheet you'll find some details on it yourself, but I want to give you just an overview of kind of what it is and how to start thinking about it and how you can prepare yourself on a sheet of paper and it's something that should be at the forefront of taking control of your life both during the divorce process and afterwards as you go through this time and as I said, it's something that we work with with 100% of the clients that I get to work with as we prepare that balance sheet so you always know where you will stand financially during and after the divorce process.

0180: The Most Important Financial Document - The Balance Sheet, Part 1 Jun 14, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the United States and get personalized help. Learn about coaching services here.

Thank you for listening! Find a transcript of this episode below.

We're almost 200 episodes into the Divorce and Your Money show. There's a lot that I've covered, but there's still a handful of topics that I haven't gotten a lot of depth on. Sometimes you might notice that there's a little bit of a gap between recordings, and that's actually just simply because I'm working with you. So sometimes, particularly on busy weeks or sometimes busy months, I don't always get to record a ton of helpful episodes. But in this one, we're covering one of the most important topics that I can't believe I waited so long to cover.

This is something that ... This topic is something that we do with 100% of the clients that I work with on the ongoing coaching packages. Now, in a coaching call we can't do this topic, but anyone I work with longer term throughout their divorce process, we start by what we're going to cover in this episode. And, I realized I haven't really explained it in depth to you and why it is so important. Actually, what we're going to talk about is a financial document that is so important that I do it myself and check mine every month. For you, we'll do it every time something happen in the divorce process. For some of my clients who I work with after divorce is over, we do it for the foreseeable future every quarter or every half a year to make sure that everything is on track.

This is to me perhaps the most important financial document that exists, particularly when you're thinking about the divorce process or even the rest of your life. And what is that? It is a document that we call the balance sheet. A balance sheet, if you work in the corporate world, has to do with .... Every one of your companies, if you work for a company or if your spouse works for a company, prepares a balance sheet or at least they should be. Basically what's on that balance sheet is all of that company's assets and their debts at a certain period of time.

What we do is we take that same concept. So if a company owns a building, for example, an office building, well, that office building gets recorded as an asset on their balance sheet. Well, let's say that company has a loan from a bank. Well, that gets reported as a debt on that balance sheet. Basically, what a balance sheet does is it tracks the value of a business over time over specific periods.

Well, one of the things that we do in the divorce context is take the explanation or the utility of a balance sheet in the corporate world and apply that to your personal finances. So, we do a personal balance sheet. That personal balance sheet summarizes all of your, either individually or as a married couple, all of your assets and your debts and puts it into one handy page. Basically we take all of the stuff that you own, could be houses, could be cars, could be furniture, it could be jewelry, could be other valuables, and we put ... It could be retirement accounts. We put all of that on a page, and then we take a list of all the things that you owe. It could be a mortgage, could be credit card debt, could be a personal loan, could be a student loan, could be some other ... could be tax payments that you have that are outstanding. We put those on the other side of the page.

Basically, what we're trying to figure out is two things. One is what does your total financial picture look like? Just very simply is if we put everything on one page, what does it look like? Then, second is as we're going through the divorce process, how do we make that as people are negotiating different settlement options and different settlement proposals, well, how does that adjust your personal summary and does that leave you in a position in the future where your personal assets and debts are in a good spot? And I'm going to get into those questions a little bit more later, but I want to talk a little bit more broadly about the balance sheet.

As I said, basically it's just all the stuff that you own and all the stuff you owe. Some people I work with don't owe much. So actually, you might have nothing on your owe side of the balance sheet. But what you do know is if you have everything you own and you add it up and every ... minus, everything that you owe, you have your total net worth. It is basically like ... Now, be very ... I'm gonna have to clarify my language with my next sentence. A balance sheet is basically like your statement of net worth with a big but. The statement of net worth or the financial affidavit that you complete is usually directed in the form of a court document or a particular format that your attorney uses.

Unfortunately, while that document is useful to start gathering the information, if you ever look at a financial affidavit or statement of net worth, they're not very usable on an ongoing basis. They are a legal document. So what we do with a balance sheet, and why it takes a lot of time to custom create these for each one of you when we work together, is we take all of that information and put it onto one or two pages so that you can easily see a quick and clean snapshots of your assets and your debts on one page. That way we can see your net worth in an immediate snapshot.

That's very important because when you look at a ... I'm going to take the New York form because I have a lot of clients in New York and one of the ... If you ever look at the New York financial affidavit, the New York statement of net worth form ... I did a calculation one day. I went and added it up because I was curious myself. There's something like, if I remember the number correctly, somewhere around 170 different individual line items that you have to go through on your New York financial affidavit.

Well, most people, even those with a super complex financial lives do not have 170 different line items that they need to keep track of. Really, the most that most people have is about 20 to 30 things in terms of accounts, and assets, and debts that we need to keep track of. If I had to just guess on average, somewhere between 20 to 30 things. Some people have a few more, some people have a few less.

But what we do is we take the 20 to 30 most important things. Sometimes if they're smaller items on there, we just lumped them into another category. But we just take those key items, put them on one sheet of paper that's easy to read, group them by asset type. What do I mean? So if you have five bank accounts, we put them into the cash grouping. If you have three retirement accounts, we put them into the retirement account category. If you have a house we might put it on its own, particularly if you have a mortgage or two. We might put just a house or a real estate category.

Ultimately, you're going to have one sheet of printer paper that says here is all of your assets and your debts. It's very clean, very easy to understand. 100% of people find it useful. And as I said, it's something that is so important that I do my own balance sheet myself every month just to make sure that I am on track and to see how things are changing. And in the divorce process, it's exceptionally important because you get to see on one clear page where all of your assets and your debts are, how much they're worth.

And what ultimately happens is, as I was alluding to earlier, as you get to start to evaluate different settlement proposals, you get to see. So what we'll do is we'll do, you know, assuming you're a heterosexual couple, which is most people that listen to this, but not all, you will have a husband side and a wife side. On the husband side, there'll be a settlement proposal on the table. I don't know if you're the husband or the wife, depends on who's listening at the moment. But we'll put here's what's proposed for the husband on one side, here's what's proposed for the wife on the other side and we'll look.

I'm going to use some simple numbers for the sake of discussion of the balance sheet, but let's just say there's a total pot of $100 on assets. Well, if the husband is getting $80 in assets and the wife is getting $20 in assets, we might say, "That doesn't look so fair." But, actually, maybe it does. Because what if, you know, the ... But or maybe we'd say, "Actually, that is fair," and there could be a reason for that because the wife in this situation, even though she's getting $20 an asset, or an in assets, and the husband's getting 80, maybe the husband's unable to work and so he needs extra assets to live on, whereas the wife is going to have a bunch of income down the line. Or maybe this is the way that they structured a lump sum payment instead of paying ongoing support.

But, you can see that immediately when you have a balance sheet. It gives you an instant ability to understand, "All right. Here's my financial picture and here's what it's going to look like after the divorce, assuming we go through this proposal. Looking at this proposal, I think it's fair or I think it's not fair, and we need to make some adjustments or whatever." Then, after the divorce is over, you can keep updating your balance sheet every few months and you can say, "Hey, am I adding to my savings or subtracting from my savings? Are my investment accounts going up or are they going down? Is my house worth approximately what I thought it was?" You can keep refining these things to know how you're doing financially. That is the short, short introduction to the balance sheet.

So what I want to talk about in the next episode is some of the mechanics of the balance sheet, and really how do you make your own balance sheet. It's something that I do with all of you all of the time, but one of the questions is also always, you know, how do you do it yourself. I do have a handful of clients who've actually already prepared their balance sheet before I work with them, and I want to teach you the important stuff and the important elements of the balance sheet because it's going to be very useful for you going forward.

And you know, even if you don't do it yourself, you say, "Hey, Shawn. I want you to do my balance sheet," or, "Hey, other local certified divorce financial analyst. I want you to do my balance sheet," or if you find a financial advisor you like just in general that you want to work with after the divorce process over, say, "Hey, can you prepare a balance sheet for me?" even if you don't ultimately do it, you need to understand what's going on behind the scenes, or at least I would like you to understand what's going on behind the scenes so you understand why this is so important to me and why it's something that can be useful for you for literally the rest of your life. So, make sure you listen to the next episode coming out in a couple of weeks and stay tuned.

0179: How to Build Your Credit in Divorce May 17, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the United States and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. Depending upon your situation, you may be in a position where you don't have much credit. And what is credit? Credit is, at least in this country, it's a concept that ... it determines whether or not, or how trustworthy you are in terms of receiving a loan, and a loan could mean many things. A loan could be something like an actual credit card, a loan could be a mortgage, a loan could also be a promise saying that you're going to pay your rent. That's a form of a loan. Credit in the United States is a very important concept, because it affects a lot of things in your day-to-day life, and oftentimes you may not realize it. Let's just start with a simple example of why credit's important. If you're trying to get a new home after divorce ... I know some people who are trying to get a new mortgage or are trying to rent a home after divorce ... well, one of the first things that anyone is going to do, unless you have all the cash upfront, and most people don't, one of the first things people are going to do is they're going to ask you for your credit score, and they're going to ask you how your credit profile looks, to see if they're willing to extend that mortgage to you or if they're willing to rent you that home or rent you that apartment. They're going to check your credit to do that. Another situation is if you need a credit card. A credit card can be very useful. Even if you have the money to pay for things, a credit card can be helpful for your daily spending, and you pay it off each month. Or if you need to get a car loan. These are all things that depend upon your credit, and every person, if you have credit, is assigned a credit score, and they have a credit history that these different financial institutions or lenders will be looking at. But when it comes to the divorce situation, many of you might be in a position where you have very limited or no credit history, which creates a challenge. The weirdest part about credit in this country is that it's a chicken and the egg problem, is that you need good credit to qualify for a lot of things like a home loan or qualify for a good credit card or qualify for rent, but to qualify for those things you have to build up your credit and your credit history and credit report. I know some of you, if you did everything in your spouse's name, might not have that detailed credit history, might not have had a credit card in your name, might not have had an auto loan, might not have had many of those things that, unfortunately, in this country are very important for your credit. And so when you're in the divorce situation, it is now your time to start setting up these important accounts, and that also even extends to setting up your own bank account. While it's not specifically a credit thing, it's just as essential and closely connected to these items. And so in this episode I want to discuss a few ways that you can build your credit, and we're just going to start with some concrete action items. It takes time to build up your credit. I mean, it can take ... There are some steps you can be taking today regardless of where you are, but some of these items will take months and years to generate a satisfactory credit history. But when I think about all things in the long term, you're going to have to start doing it at some point, so why not start now? One of the first things that you should do, outside of ... The first thing you should do clearly is to get your credit report. There are credit bureaus. You get a free credit report from them. It's becoming very common. Or you can go to websites like Credit Karma, but get your free credit report to see what accounts you may have, or if you have none, it'll tell you that as well. But that's a good starting point to figure out what your credit score is, what your financial picture looks like, at least from a credit perspective, and to start building your credit and improving your credit going forward. One of the things that's kind of most frustrating about the credit system is that in order to have credit you have to take out loans. That's not the best thing in the world, but in order to build up your credit, that's basically what you need in some forms. Now, the debt can be short-term, might be just a month or so, and you might pay it off every month, but that's basically what's required for you to build your credit. So one of the first things, after you get your credit report ... I'm going to approach this from a perspective that you have no credit history at all, and I do have some clients that I work with on a regular basis that, even though they have assets and money, they don't necessarily have a detailed credit history. And so we're going to pretend like you have none. If you already have a limited credit history or a great credit history, great. You can skip this episode or listen to some of the other specific things. But I'm going to assume you don't have anything for the purpose of this episode, and I'm going to try and help you get on your feet. And so one of the first things you can do to start building your credit, outside of getting your credit report, one thing you do is you get a secured credit card or a credit card at all. Now, most of the time, if you don't have a credit history, you're not going to be able to get the American Express Platinum Card or the Chase Sapphire Preferred Card, which are some of the better credit cards on the market today, depending upon what your needs are. You might not be able to get that immediately, but you can get something called a secured credit card. Basically, it means you give them some cash upfront, and they hold that cash onto you, and they give you a credit line equal to the amount of cash. So basically, if you were to give them $1,000, you pay them, basically, $1,000, and they say, "All right, well, here's your great credit card. You can spend up to $1,000." Now, you're supposed to pay it off with other funds, but you can spend $1,000, and if for whatever reason you don't pay it off, they're just going to take that $1,000 from you and go from there. Now, the thing about a secured credit card is, it's a great starting point for building your credit. Now, it's not a traditional credit card. A traditional credit card, you don't pay upfront. You don't give them money upfront and then pay them back later, but a secured card is nice, because it reports that you have credit. It's a good way to say that, "Hey, yeah, I've been making payments. I have this credit line outstanding, and I'm starting to build trust." So if you've never had a credit card before, you can look for a secured credit card. Another thing you can try is look for store credit cards. So if you like shopping at an Amazon or a J.C. Penney or a Walmart or whatever else, they all have their own versions of credit cards. You might want to check those places and apply in there. They oftentimes have less stringent credit requirements. And then also, you can do a Google search for credit cards for people with limited or no credit history, and I guarantee you some credit cards will pop up. Now, the downside to these types of credit cards is that, although they build your credit, they tend to have very, very high interest rates, in excess of 20%, meaning if you were to spend, using my example before, $1,000 and not pay off your credit card at the end of the month, they are going to charge you over the span of a year, they could charge you $250 in interest. That's 25%. So you have to be very careful with these secured credit cards and some of these credit cards if you have limited credit history, because they can be very expensive if you do not manage them wisely. The next thing you can do is you can think about becoming an authorized user on a credit card. So if you have someone who you trust, maybe a sibling, that would allow you to be an authorized user on a credit card or something like that, or a cosigner with you ... Authorized user and cosigner are two very different terms. Authorized user just means that you get to use someone else's credit for a credit card, but the person whose primary name is on the account is the person who is responsible for that card. A cosigner is a little bit different, in the sense that both people are equally liable for what happens on that card or on that loan. But in any case, you can try and become an authorized user on a card, or better yet, become a cosigner. Both require the person who is providing their name to really trust you, but it is a good way to start building your credit history, and you can get joint credit cards in those names to start building your credit. Maybe you can try an auto loan. Another way to build credit is if you need a new car ... "new" doesn't mean necessarily the latest edition car, but if you need a different vehicle, you can try getting an auto loan. An auto loan, while it might not be the top tier auto loan, might be more expensive than traditional auto loans, if you're paying your auto loan on time ... Maybe you have to pay a bigger deposit upfront, which might happen, but they may allow you to get a loan, and as long as you keep paying that loan on time ... I forgot to mention this earlier, is what happens with all of these credit accounts, whether it's a credit card, a mortgage, an auto loan, all of these accounts get reported to the credit agencies. There's three big ones. If you just look up credit bureaus online, it's a subject for another time. I also have some other episodes in the archives about this subject. But it gets reported and says, "Hey, John Doe or Jane Smith has this credit line," and each month they'll say, "Oh, he or she's been paying it on time," or "not been paying it on time. Here's their average balance, and here's the credit score we're going to calculate for them." An auto loan could be a way to start building your credit, and so long as you're paying the loan on time, then there are many car dealerships that are used to working with people with very limited or bad credit, and they can find creative ways to make sure that you get into a car. And so long as you keep making your payments, then you can start building your credit, and the more you build your credit, the more you will be eligible for other things down the line. A cell phone plan. Getting a cell phone in your name is also a form of credit. Oftentimes, the cell phone companies will report your credit numbers, and that can be very valuable to you. You just make your cell phone payments each month, and they will report that information to the bureau. Here's an example of how credit is used all the time in the cell phone world, is most people don't actually go to the store and spend somewhere between 500 and $1,000 on that cell phone and then walk out of the store. Most of the time, people are spending ... they might have a plan where they pay $25 a month until that phone is paid off. Well, that $25 a month is a form of credit, and that's how a lot of people can keep up with the latest generation phones, because they're not spending $1,000 in the store. They're spending the $25 a month for however many years until they've paid off that phone or until they trade it in for the next model. That's a form of credit. Another thing you can check is look for a personal loan, get a small loan amount. There's lots of peer-to-peer or personal loans companies available for people to start building their credit. Now, the big downside to a personal loan is that oftentimes the interest rates can be super-high, particularly if you don't have credit, but it is a way to start that process. Now, when you go through all these ways to build your credit, you gotta be careful. You don't want to have a bunch of debt outstanding, but you do need a little bit of credit to be able to get more credit and be able to live your life and function normally as you would often like to, or maybe as you were before, except now things are in your name. And so one of the things you gotta be really careful is make sure you don't borrow more than you can, and don't leave outstanding balances. So if you have a credit card that gives you $1,000 of spending, well, make sure that at the end of the month you actually pay that $1,000 back. Don't keep that $1,000 outstanding and start paying that really high interest rate I mentioned before. Don't miss payments. You know, if you have a payment due on the 23rd of the month, make a calendar notification that it's due on the 23rd, or better yet, set up auto billing, so that automatically those payments get taken out. Even I had to set up auto billing, because I have different accounts and things like that, and then you'll go three days and start getting a bunch of phone calls, and you're like, "Why is Chase calling me?" It's like, "Oh, well I forgot to make my payment on time, just because I was busy, nothing else." And so I switched to auto payments, so automatically they just pay the balance each month, and I don't have to think about it. And also, don't spend too much. You know, just because you have the credit doesn't mean that you have to use it. So if someone gives you a credit line for $1,000, you don't have to spend $1,000 each month. You might just spend $100 of that 1,000 on groceries, and then pay it off at the end of the month, and that is just as good for you as you build your credit. These are some things for you to think about, particularly if you have limited credit in divorce, and you're trying to get back on your feet. The sooner you start these things, the better. You don't have to wait until after the divorce is over. You should start these things today, and start building your credit, building your profile, and start getting to a position where ... This is one of those things that's a long-term process. Your credit's going to be with you for the next decades, and so the sooner you start with this process, the better off you'll be, because it's a slow process. And so even if you have a lot of other things that you're trying to figure out, spend some time. I have applied, I've helped people apply for credit cards, where we get on the phone together or we go on the computer together, and we teach you. We go through what you need to put in for the different line items so you get approved for a credit card, to make sure that you start getting your credit. Or we'll compare credit card offers together, so that you start making the right decisions and start getting yourself in good financial shape, both during the divorce process and as you go on with the rest of your life.

0178: High-Paying Post-Divorce Jobs that Require Little or No Experience May 02, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. In this episode I'm going to discuss an important topic that I don't hear discussed very often. We're covering what jobs can you get when you have limited experience in the workforce. The reason I bring this topic up is because I have had a lot of discussion about this subject on coaching calls for the last few months and I think that it would be very helpful to talk about some of these things in the podcast. This topic, excuse, me is much more important than many people think and for two particular reasons. Reason number one, if you are facing divorce and you might not have worked during the marriage, maybe you were taking care of the kids or doing other things, one of the big questions is what jobs can I find after divorce that might pay me a decent income so I can get on with my life. I want to give you some ideas in this episode of some jobs that actually pay pretty well. Now, you might not be making six figures on day one but you can make a decent salary. Now, the other reason, reason number two that this is an important topic has to do with all of you on the other side of the equation, which is if you are going to be the person paying support particularly spousal support or alimony, one of the very important things you should be thinking about and trying to negotiate is what jobs your soon to be ex-spouse could obtain. What's important about this because if your spouse, your spouse may not have worked during the duration of your marriage. Might be five years, might be 20 years or more or anywhere in between. If your spouse didn't work that's very understandable for a number of reasons. If your spouse has skills or has the capability of getting a job, even if that job only makes $20,000 or if it makes $50,000 or makes $100,000 or more. Well that money you can oftentimes subtract from the spousal support burden that you would have to be paying that spouse. So, let me crystallize it for you very simply to make sure that that point is clear. Let's just say I'm going to keep the numbers very simple, but these might be higher for some people or lower depending upon who's listening. Let's say that you have to pay $50,000 a year in spousal support to your soon to be ex-spouse. Well, if you know that they can make $20,000 in income, be it as a teacher or an assistant or any number of jobs I'm going to talk about in a bit, well you can request and negotiate that instead of paying $50,000 a year in spousal support, you only pay $30,000 a year. That can be a substantial substantial savings to you. I want to stay on this point for a bit before I get more into the jobs. Even though many people listening might not have an extensive work resume, if you are or if your spouse is of solid physical and mental functioning, there are a lot of job opportunities out there when you put your effort in. One of the frustrations that I hear from a lot of people is that they'll say or particularly people about to pay support is they'll say one of two things. Either they'll say that my spouse didn't work and so I have to pay them more. That's partially true. They'll also say my spouse doesn't want to work. Well, if your spouse doesn't want to work and you're going to have to pay them support, you know, most people don't want to work. We would all like to have a permanent vacation or hang out with our friends or just raise our kids exclusively. Unfortunately in divorce situation you may have to or that person may have to realize that they now need to work. One of the things is that there are often jobs available for them. Another thing to think about is that there are people called vocational experts and if you go to episode 164 of the Divorce in Your Money podcast I discuss that in depth as well and that can be a great source for you. If you're looking for a job you can go speak to a vocational expert but also if you have a spouse who's capable of working but maybe has some skills and could find a job, well, you can present to the court or to, as part of the negotiations, you can present how much income they could be making given their experiences. That could directly subtract from the support that you may be thinking about paying. Now, I could talk about this topic for a long time and I am going to get into it quite a bit on this episode but I could stay on this point about vocational experts and jobs. It even surprises me the range of scenarios I see every day as I get to work with you in terms of who wants to find a job, who doesn't. I have some clients who have never worked before who are very ambitious about taking control of this process. I also have clients who were the earners and their spouses were trying to figure out well what kind of job could their spouse who might not have ever worked before, what kind of job could they get and how much could that be and does it make sense given their situation. Anyways, what kind of jobs are we talking about? The point of this is to discuss jobs that don't require a lot of experience. I know that oftentimes one person may have just graduated high school and that was it. Then they raised the kids, took care of the family and that's the extent of their work experience is just a high school diploma. Others may have graduated college, maybe worked a couple years, anywhere in between, or were on the path with a successful career but chose to stay at home with the family. This applies believe it or not with both men and women. I deal with a ton of women who were the earners in the family and the father stayed at home. They're the ones without the extensive job experience. So it applies to most families that I see and get to work with. I'll just say many families that I get to work with and people I get to work with during this process. The question as I said what are the low paying, what are the limited experience jobs that pay a decent salary? I'm going to go through some job ideas and these jobs I know can pay you between 25 to 75 thousand dollars a year even if you don't have any experience. This means day one you're starting with a decent salary. There's plenty of articles online about some of these things as well. So you should look for high paying jobs or take some job quizzes if you don't know which one of these is going to fit for you. There's tons that I'm not even going to get into or get into with any depth that have a lot of opportunity within them. So, let's jump in. I'm going to just jump into different ideas. I want to provide some ideas and some thoughts on different careers that you may need to think about or keep in the back your head because the job requirements are you show up and do the job, you don't have to have specialized degrees in many cases. The first category is assistant. Assistant, I'm going to break down to several subcategories because assistants can apply to a variety of fields. You can work as a public relations assistant. You can work as a legal assistant in a law firm. You can work as a medical assistant. You can work at any kind of administrative assistant if you have that type of skill sets. Actually, when you think about an administrative assistant in the more general category of assistant, a lot of those jobs are work from home. A lot of those are part time and that's actually what I use. I have work from home and part time assistants and that works very, very well. They get to work flexible hours and I don't always have a full time staff person because I don't always need a full time staff person or at least in terms of the assistant categories. So it works for all of us very well. So, that's a great job to think about that almost anyone can do. Real estate agent. Now real estate agent requires a license in every state but usually obtaining the license is not overly burdensome. There are depending upon where you live in the country, it can be in exceptional opportunity. One thing about real estate agents is if you have a good network, you can generate commissions on sales and that can provide a very substantial income boost for you. Another area speaking of commissions and sales is salesperson. Now salesperson can apply to literally any industry that exists. Every business has sales. You can do it for any type of company. It can be a local business, it can be a national company, it can be anywhere. If you have the ability to sell a product from Tupperware to cyber security software to cars to houses to furniture to absolutely anything, you will have have the ability to have a sales job. In fact, I am going to toss this out there for the listeners, if you are an excellent salesperson, I have a job for you. There is always opportunity in the sales world. Now, you have to be able to do it, it's not a free job offer but if you are good at sales I always, always and will for the rest of my life have a job opportunities for great sales people. So if you have that personality, that network, that hustle, that ability to generate a sale, there is always a place for you. Those careers can be very, very lucrative. I have friends who sell everything from water bottles very well and make thousands, tens of thousands and some hundreds of thousand dollars on small products like that. I also have friends who sell multi-billion dollar contracts to governments for military equipment. At the end of the day, we're all just salespeople with different products. All right, I love sales so you can see I spent a lot of time on that one. Project manager, very important role. It's sort of a step above if I would say administrative assistant so you might be able to command a higher salary. But also a great part time work at home job or a good in person job if you are someone who is organized and can stay on top of multiple projects. Particularly, if anyone is good at raising kids and if you have multiple kids, these days that is identical in many ways to the project manager role. So you might have that skill set and not even realize it already so that could be a great job for you. Teacher. Teacher is a job that also oftentimes require some sort of certificate or training, but also like a real estate agent is not too burdensome. So teacher can be a great job. Now teaching doesn't pay super high most places on the pay scale. That said, it is a very good job that many people can consider pursuing if you like that. One thing I'm going to toss out, this is just neither here nor there at least in terms of the specific episode, but if you're thinking about the teaching route there is also lots of opportunities in the special needs world which is something that I like to think about a lot. It's not always the classroom, there's lots of great ways you can help in the teaching world if you do your research and figure out where there is a need because there's often a lot of students that are neglected out there that you could certainly make a big impact in someone's life. The next category. City, state and government jobs. Now, this is a super, super, super, super broad category and it really depends upon where you live. There are tons of government opportunities. It could be in your local city government, it could be for a specific department like the water department or could be in the municipal building or could be at the library. Could be something like that. There could be state jobs that are available. Of course if you have a federal government branch for whatever department, I'm recording this near tax time, so for whatever reason the IRS is on the top of my head. If you want to work at the IRS good on you but there are many different government jobs. The Federal Reserve Board is also just a few blocks away from me. That is just a government job, a very cool government job but a government job. And so if you have an inclination or if you're looking for a job those jobs are great, they have excellent hours and great benefits and could be a place for you to work. Then there's always retail and restaurants so you can work at any of the retail stores. There's retail everywhere. I know it's a struggling industry at the moment but there are still jobs available and they will always need help with good people and restaurants as well. I think we all know restaurant jobs. Then there is this special category that I leave for last that is also near and dear to my heart and that is online work. Now this is an emerging category. It's a very important one. If you have any sort of technical skills or an interest in technical skills, an interest in the internet and the online world, 100% of you are listening to me online in part because I love online and the internet world and I think it's very fascinating. If you have an interest in that world there are jobs for you. You can learn. There are tons of these coding schools that exist many of which are very good and you can go to class for three months and the tuition is substantial but not overly burdensome. It's in a few thousand to maybe 10 thousand dollars or maybe 15 thousand dollars. But, over those three months, they teach you all you need to know about coding in a particular area and most of the schools have partnerships with employers and you can get jobs in the 60 or 70 or even higher range after just a few months and a few weeks of learning coding skills. So if you have any inclination in that world and you like computers and I actually have, I know some of you from working with you, particularly those who live out in California certainly are inclined or are tangentially involved in the world but that is also a great opportunity. That's location independent. I get to work with you all across the United States because of the internet and technology and knowing some of the basics that are involved. It is also a great way even if you have no experience, if you're willing to learn and it's something that may interest you, it is an exceptional opportunity out there and there are some great ways to make that work. These were all just ideas. I hope you find them thought provoking, fascinating. They don't require any experience. Basically, you can take someone off the street, anyone, even if they've never worked before and train people to do these jobs. Depending upon where you live in which job you pick and what the opportunity is, you have the ability to make a very decent income after divorce. Or if it is your spouse that you're thinking about, you should be pushing for a, if your spouse has the mental and physical capacity and they're not full time taking care of the kids, you should consider putting this as part of your settlement or discussing that point saying that within six months that spouse is expected to have found a job or however you want to structure it, that's something that we structure in many different ways. Could be a year, six months. Could be immediately but they're expected to find a job and to work and that can substantially decrease your support burden for many, many years to come and save you thousands or tens of thousands or if not hundreds of thousand of dollars in support over a lifetime if you think about these jobs and figure out a way to include these as part of the settlement. Then just for the other side of things, it's a good way to be independent and not be dependent upon your spouse's support check coming every month. Because when it doesn't arrive one month that can be an incredibly nerve racking experience.

0177: Downsides of Mediation in Divorce Apr 25, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the United States and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. In this episode, I'd like to discuss mediation. It's something like 95% of divorces, roughly, depending upon the statistic that you read, are settled out of court. Mediation is one of several ways you can settle divorce out of court. Now, you can do what's called a do-it-yourself divorce, which means you and your spouse just work everything out yourself, you prepare the papers, submit them to the court, and you get divorced. You could have collaborative divorce, which is an option for you as well, which is a specific divorce process. You can look it up. There's episodes on it in the archives of this show as well. You can do what's just called a negotiated settlement, which is also common, which is where you and likely your attorneys will go back and forth and figure out and reach an agreement. Hopefully a reasonable on, and hopefully in not too much time, and you talk through with your attorneys, and you settle things. And then there's mediation, which could be a part of many of the other options I already mentioned, but it is its own process, and it can help you stay out of court. Actually, in some states, depending upon where you live, they actually have court mandated mediation, meaning before you go in front of a judge or have the opportunity to go in front of a judge, the court mandates you go to mediation in advance. But in this episode in particular, I want to discuss some of the downsides of mediation because, on the surface it, can sound like a great thing to do. I am a big believer in mediation when it works for you, but there are some things you have to be aware of and there are upsides and downsides to every part of the process. Actually, one of the things that I do a lot of thinking about when I get to work with you is are you thinking about things from your spouse's perspective as well? Not because I'm going to be defending or working with your spouse, but if you look at things from his or her perspective, you might be able to come up with a much better settlement that's better for all parties involved than if you only are coming from your self interests and not thinking about what might work for them or what their attorney might say. The reason I want to bring this up in the context of mediation is that on the surface it sounds great. You might have had a friend who went through mediation and it perfectly resolved their divorce, or you may have heard about it or your attorney may have recommended it, or whatever the case may be, but I want to talk about some of the downsides to mediation. But before I get into those downsides, let's talk about what mediation is. I want everyone on the same page and in mediation, now, there are some variations, but the idea is basically you and your spouse and a neutral third-party work things out in your divorce, any sticking issues or maybe all of the issues, to hope to help you get to a resolution. Now, when you go to mediation, there's a neutral third-party, as I said before. It could be a retired judge. It could be a professional mediator. Actually, one of the attorneys I work closely with, he shares an office with a professional mediator, and they have a conference room, and you can see them hashing out days of mediation. So usually who's there, it's going to be you, your spouse, a mediator, and then both of your attorneys, most of the time, and this where we're going to start getting to some of the downsides, but we'll get there in a minute. One of the things that's very important as well is when you go to mediation, or the objective, I should say, is to come up with a resolution to your divorce. Therefore, you should be cognizant and prepared for your mediation the same way that you would prepare for a trial. Now, mediation is far less intense, at least in terms of, I won't say it's less intense emotionally because mediation can be very draining, very high stakes, and there's a lot going on, but it's less intense in the sense that there's a nonbinding process, typically, with most mediations. If it's not working, then you don't have to come into an agreement. Where there's enormous stress involved in the court processes, you have a random judge who cares very little about you in most cases. Nothing against the judges, but if you're sitting and you've been practicing law for decades and you hear every family law story and one attorney creates a crazy story for their client, and the other attorney creates a totally opposite story for the other client, it's hard to really come with an informed decision. You often also have very limited time in the court setting to work out whatever issues you want to think about. And so, when you go to court, the stakes are very high because those decisions are final. I guess you can appeal in some cases, but they come with a lot of pressure. Whereas mediation, you want to come as prepared as you might for a trial, but the pressure level is a little bit lower. But anyways, I digress. I have a tendency to talk quite a bit. It is a podcast, I suppose. But I want to discuss the downsides of mediation. I want to discuss three things in particular that people don't always consider when it comes to mediation. The first is that when one spouse is not participating in good faith. The second is that mediation can be very expensive, and the third is that, I already touched on this a little bit before, is that mediation doesn't replace a judge and mediation is nonbinding. So let's jump into each of those three points very quickly. The first is that what happens if one spouse is not participating in good faith. This is actually one of my biggest frustrations with the divorce process. I think anyone who's dealing with it, the divorce process, a.k.a. everyone listening to this show, you know that a lot of things about it don't seem right. Most of you listening are just trying to get what's in your best interest and a fair settlement and move on, and make sure that you get enough to live a life, the best life you can after the process. But when you start going to mediation, oftentimes we're dealing with, I'll just call, an irrational spouse. The spouse that really is either distrustful of the mediation process or just has such unrealistic expectations that mediation is not going to be productive. Unfortunately, I see it all the time. What happens is usually the person that I work with because I'd say almost everyone who books a coaching call with me understands what's going on. You might have substantial questions about particular issues, but you get the process. You're well-informed, and you get the general gist, but you have some questions or clarifications. You're facing a big decision and you want to know a second opinion or a third opinion, sometimes in my case, or just see if what's in your head or what you're hearing actually makes sense. Well, the challenge in mediation is when you go and you show up to mediation and you show up with your attorney, you're prepared, you know what you want, you're ready for the negotiation, but your spouse is so unrealistic and uncooperative or just doesn't get the whole process, you can end up in a position where, well, you don't get anywhere. Unfortunately, you end up in a spot where the day of mediation is completely wasted. If you know that your spouse isn't going to work with you to try and resolve some of these issues, then you are not in a good spot. You need to really question is is it worth even showing up in the mediation or is it going to be a waste of everyone's time? Now, the second issue with mediation is that it is expensive. Mediation is not cheap at all. Here's why. When you go to mediation, you usually do it for a day or a half day of a session. Something like that. You book a mediator. So you're paying however much a mediator's hourly rates are. It could be a couple hundred dollars an hours. It could be several hundred dollars an hour for a mediator. And so, if you think about an 8-hour day, you could be spending a few thousands dollars on the mediator alone. Then you are bringing your attorney. You are now paying your attorney's hourly rates for a whole day. It's not like the 15-minute phone call. It's not like the couple hours to prepare a document. This could be a full day of your attorney's full rate in hourly fees. Not only your attorney, your spouse's attorney. And so, it's you, your spouse's attorney, your attorney, your spouse's attorney, so it's at least five people participating in the mediation process for a day. Now, if mediation does not resolve itself in that day, and it often does not, you're going to be doing that times many days. I know people and many of you listening could end up spending at least three or five thousand dollars for a day of mediation, but could be many times that. If you have to have multiple mediation sessions, you can look at bills in the tens of thousands of dollars very quickly just from the mediation process. And now, what if you bring your accountant with you? Or what if you bring a business evaluation expert with you? What if you bring a vocational expert with you? What if you bring any number of potential experts with you during the process? Well, unfortunately, that only adds to the bill. If you're not getting anywhere in the mediation process, and I see it happen, unfortunately, as I said, every day, where people go and they make no progress during mediation and end up spending thousands, if not tens of thousands of dollars, in the process. Well, guess who wins? Not you, but your attorneys and that is the situation. Mediation can be expensive, so you need to be aware of that going in and make sure that it really is going to be fruitful for you. And then finally, the last thing I want to bring up is that mediation is non-binding. You're going to understand that all three of these points are closely connected because mediation doesn't lead to a final ruling. I tell people this all the time when you come for a coaching call. A lot of times, you come for a coaching call and either you're a few weeks out from mediation or it's about to happen tomorrow, whatever the case is, but I'll say like, "Look. You gotta understand that if you're in the mediation room and things are not going your way and you're going towards the approach of a wholly unacceptable settlement, mediation is, generally speaking, non-binding. So if it doesn't look like things are going to go your way, or at least in a reasonable direction that you can live with, you don't have to be forced to sign that agreement in the moment with all the emotions flowing and the adrenaline and everything else going on.” When it comes to the mediation being non-binding, that has the potential opposite effect as well for your spouse, which means that if you're coming to an agreement or you think you're going in a good direction, and all of a sudden, your spouse just says, "Screw it. I'm not that interested in this deal. I don't like it." Well, guess what? You don't come to a deal and that time has been, I don't want to say wasted because it's not always wasted, but kind of. You're not getting that money back. That's a part of the process that you really have to understand. It's different. There is something called binding arbitration, which is used oftentimes in commercial disputes, commercial cases, but a little less common in family law. I don't see it too often. That and those cases, whatever the mediator, or in this case they call it the arbitrator decides, is final, but in a divorce situation, that's not the case. You should just be informed. That's the goal of this podcast always is to make sure that you understand all sides of the issues so that you can make the best decision for you. The three downsides to mediation, again, I'm just going to sum them up real fast before departing. The first is that one spouse may not be participating in good faith. Second is that it can be expensive and third is that mediation is non-binding and it's not like going in front of a judge where a judge's ruling is final. It is a non-binding process and that comes with its own set of downsides.

0176: What Do You Want From Your Divorce? If You Don't Know, it Could Hurt You. Apr 18, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. I'm going to start off this episode with quote from Yogi Berra, or at least it's attributed to Yogi Berra, and he said, "You've got to be very careful if you don't know where you're going, because you might not get there." The reason I read that quote is because one of the first questions as soon as a divorce process either hits you in some cases, or if you're planning for it, or maybe if you're in the midst of it already, one of the first questions or one of the main questions you should always keep in mind is, what do you want? What do you really want during the divorce process and after it's over? If we have a coaching call together, it's actually one of the questions I usually ask people on calls, and it's really just to try and figure out, well, do you know what you want out of life? The divorce process is going to be over. So are you making decisions during the divorce process that will help you for the rest of your life? Also, what do you want out of the divorce process itself? So one of the things you should be doing, regardless of if you're about to sign the settlement papers or you haven't filed for divorce yet but you know it's coming, or you're in the middle of divorce, doesn't matter, one of the most important things that you can do as part of this process is really set your goals. When I say set goals, I want to put them into two contexts. Goal number one, or set of goals number one, and I like to make goals pretty simple, so I usually just do three things, I do these myself, I'm not going through divorce, but I do them for other things, like as I think about what I want for the podcast, for instance, I have goals for the Divorce and Your Money Show and how many people I can help. But you set three goals. You put your top three priorities or goals on a sheet of paper and you say, "Hey, priority number one ..." And these are my goals, or your goals in this case, for life. So as you think about, "Well, what do I want in life?” If you are going through the divorce process, most of the people I talk to, let's just say you're 60 years old for sake of discussion, and in good health, statistically you've got another 20 to 30 years of life ahead of you, maybe longer. So you have a whole ton of life to think about. What do you want out of those 20 to 30 years? Or if you are one of my younger clients and you're 30 years old, well, you might have 50 to 60 years. The divorce process is only going to last hopefully a few months or maybe a year or two, but then you're going to have decades of life to think about. As you sit down right now, what are the three things that really matter most to you? Could be something having to do with a fulfilling job or financial security, or something for your kids, or being able to travel, or whatever your life goals are, write those three things down and figure out what kind of future you really want. This is independent of the divorce. You assume the divorce is over and you're just living your life. What does that look like to you? I put those on a piece of paper and I review ... You should be reviewing those goals at least, I think, every day, and I'm going to tell you why in just a bit. The second thing, the second set of goals that you should be putting down is, what are the goals for your divorce? Now, I get to speak with you every day on a coaching call, and I hear a range of thoughts about the divorce process and what you want out of it. Sometimes people will call and they'll say, "I want every asset ever and that's what we're going to do." Other times people say, "Well, I just want this to be over. He or she, my spouse can have everything. I just want this to be over with." Then there's everything in between, where some people say, "Well, I understand, even though of course I want everything, I understand how this process is going to go and I want something that's a fair and reasonable settlement, all things considered.” Well, whatever your situation is, you need to sit down and think, "Well, here are my three divorce goals." Some of the divorce goals might be involving custody arrangements or support arrangements, or debt, or what kind of assets you have afterwards and after the process is over. One of the things is, is you want to write these down. I say top three because three is easy to do. You do your top three goals from your divorce. You can do 10 if you want. But I like top three because it really forces you to select your priorities. So here's what happens after you have those three goals. So you're going to have two sets of goals, one set of life goals and one set of divorce goals. What you should be thinking about during the divorce process is, how do I make decisions today that get me closer to those goals? Now, everyone that you work with as part of the divorce process should have a good sense of your goals, because if your attorney knows what your life goals are and what your divorce goals are, he or she can structure a divorce settlement that helps you get closer to those goals. If you tell me your goals, and you don't have to tell me, most of the time I'll ask you, particularly if we're working on a more in-depth case or situation. Sometimes people call with a very specific question and we go through the specific question. But if we work on a longer term basis, I'll ask, "What do you really want? And how do we get you closer to those things? And how do we come up with a strategy and daily steps to move you closer to those goals?” So one of the things that you need to be doing is sharing those goals with everyone that you're working with. And another thing that's important about your life goals and your divorce goals, particularly the divorce goals when it comes to sharing them, is, sometimes we'll say, "That's not realistic." Either realistic or not realistic, or a bad idea. So sometimes someone will come and they'll say, "I want every asset. I don't want my spouse to have anything after the divorce." I'll say, "You know, I understand that's a goal of yours, but that's not realistic, because if your spouse has a semi-competent attorney or if you go in front of a judge, no one's going to let that happen except in the most extreme of scenarios. So you need to adjust your goals.” Conversely, sometimes someone will say, "You know what, just give my spouse everything, I'm just going to start fresh, and I just want this over next month and we're going to move on." I'll say, "Hey, you could do that if you want, but that's not a good idea, and here's why." Ultimately the goals are up to you, and you might want to adjust your goals a little bit. So the point is, is one of the reasons you write these down, you share these goals, is so that everyone's on the same page working for you. Now you have your two sets of goals, and you start figuring out what you really want. What happens is, if people know what you want, people like me or like your attorney, or just you yourself having clarity as to what you want out of the divorce process, you can start taking actions and creating step by step actions to achieve those wishes, those wants, those goals, that direction that you want. So whenever an issue comes up, particularly as part of the divorce process, you're going to faced with some major issues about assets, about kids, about life, and these are substantial questions. Well, when you have your goals, when you know what you want, you will have a north star to help guide you. Basically, when you're facing a particular issue as part of the divorce process, you can say, "Well, does this fit into my life goals? Does this fit into my divorce goals?" If it doesn't, then you need to make ad adjustment or take a different action. Or if it does fit in the goal, you can say, "Yeah, you know what, this is what I was aiming for.” But if you don't have your goals and you don't keep those high level things in mind, you could end up running down a path that you never intended to take. Or, as I started with the Yogi Berra quote, "You've got to be very careful if you don't know where you are going, because you might not get there.” The other thing I want to leave you with as you think about setting goals and deciding what you really want out of both life and out of the divorce process, you need to have some flexibility. So one of the most important things and one of the most fun parts of my job, and yes, I do have a lot of fun, I get to help people with very hard questions, I know that you're in a difficult situation, but everyone I work with is a good person who finds himself in a tough spot, so one of the questions or one of the things you have to keep in mind is, there isn't a fixed path to your goals and sometimes you need to have, or all the time you might need to have some flexibility regarding them. So I'll give you a very concrete example. I'm going to keep it generic but concrete. Let's just say you want to have enough support, enough spouse's support to live comfortably for the next 12 months while you get yourself on your feet and find a job. Just using that as an example. Well, you might be thinking in your head, "Well, I need $3000 a month in support to achieve that goal." Well, that may be true, that might be one way to achieve your goal. But what if there is another way? What if that other way was, you got a lump sum payment for $34000, which is a little bit less than the monthly amount, but you have it all upfront, and you have the money to live on and you've achieved the same goal of that financial security for a year, but it came in a different form? Or what if you ended up with a house that's fully paid for or close to it and therefore your living expenses are lower than you anticipated because you don't have to go find a new place, and instead of $3000 a month you only need $1500 a month? It's about flexibility. In all three examples you've gotten to your goal of being able to live comfortably for the next year, but there were different paths to get there. So when you think about your goals, and as I said, that's a very micro example, but for any goal, whatever it may be, you have to realize that there are different ways to achieve what you were looking to achieve. So having flexibility is very important when you think about your goals, because they don't always happen the way that you originally had in mind. But just because they didn't happen exactly the way that you thought they were going to happen, doesn't mean they're not going to happen. It just means that you need to be open to alternative solutions and alternative ways to getting what you want to get to and have out of life and out of your divorce. So as you think about the divorce process, really sit and start by asking yourself, wherever you are, what do you want? Are the decisions you're making right now setting you up to get to that point that you want later down the line? If you keep that question in mind, and I actually, believe it or not, I have a daily email that comes to me every morning, it comes at like 3:00 AM, so by the time I get to my desk, whatever time I get to my desk, I usually get up pretty early, but I have a daily email that says, "Here are my goals." And I get to look at those every morning and then I look at my schedule and what I plan on doing today, and I say, "Hey, does this take me one step closer to my goals?" If it does, then great. If it doesn't, then I'm working on the wrong thing. So I keep those in mind for myself. It is something that you should be doing as well, to make sure you stay on the right path and make sure that you are getting what you want out of this process.

0175: Understanding Expenses: Why Your Monthly "Nut" is Key to Post-Divorce Planning - Part 2 Mar 27, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. In the previous episode, we were setting a stage for understanding your fixed monthly expenses. If you didn't hear the previous episode, go back and listen to that one first before you continue on with this one. What we were discussing is you need to know your fixed monthly expenses as accurately as you can in order to really plan for not only to negotiate a settlement that's truly workable for you, but also so that you understand what your post-divorce life will look like from a financial perspective. Because, you're going to have to know what that is, and you don't want to be surprised by the results. Really. One of the things you should be thinking about is if the result that you see today, given your current life style, doesn't look like it's going to be feasible going forward. You can start planning those things, and the changes you're going to need to be making now, and start thinking about what kind of changes you need to make today so that when your divorce is over, you can live on what's a realistic and feasible budget going forward. Now, one of the things to think about is some of these things do require planning. If you're thinking about selling the house, that could take you six or eight months, or longer, depending upon where you are from the time you decide you want to sell it to it actually being closed upon, and you having funds from the house, and if that's going to help you reduce your monthly expenses, and that's something that's feasible given your situation. You need to start thinking about those today rather than waiting until six or eight months from now and try and rush and scramble. What I wanted to do in this episode, though, was really discuss an example of how your, a few examples of how understanding your monthly expenses can be useful to you. Let's say you do a calculation. I'm going to try and use simple math, because I know it's really hard when you're on the treadmill, driving in the car, or doing walking around, which is where I listen to podcasts all the time, or cooking, or doing any number of things at the moment to keep up with math, in particular. But, it's very important to illustrate some points, and for better or for worse, if you are getting divorced, then maybe you haven't been involved in the finances. You're going to have to know these numbers going forward, because you can't, like the old ostrich, you can't just stick your head in the sand and pretend like the lions are going to go away. These numbers, although they're not lions, they are expenses, they're here, and you need to know what they are, and you just need to be prepared for them. Here is what's important. Let's just say, for instance, that you have $10,000 a month in expenses, which is $120,000 a year. Easy numbers to work with, $10,000 a month times 12 months is $100,000. Let's say you're going to be the person receiving spousal support. I'm going to say, in this case, you were a stay at home parent, and the laws in your state, and what you're negotiating, or whatever else, you can expect $6,000 a month in support, or $72,000 a year. Remember, you have $10,000 a month in expenses, and you're going to receive $6,000 a month in support. What does that mean? It means that you have to make up $4,000 in income to keep the bills from racking up, and racking up debt. What does that mean? It means that you need a job that pays you at least $4,000 a month in this scenario. Or, to put it a different way, is at least $48,000 a year in income from your job in order to stay current, in order to cover your monthly [inaudible 00:04:40], your monthly expenses. You're getting $6,000 in support, you have $10,000 of expenses, you need $4,000 a month in a job. Of course, I'm oversimplifying things like taxes, and variable expenses, but that's the point, is, you're going to need to know that you're going to have to either go back to school, or hopefully you maybe already have a skill, or whatever else, but in order for you to keep from living off of your savings, or to keep from racking up debt, you need to know today that in this example, you're going to have to make $48,000 a year in your own income after this divorce process is over, so you need to get to it. Now, let's play with this simple calculation again when it comes to expenses. Now, let's say you know that right now you have $10,000 of expenses, $10,000 a month in fixed expenses. What if you look down and you went through the worksheets, and you made a list of all your expenses, and gathered up your numbers and you know that it's $10,000 in expenses now, but you look at some of the things, you look at a few of the items, and you say "I think I can cut some of these expenses. Some of the small ones I can cut out, some of the bigger ones I can cut out." Maybe, because this is the most common, what I'm going to use as an example, but you're thinking to yourself "You know what? I think we can cut this house expense, we don't need this big house anymore, because it's just going to be me, or me and one of the kids, or the kids have grown." Whatever else, it doesn't matter. You know, you're thinking that "I don't need this big house anymore, and I can downside, and move to a smaller place, and save some money." After you look at your budget, and you look at your expenses, instead of $10,000 a month, you're now at $7,000 a month, or at least you think you can go to $7,000 a month in expenses. Now, $7,000 a month, remember the first exam- ... we're starting at $10,000, but you say "You know, I can make some life style changes, leave those broad, and then get down to $7,000 a month." $7,000 a month is $84,000 per year in fixed expenses. Now, $84,000 a year in fixed expenses, all right, still heavy, but a lot better than $120,000 a year in the previous example. You have $7,000 a month in expenses, instead of $10,000 a month. We said, in the previous example, you were getting $6,000 a month in support. Guess what? Since you've reduced your expenses, all you need to make now is an extra $1,000 a month in income to cover your expenses. Instead of needing a job that pays $48,000 a year, which is probably a full-time job. You only need to make $12,000 a year in order to keep from living off of your savings, or rack up any debt. $12,000 a year is not a very high burden for most people. You can probably find a job, part-time, or even some of the stay-at-home jobs that will easily pay you that extra $1,000 a month. You could even drive for Uber these days and make $1,000 a month extra. The point is this, is simply by reducing those monthly expenses, those fixed monthly expenses, you went from needing to make $48,000 a year, to $12,000 a year just on that $3,000 a month difference. That's a huge thing to think about. Now, your numbers are going to vary, this was an oversimplified example. But, the point is the same, is that if you can cut your monthly expenses, particularly after divorce, whatever your situation is, you can put yourself financially in a much better place, and have a lot more breathing room than you would have otherwise. If you ever wanted the complaints, I get complaints about attorneys sometimes, because they don't always have the best bedside manner. But, sometimes, attorneys will say to you, as the client, they'll say "Yeah, yeah, you just got to sell your house, and move on." They might say it like that, but they're really just doing the same calculation we just did. They could've said it better to you, because you have so many things going on, but really, they're saying "Look, if you can cut your expenses down quite a bit, I know the support laws in the state" or "I know what your income is, and what you're likely going to have after this divorce process is over, if you cut and sell the house, you might be able to make some substantial life style, I wouldn't say life style improvements, but you will not be in a position where you're always trying to catch up each month, and just treading water for the future." Now, the other thing I wanted to mention related to this is, when you think about your monthly expenses, I know we talked about big monthly expenses, but we can also consider some smaller monthly expenses. One thing that people think about, and often forget, is that there is no monthly expense that's too small to reduce. What do I mean by that? I mean, you need to think about, of course, the big expenses, but also, even the tiny ones. Let's just say, because I may have been watching Netflix earlier, let's just say you have a $10-a-month Netflix subscription. Most people don't really notice the $10 a month, it's such a small amount for most people, and just occurs once a month, and you kind of say "Hey, I don't really need that," I mean, you don't really ever cancel Netflix, not a lot of people cancel, because it's such a small amount in a given month. But, something to think about that most people, and this is how I think about monthly expenses, $10 a month, times 12 months, is $120 a year. $120 a year times five years is $600 over five years. The question you have to ask yourself is is Netflix worth $600 to you? Or would you rather use that $600 for other things? That's just from a $10 a month subscription. What if it's something bigger than that? The point is that monthly expenses, no matter how small, they really add up, because they occur every month until they disappear. A simple one, also applies for my life today, is I am, if you were to see me in person, I like to go to the gym, and I eat a lot of food. I also live about 40 feet from am Original House of Pancakes. One of my favorite meals is four eggs, six pieces of bacon, some toast, some jam, some butter, some coffee, and I eat that meal multiple times a week. But, I made a change in my life, because I was like "Look, I got adjust my monthly expenses." I'm always trying to think about ways to make my life more efficient as well. I said "You know what, instead of going over to The Original House of Pancakes, sitting down, spending $12 on my favorite meal, what if I spent 10 minutes, and it literally only takes 10 minutes, to make that same meal myself?" I get eggs, and scramble them, and put toast in the oven, and everything else. Then, in 10 minutes times several times a week, I spend $4 on ingredients, $4, instead of the $12+ I was paying several times a week at The Original Pancake House, and I like my cooking even better than theirs. Just that little change, saving $8 three times a week, we're going to call that $24, that adds up to quite a bit. All for less than 10 minutes of my time to put together, times years, that's a lot of money. Another example of cooking at home, just in terms of expenses and things to think about is salads. I like to eat lots of salads. I was paying $11 at the salad place near me, I went to the grocery store, I bought a big container of salad greens, and some fruit, and some olive oil, and vinegar, and a couple other toppings. Now, in the span of about 70 seconds, and instead of $11, for $2 of ingredients I can create a healthy fresh salad that was just as good as the $11 I was paying before. You multiply that, let's just say I save $5 a day on average on food, that's $35 a week, that's $140 a month, which is $1600 a year just on a $5 a day food change that I made in my life, which is also helping me be healthier, and other things. But, I, like you, want you to be very cognizant of all of your monthly expenses, big and small. Because, when you're in divorce situation, you're really going to need to understand your finances, and understand where the money goes. Are you spending efficiently? You're going to probably have to make some adjustments, and now is a good time to really dig down, and see what's essential to your life, and what you don't need anymore. I know people who've gotten rid of babysitters, or things like that, that weren't huge burdens, but they ended up just being happier doing things themselves, or not having someone in their life. All of this, this time of your life is an opportunity to not only understand your finances a lot better than before, but there's no better excuse than "I'm getting divorce" to make a change in your life. You don't have to make every change at once, but you should be thinking about ideas, and what the major changes are in your expenses that you can make today, because it'll make your future life much easier, much less of a burden when you're worrying about keeping up with next month's bills, or your bank account is low on money, or you're just withdrawing from your savings, and it's like you're continually losing money each month. If you can cut those expenses down, that'll put you in a much, much better place than you would've been before. You will be on a much more solid financial footing for the future.

0174: Understanding Expenses: Why Your Monthly "Nut" is Key to Post-Divorce Planning - Part 1 Mar 20, 2018

Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help. Learn about coaching services here. Thank you for listening! Find a transcript of this episode below. I was meeting with a client in person recently and we had a long discussion about whether or not they should keep the house or sell it as part of the divorce process. One of the things that, although in theory they could afford the house and keep it for a few years as the kids grow up and they want to keep some kind of consistency, that might not have been the right line of thinking for this person and ultimately the more we talked about it, the more we discussed how the house could become a burden. It's something that could actually cause, keeping the house, could cause more harm than good. But we're not going to talk about the house specifically today, that'll come up a lot in this episode. I want to speak more broadly about how you should you think about your expenses, and your post-divorce expenses, and understanding your post-divorce picture, even before you start the divorce process or if you're in the middle and going through it. One of the things to keep in mind is that once you get divorced, actually, almost all financial advice, you can read every book in your local library, every book on Amazon, every book in Barnes & Noble, which is one of the few book stores that still has physical shops, and if you read every personal finance book all the advice boils down to this: make more money than you spend. Very simply, your income needs to be higher than your expenses. If your expenses are higher than your income, that's bad, but if you are saving money every day, week, month, year, in the long run you'll never run out of money. If you are net spending money, you will increase in debt. It doesn't really matter what your total income is. If you make $50,000 a year, so long as you're only spending $49,000 a year or less, you'll be in pretty good shape for the rest of your life, I mean, your whole life, so long as that's your picture. If you make 50 million a year, yeah, 50 million dollars, if you spend 49 million dollars a year, you're good. But guess what? I know people who, not a ton of people like this, but I do know people who make 50 million dollars a year, and they spend 55 million dollars a year. Guess what? They have tons of debt, and they can end up going bankrupt. I've seen it before. Conversely, if you make $75,000 a year, but you're spending $82,000 a year, that is not a good situation to be in. It doesn't really matter what those final dollar numbers and dollar amounts are, you have to be savvy and you need to spend less than you earn. That's the context for this. Why do I bring this up? Well, one of the most important things you need to understand when it comes to your post-divorce life ... Look, everyone listening to this podcast will no longer have to listen to me at some point, which is a great thing to think about. I'm always happy when I lose a listener, funnily enough, because your case is over, and you get to move on with the rest of your life. But as you're thinking about your settlement, or the divorce process, one of the things you need to do, and manage most efficiently, is cutting out and thinking about and understanding the fixed expenses. Wherever you can reduce them, you should reduce those fixed expenses. One of the things that, or the way that people describe fixed expenses is oftentimes called your monthly nut. I don't know why it's called that, but that's what people call it. Basically, I won't say people call it, but I know a lot of people who call it your monthly nut. I think it's kind of a crude term, but basically just your fixed expenses, and what you need to make every month so that you're not losing money, or not spending from savings, or not racking up debt in one form or another. This is the amount of money you need to make to keep constant, to break even in a given month, where your income and your expenses are at least even. When we talk about monthly nut, we're basically just talking about the expense side of the equation, because that's the important thing. The lower your monthly nut, the lower your monthly expenses, the more wiggle room you will have after divorce. More importantly, what that means is that it'll be easier to rebuild yourself financially after the divorce process is over. Almost no one ends up in a better financial position after divorce than they did before divorce. One of the ways to mitigate the impact of divorce, or to rebuild your life more quickly, is to have a low fixed monthly expense base. The main question, of course, is what is a part of your fixed monthly expenses? Let's dig into a few items that we're talking about. If you haven't gotten it already, get my courses, go to store.divorceandyourmoney.com, or you just go to divorceandyourmoney.com/store, and I have some great courses in there. In the courses, there are some awesome checklists to help you stay organized. If you buy the courses too, I have some Excel templates I'd be happy to share with you as well, or some worksheets that I'd also be happy to share, that provide some of this information. If you go through the courses, you can follow along in depth, so you can work through your situation specifically. Let's just take an example of your monthly nut. We started by discussing the house. Now, the house is going to come back in this part of the discussion, because it's one of the biggest variables in your monthly expenses. If you can reduce your monthly expenses in any capacity, then that's great. Specifically, when it comes to the house, the house is one of those expenses that, depending upon where you live, and of course that's a big variation depending upon what part of the country you live in, and actually even what neighborhoods matter in your city that you want to or need to be in, but some people I know can reduce their monthly housing expenses for 20 or 30 or 40 or even 50% a month in terms of what they're paying for the house. When you're dealing with a divorce situation, where you're going to be on your own and single finances in a bit, that's something that you can think about. The reason that house expenses can add up is you have not only just the house itself, but you have things like a mortgage amount, electricity, property taxes, utilities, lawn care, and everything else that goes into maintaining a house. What you need to do is sit and write down all of those costs that you pay every month, every year, and even some of the ones that occur every several years, like a new boiler, repainting the house, and really figure out what are those on a monthly and an annual basis, because they add up. The real question you're going to need to be asking yourself is, will I be able to afford this when the divorce process is over? Now, the house is just one of many monthly expenses. For all of you listening who are going to be paying spousal or child support, support payments are a fixed monthly expense. Now, you need to know what range of a fixed monthly expense can work in your situation. There's other fixed expenses, from what kind of car you drive, to what types of insurance you have and how big the coverage limits are, to utilities, to internet access, to things like that. These are all fixed expenses, to some sort of basic level of food that you need each month. Now, there's also an opposite, which is called the variable expenses. These are the expenses that are ... They use a term discretionary, is one way that they describe it, but basically these are the expenses that you like, but you can live without. What goes into a variable expense? Well, something like entertainment, and eating out. I know some people who spend, particularly some of my New York friends, who spend many thousands a month on eating out. Now, it's part of being in New York City that people can spend thousands of dollars a month on eating out and that not being a weird thing, but it's something to think about, because when you don't really have a kitchen. But if you live in the middle of the country, or in a suburb, maybe you just go out once a week, but if you're going out four times a week for dinner, you might need to think about how you can cut that back a little bit. The point is, though, is you need to, if you're listening to this, you need to really understand, just conceptually, what are your monthly expenses? Are your monthly expenses, are they ... You should figure out as accurately as you can. For some of you, your monthly expenses might come out to $3,250 per month. Actually, I know what my monthly expenses are, at least on a personal level, and also for the business I have to know exactly what those monthly expenses are, especially when you have payroll and office rent and everything else. So, I have a very clear understanding of my monthly both personal and monthly business expenses, and I look every month, because it gets deducted straight from my back account, I look, and say, "Hey, do I need to keep that expense?" Now, if your number is $3,250 a month, you need to write down $3,250 a month. If your number is $17,800, then you need to write $17,800 a month as your monthly expenses. I know plenty of you listening who are in both ranges, everywhere in between. I know some people I work with who are lower than that, and some people I work with who are much higher than $17,000 a month in monthly expenses. But it doesn't really matter exactly what that number is, because everyone's life is different. You have different lifestyles and lives. What the important part is, is regardless of who you are, how much money you have or don't think you have, it's you need to know what that monthly expense number is. Here's why it's important, is if you know what your monthly expenses are, you will have a very clear sense of exactly what you need in order to make it through the divorce process, and how to negotiate a settlement that is workable for you. Now, the next thing I want to discuss, and I'm going to discuss this in the next episode, but I really want to dig into, dig deeply into understanding the examples of how your fixed expenses can have a big impact on your settlement, and what that means in terms of what your job looks like going forward, if you need to get a job, or if you're paying support, how that looks for you, and I want to go through some examples in the next episode of ways that you can start reducing your monthly expenses.

0173: 4 Things You Should NOT Do During the Divorce Process Feb 20, 2018

This episode contains some lessons that many people learn as they go through a divorce. Here are four things to avoid as you go through the divorce process:

Don’t do anything shady.
Don’t believe your ex-spouse about what is going on in your divorce.
Don’t be oblivious about what is going on in your marriage and family.
Consult an attorney for either your whole case or on a limited basis.

Some people try to get away with suspicious activity when going through a divorce. One of the most common examples is moving sums of money around or trying to hide assets. They may try to adjust their income in an effort to pay less support later. Avoid doing these things. It will probably come back to haunt you. If you have not been in the loop with regards to the marital finances, you may still have a sense that there is something odd going on with your spouse. If you were the primary earner in the marriage, you may think you are being clever by hiding money, but your spouse is probably not oblivious to what you are doing. When you have been married to someone for a long time, they will probably know if something is out of the ordinary. Suspicious actions can come back to hurt you later. Don’t do anything out of the ordinary, because it can hurt you later. Some people are coming from a relationship where there was an imbalance of power. Maybe your spouse was in charge of more things in the household and was more dominant in the relationship. They may be making threats about custody or keeping assets from you. Any time you hear threats from your soon-to-be-ex-spouse, you should ignore them, aside from communicating them to your attorney. Spouses can say a lot of things to try to scare you. Just understand that there are laws to ensure a decent outcome for both parties. Your spouse’s threats are likely to be empty. As soon as you know that divorce may be in the near future, you need to take control of your life. Get your credit report. Make sure you know about all of your credit cards, retirement accounts, and any other debts or assets. Gather up important documents like your estate plan and your will. Be aware of your expenses and what it costs to maintain your lifestyle. You need to take control of every area of your life. Your attorney will not figure everything out for you. You cannot ignore this and hope it will go away. Some people try to pursue a divorce themselves, without an attorney. This usually happens when the divorce is mostly amicable and they can reach an agreement on most of the issues in the divorce. However, it is important to ensure that whatever settlement you reach will make sense for the both of you. If you end up doing something that’s far outside the bounds of the law for your state, you may not be making the best deal. You also could be missing a large element of your divorce. There are regulations for some aspects of divorce, like custody agreements, that you need to be familiar with. It’s a good idea to consult an attorney to make sure your settlement is within bounds. Even if you are an attorney in another area of the law, you are probably not equipped to handle family law. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0172: Matt Sweetwood, Author of NEW book "Leader of the Pack" Feb 15, 2018

Today we bring back guest Matt Sweetwood, to announce the release of his new book: Leader of the Pack: How a single dad of five led his kids, his business and himself from disaster to success. "I was unprepared, overwhelmed, broke, and often depressed and I was sure I would not live through the experience. With five kids under eight years old to care for, a large business to run, a court system bent on bankrupting me, all I saw was a 20-year jail term ahead of me, ending with me old, broke, and broken…Finally, though, one day, it was over…” Get it on Amazon now! Available for Download: Feb 15, 2018 Soft Cover Available: Mar 8, 2018 Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0171: Bitcoin, Digitial and Virtual Assets in Divorce Feb 06, 2018

What happens if you are going through a divorce and have digital assets? Digital assets can come in many forms. Bitcoin and cryptocurrencies are popular topics in the news lately, but there are other forms of digital assets like your music library, ebooks, rewards points, or even a website you own. When it comes to digital assets, state laws have not yet caught up. Many of these assets are relatively new, and the laws cannot always address all the complexities of splitting them. In addition, there are often unique elements about digital assets that make it difficult to know their value and how to split them. This episode will give you some steps to take if you have any kind of digital assets.

Figure out if you have any digital assets.
Determine what is marital versus separate property.
Figure out what you can realistically do with those digital assets.

Digital assets can be hard to find. In some cases, it may even be hard to realize that you have them. Some of you may have an online business, like this podcast. You may have a blog, an ebook, or Bitcoin. Digital assets are just data. Since they are intangible, it can be challenging to identify them. Think about what assets you may have. Most of you probably have some kind of rewards points, such as a hotel brand or airline rewards. These can often be translated to a dollar value. Most of you have been married for a length of time, from several years to decades. In that case, the digital assets you have are likely marital property, especially if the assets are so new that your marriage predates them. The nature of the digital asset and its value will be relevant. For example, you can determine a dollar value for your airline miles. The other spouse may end up getting a credit for those miles in the divorce negotiations. You may also opt to transfer the miles. Some digital assets can be split relatively easily, such as Bitcoin, but you and your spouse could decide that one of you will keep the asset while the other receives the cash value of their portion. Digital assets can be easy to hide, because they are intangible and there is often an element of anonymity. It is important to be aware of what digital assets you and your spouse have and address them in your divorce negotiations. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0170: Why You Should Divorce In 2018 - and Don't Delay until 2019 Jan 17, 2018

This episode will explain why most of you will want to finalize your divorce in 2018, if possible. After 2018, divorce will be even more complicated than it already is. You probably already want an efficient divorce process, but the recent changes to tax law will provide some additional incentive to move things along. The change in tax law primarily concerns spousal support. Taxes are not a fun topic, but they are critically important to understand so you can make the best decisions for your situation. How you structure your divorce settlement can ultimately get you 20% to 50% more money and assets. For more about taxes and divorce, visit our archive. To understand what is changing this year, we first need to understand how spousal support has worked for the past 75 years. Currently, if you receive alimony, you claim it as income and pay taxes on it. The person who pays alimony receives a tax deduction for the amount of the alimony. For divorces that are finalized after December 31, 2018, the person who receives alimony will not count it as income. The person who pays the alimony will not receive a tax deduction. Why is this such a big deal? If you are the person paying spousal support, you get no tax benefit for paying the support, so you have an incentive to pay less. People who will receive support will probably be getting less. These changes came from the tax bill that was passed at the end of 2017. If you can wrap up your divorce in 2018, you will not have to worry about it. However, if your divorce is not finalized until 2019, you will be affected by this change. If you are paying support, finalizing in 2018 will give you tax benefits. If you are receiving spousal support, you are highly likely to get more support if you finalize this year. Who receives spousal support today? In a recent census, it was found that about 97% of people receiving spousal support are women. Most of them were stay-at-home parents during the marriage, or they worked fewer hours than their husbands. Although there are many female breadwinners, women are going to be affected greatly by this law. What are your options if you find yourself in this situation? You can often come up with clever, creative solutions that will work for everyone. Here is a simple example. If you know that you will probably receive less spousal support for the foreseeable future, you can structure your settlement so that you get more money up front as a lump sum. This can help make up for the tax benefits that you will not be receiving. Look for ways to structure your settlement that will benefit you in the long term. Many people wonder why this law is changing. There is a good reason for it. In 2017, about 350,000 people claimed they were paying spousal support, and received a tax break. However, only about 180,000 people said they were receiving spousal support (and paid taxes on that spousal support). This means there are 170,000 people who received spousal support who did not report it to the IRS. That adds up to billions of dollars of lost tax revenue. In future episodes, we will discuss more details about taxes and how to structure your settlement. There is no need to panic, but it’s important to understand how this change will affect you in the broader context of your divorce negotiations. If you understand that you will be losing money because of the change in tax law, you can look for ways to make up for it.

Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0169: How to Deal with Divorce in 2018 (and an update on the BIG CHANGE to Alimony) Jan 03, 2018

With the start of 2018, there is a lot you should be doing to prepare for divorce. This is a great introductory episode for you to listen to! Learn more about all of the great Divorce and Your Money resources at divorceandyourmoney.com.

0168: Post-Divorce Checklist, Part 2 Dec 21, 2017

In the previous episode, we discussed the initial things you should do when you get your divorce settlement. You will need to study your settlement in-depth and create a calendar of all the dates and deadlines that will be coming. It will be important to stay on top of everything, even as your divorce is wrapping up, because there are a lot of small things to handle. It’s not quite time to rest yet. Listen to the previous episode for more details. This episode will be about setting up your new life. You may not realize all of the things that you will need to take care of. Many of these things are tedious and boring. However, they’re very important.

Check your credit report.
Set up new financial accounts.
Update your will and estate planning documents.
Check your beneficiary on all your accounts.
Speak to a financial advisor.
Speak to an accountant.

When you have finally gotten divorced, you will need to make changes to a lot of financial accounts. Regardless of your level of income, you should check your credit report. Look for any joint account that is still active, and close it or freeze it. Usually to close an account, you must have a zero balance. If you do not have a zero balance, you can freeze it to ensure there’s no additional spending on that card. You will still be liable for any account that is left open that has your name on it. You could face a difficult situation down the road if you don’t handle it now. Change all of your accounts so that your spouse will not have any information about your account, such as the account number. If you have any joint bank accounts that are still open, split them up and close them. Don’t make it possible for your ex-spouse to take more than their fair share, even if you doubt that they would do such a thing. Also, change all of your passwords and security questions. It’s best to protect yourself. Estate planning documents will outline what will happen to you when you pass away or are incapacitated. If you already have these documents, it is likely that your ex-spouse is listed on them. Update your will and other documents with an estate planning attorney. You will have to think about who will take care of your children, how your assets will be divided, and what will happen to you if you are incapacitated. Your bank account, investment accounts, pension plans and insurance policies all have a beneficiary who will receive the funds if something happens to you. When you are married, your spouse is often the beneficiary by default. Update these appropriately. It can be difficult to make a budget after a divorce that takes your goals into account. You will likely need to plan for your next house, your next car, or your retirement. If you don’t have a good financial plan, it is time to build one. Find a financial planner. Many will help you for free. We’ve talked about post-divorce financial planning in a prior series of episodes. A financial planner will help you achieve your goals. Many of you are financially savvy. Even so, it’s advisable to consult an accountant the year after you get divorced. They will help you get all the right deductions and minimize your year-end tax bill. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0167: Post-Divorce Checklist, Part 1 Dec 13, 2017

Right now, a lot of divorce cases are rushing to a close. Most people want to finalize their divorce before December 31. The year that you are officially divorced is the first year you file taxes on your own. However, just because your divorce is wrapping up, it does not mean that the process is over. In this episode and the next, we will cover what to do after your divorce is over. Your post-divorce tasks fall into two categories. You need to ensure you receive everything you agreed to (and that you give up everything that you agreed to). You also need to update all of the documents in your life to reflect your new situation. This episode will be about the first category. Once you have the settlement in hand, you need to sit and study it, line-by-line. You want to find time when you will not have distractions. Take notes as well. Set up your notes with a column for what you need to do, what your spouse needs to do, and optionally, anything that your attorneys need to handle. As you go through the settlement, make notes of whatever you need to do. Do you need to transfer money from your bank account, or make sure that your spouse does? Do you need to set up a parenting schedule? Go through each line to make a list of everything that you need to do. There will be a lot of little things that need to happen. Once you are very familiar with your settlement, and you have that list, you will need to create a calendar. This is a complicated step. Your calendar will have a lot of different dates on it. In some cases, you may have to start the process far ahead of the deadline. For example, if you are transferring a 401k, that process can take a few months. Other dates will be routine and repeating. If you have a custody schedule, you will have to map out every date that the kids are supposed to be in one place or another, for years. Your life will revolve around those dates, so they are important to have in your calendar, even if the dates are far in the future. Some asset transfers are slow, especially with large, illiquid assets. The most common one is a house. It will take time to sell a house, often 6 months to a year, before you will see the proceeds. In some situations, you may be transferring ownership of the house, but this can present complications. There was one case where a condo was being transferred. It took 8 months and nearly $500,000 in legal fees because of the complexity of the transfer. It was important to keep the deadline in mind, even though there was a complicated process going on. Likewise, if you are selling a house, you will need to start preparing the house for sale early, so that you have ample time to sell the house and receive the highest price possible. Otherwise you may be forced to do something that is financially unwise. For the calendar dates that will take time, you can create milestones for each issue. For example, if you are splitting up a 401k, you will need a QDRO – which can take months to obtain. The first milestone would likely be finding a QDRO attorney. Your second milestone could be to submit documentation to that attorney. The third would be obtaining pre-approval, and so on. Creating milestones for large tasks will help you stay on track to meet your deadlines. Many of the tasks on your list will need to be broken down into milestones, so your calendar will be complex. If you aren’t a very organized person, you may want help breaking your task list into manageable parts. Ask a friend or hire a personal assistant to help you set up your system. If you choose to hire a professional organizer, you may work with them for a few days in the beginning, and then just once per month to keep you on track. In the next episode, we will discuss what you need to do to set up your new life – setting up financial accounts, checking your credit report, and updating important documents. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0166: 5 Types of Attorneys to Avoid (If You Can!) Dec 06, 2017

In this episode, we’ll discuss different types of divorce attorneys. Divorce financial analysts often work with a wide range of attorneys. They all have different styles. Many attorneys are excellent. In some cases, you may encounter an attorney that is not so good. The goal of the divorce attorney or family law attorney is to have the best possible outcome in your divorce. What that outcome looks like will depend on your situation, but you want an attorney who will put you in the best position possible, whether it’s in terms of assets, support or child custody. A bad attorney will hurt your chances of getting anywhere near what you deserve. The attorney will be the most important person on your divorce team, other than you. They have the biggest effect on how smoothly your divorce goes. There are no hard-and-fast rules, but here are five types of attorneys you may want to avoid.

The most expensive attorney.
The “therapist” attorney (also known as the “best friend” attorney).
The pit bull attorney.
The too-cool-for-you attorney.
The inexperienced attorney.

This is the attorney that likes to have a lot of billable hours, which can add up over time. These attorneys have the nicest offices, cars and clothes. Their staff is often picture-perfect, and they have an air of exclusivity. These attorneys aren’t bad attorneys. They are just expensive. This attorney spends a lot of time discussing how you feel, and not enough time working on your case. An actual therapist is a great person to discuss your feelings with, but your attorney should be there to guide you through the legal process of your divorce. You could be paying $400 an hour or more for your attorney’s time, rather than a therapist for $120 an hour (with better results). This attorney is extremely aggressive. They want you to fight on ever issue in the divorce, under the cover of being “tough.” That approach can be counter-productive. In episode 152, we discussed why you don’t want the most aggressive divorce attorney. In short, the aggressive attorney ultimately causes more harm than good. Aggressive does not equal effective. This attorney probably seems like a good choice on the initial meeting. Then, after you pay your retainer, they disappear. They don’t return your emails or phone calls. It seems like your case is just not that important to them. This is surprisingly common, and it can be very frustrating. Your attorney should have experience practicing family law. If an attorney has experience in another area, that does not mean their skills will translate well. Family law has its own set of rules, regulations and guidelines. You should ask how much of their practice is dedicated to family law, how long they have been practicing family law, and how many cases they deal with per year. You should ask similar questions if you interview a divorce financial analyst. If you find that you have a sub-optimal attorney, it does not necessarily mean it will be the end of the world. You can still get a good resolution to your case. Just be aware that if you have a bad relationship with your attorney now, the relationship will probably not magically get better. You will find yourself complaining about these same things months (or even years) down the line. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0165: What is a divorce hearing, and how is it different from a trial? Nov 08, 2017

When you go to court, you may be going for a hearing or for a trial, and there are differences between the two. This episode will explain what happens in each situation. Going to court is almost never like what you see on television. In particular, the process of going to court is not as glamorous as it seems on television. When you go to court for a hearing, a judge will look at evidence and make a decision about a specific issue in the divorce. That evidence could be written documents, records, testimony, financial affidavits, and so on. The judge will make a decision on the issue in question after hearing the evidence. A hearing usually occurs while a case is still going on. It is not intended to resolve every issue in a case. A hearing can be for temporary issues, like temporary custody or spousal support. They may be used for a specific issue in discovery. What happens at a hearing? You go to a court and go before a judge. Judges can vary greatly in age, race and background. Sometimes they are multidisciplinary, so they may hear other types of cases like criminal cases or business disputes. When you get to the court, you will wait outside the courtroom until you are called. Often, your attorneys will do the talking, although you may be asked questions or called to testify. Trials are very different. Trials are more involved, and therefore, much more expensive. In a trial, a judge will make the final decision on many issues in the divorce, so the stakes are high. Not all trials are complicated, but many are. In some cases, people spend hundreds of thousands of dollars on their trial even if they don’t really have that much money to spend. In a trial, you will present your evidence. The trial may last a day or a week, depending on your circumstances and local court rules. The court looks at the various issues in the divorce and resolves them. You may even have a trial with a jury, depending on your state, although it’s rare. When you go to court, whether it be for a hearing or a trial, be aware that it will be expensive. The more work you can do up front, the better off you will be. If you are going to court, be prepared and understand what is at stake. Make sure to leave a good impression and put yourself in the best position possible. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0164: Why You May Need a Vocational Expert in Your Case Nov 01, 2017

This episode is about vocational experts in divorce cases. Vocational experts are only used occasionally, but they should probably be used more often. What is a vocational expert? Often during a marriage, one spouse was not employed. They may have lost their job or they may have decided to be a stay-at-home spouse. It does not necessarily mean that they were unable to work, however. A vocational expert will help answer the question, “How do you know how much income a spouse can earn if they have not been working?” As an example, a female client has a husband who holds a PhD and was in the military, but who chooses not to work. The client herself is a doctor. The husband is trying to get spousal support so that he can continue to be unemployed and be supported by his ex-wife. However, this gentleman could easily get a job because he is highly qualified. In another case, the wife worked for a while early in the marriage, making $75,000 a year. However, when the couple had children, she stopped working so that she could dedicate the next twenty years of her life to being a stay-at-home mother. In this scenario, the wife is still capable of working, but has been out of the work force for such a long time that it will be difficult to immediately find a position like the one that she left when she had children. However, she does have some skills and a college degree. In this scenario, the husband should consider getting a vocational expert to help determine how much income the wife might be capable of earning. It’s important to factor in a spouse’s earning potential into things like spousal support and division of assets. Just because a spouse has not been working does not mean they cannot. If a person getting divorced is 50 years old, they could still feasibly have 15-17 years of working life ahead of them. They may need to start at a lower income level and work their way up, but whatever income they are earning should decrease the spousal support they receive. This is why a spouse’s earning potential is a controversial issue. A vocational expert can evaluate a person’s abilities, education, and experience to determine their potential for employment. They will determine whether that person can find a job, and how much it might pay. If the person has not worked in a long time, they may start at an entry-level position. However, it can also be the case that the spouse is capable of earning a good salary, as in the example with the husband who holds a PhD. You can present the vocational expert’s findings as evidence in court, whichever side of this debate you are on. If you are the spouse who has been working, a vocational expert can help you make the case that your spouse is capable of earning money, which can reduce your spousal support and/or child support. Conversely, if you are the spouse who has not been working, a vocational expert can help you establish that your career prospects are slim and that you need the spousal support. You can also use a vocational expert, outside of the context of the divorce, to help you assess your career options and make a plan for yourself. Vocational experts are very persuasive in court because they are independent. Their goal is to present the facts of the person’s experience, education and skills and assess what kind of jobs and salaries they may be able to get. They are an important resource to consider for your divorce. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0163: Electronic Evidence in Divorce: Everything You're Doing is Tracked Oct 25, 2017

Electronic evidence may come into play in your divorce case. Electronic evidence can be from your computer, phone, text messages, apps, cameras, bank accounts, and so on. Everything you do these days has a record. You may need to look for evidence of your spouse doing something they shouldn’t, like getting a hotel room. It’s increasingly common for people to leave an electronic trail that can come back to hurt them later. Most people forget that everything they do is tracked, one way or another. As you go through the divorce process, keep these tips in mind. 1) Be aware that everything you do is recorded or could be recorded. 2) Do not try to hide assets. 3) Be aware that what you say or do can be taken out of context. For example, if you make a threat during an argument or send a nasty text message, it can come back to haunt you. If you are about to say or do something that you might regret, take a step back and calm yourself down. All of your conversations on social media have a record of them, so they can be subpoenaed. Likewise, monetary transactions through your bank or credit cards will be traceable. Be aware if there’s something your spouse may have done, you may be able to access those records. There are records of all assets, so it’s a bad idea to try to hide money. If someone really wants to track down money that went missing, they could. It can come back to hurt you during the divorce process, or even several years later. As an example, let’s say that you are playing with your kids, and you playfully say, “I’m going to beat you up!” Your spouse might write that down and later tell a judge, “On Tuesday, June 2, he threatened the kids and said he was going to beat them up.” On paper, that transcript looks terrible for you. Quotes can be taken out of context in divorce to be used against you. Technology is evolving so quickly that people often don’t comprehend all the repercussions it can have. Technology that is convenient on a day-to-day basis can ultimately hurt you during the divorce process. Minimize your interactions with your spouse. Be careful with what you say (verbally and electronically) as you are going through a divorce. Remember that what you say and do can end up hurting you later. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0162: 7 Tips When You Are Going to Court Oct 18, 2017

In this episode, we’ll discuss tips for when you’re going to court for divorce, whether it’s for a hearing or for a trial. If you will be going in front of a judge for your divorce, you should be prepared. Try to avoid making some of the most common mistakes with these tips: 1) Real court is not like television. 2) Dress appropriately 3) Show up early, but expect to wait. 4) There are time limits. 5) Not everything you may want to cover is legally relevant. 6) Answer questions truthfully. 7) Don’t do something dumb in the heat of the moment. Court is not glamorous or exciting. Don’t expect it to be like television shows. It is important to dress appropriately so that you make a good impression. Dress business professional, like you would for a job interview at a large corporation. It can take time to find parking and get through security, so allow ample time. Arrive at least half an hour in advance. Even if you are on time, you may have to wait to be seen. Every court has rules as to how it proceeds. For example, in Dallas, one court gives each side twenty or thirty minutes to present their case, and that’s all. You should ask your attorney or the courthouse in advance how long you will actually have. You need to be efficient. You need to know what is important when it comes to your case. Details of what happened during your marriage will not necessarily be relevant. For example, in some cases, infidelity will have no impact on spousal support, so there is no reason to discuss infidelity while you are discussing spousal support. If you are asked a question by anyone in the courtroom, answer truthfully. Don’t lie, because often whatever you say will be part of a permanent record, so it can cause problems for you later. When you are in court, there are a lot of emotions tied in. You may have adrenaline going, or get set off by something your ex says. You may find yourself flustered or have an urge to do something that will ultimately be unhelpful to you. Don’t say or do anything you might regret. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0161: 5 Your Attorney MUST Be Doing - Or You Could Have Trouble in Your Case Oct 11, 2017

In this episode, we’ll cover five things your attorney must be doing for you. If they are not doing these things, your case may be in trouble. We offer a course on managing your relationship with your attorney, because it is one of the most important aspects in your divorce. You should be concerned if your attorney is not doing any of these things:

Your attorney does not return your phone calls, emails or messages quickly.
Your attorney does not keep you informed on your case.
Your attorney misses deadlines or waits until the last minute to file reports.
Your attorney does not bill you regularly.
Your attorney does not close the case when the divorce is over.

This is inexcusable. If you contact your divorce attorney and they do not reply within a day or two, it is a bad sign. You should be able to expect them to at least reply quickly that they have received your message, even if they are having a busy day in court or are on vacation. They may not be able to give you a detailed response immediately if it is something that they need to look into, but they should communicate that with you. If they do not, you may need to make a change. This is closely connected to the point above. Your attorney should check in with you to let you know what has been going on with your case. There may be times when nothing is happening with your case, such as when you are waiting on a court date for a minor issue. However, if there are things going on, your attorney should keep you apprised of what is happening. Keep in mind that you also need to be proactive. Check in with your attorney to see if anything has happened lately. This problem does not come up often, but when it does, it is a major issue. It can be hard to tell if this happens because the attorney is just bad with deadlines or if your case simply isn’t a priority for them. In a recent case we dealt with, the attorney repeatedly waited until 24 hours before a major deadline to submit key information to their client. The client then had to scramble to complete their part in time. It can put you in a bad position where you may have to miss deadlines to ensure you submit accurate information. You should be getting a bill every month, rather than a large bill after several months. This will let you know how much of your retainer has been spent, how much time has been spent on your case, and what progress has been made. The bills should be clear about what was done and how much time was spent doing each task. It is very tempting to put the case aside when it has been settled. However, there are still several steps to complete the divorce: taking names off accounts, transferring assets, signing documents, and so on. You want the end of the divorce to go as smoothly as possible, and to be sure that all the small details are wrapped up. If your attorney forgets to tie up all of the loose ends, it can cause problems for you down the line. If you find yourself in one of these situations, what do you do? First, make sure that you are staying on top of things yourself as much as possible. For example, check in with your attorney to see what has been going on with your case. However, if there are serious issues that keep coming up, it may be a sign that you need to look for a new attorney. These issues will probably not get better over time, and if the problems are severe, it can impact the rest of your life. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0160: How to Stay Involved in Your Divorce Process by Doing Your Homework Oct 04, 2017

In this episode, we will discuss your involvement in the divorce process. You can have any number of experts helping you – lawyers, accountants, certified divorce financial analysts, valuation experts, social security experts, and so on. However, at the end of the day, it is your life and your divorce, so it’s up to you to stay on top of this process. Here are some of the major areas for you to be working on:

Complete your statement of net worth or financial affidavit.
Make a budget.
Document everything.
Complete your interrogatories and depositions quickly and truthfully.
If you are using experts, help provide context.
Participate in your settlement negotiation.

This is one of the first steps you will need to take in your divorce process. You will need to get your financial information together for your attorney and other experts. If you make a mistake on your financial affidavit, it’s your fault. Get help with this if you need it, because the court will use your financial affidavit to determine things like spousal support, child support, and the division of assets. You can find more resources for your financial affidavit in our store. Make sure you put together a post-divorce budget. How much will you have to spend on housing when your divorce is over? What will your living expenses be? What will your car payment be? How much do you normally spend on groceries and eating out? What expenses do your kids have? Your life is going to change as a result of the divorce. You will probably have less income but more expenses after a divorce, so you need to plan for these things now. It will help you keep these things in mind during your settlement so you can negotiate for what you need. In divorce, there will often be he-said-she-said disputes, but if you have documentation of what happened, you can submit that information to the court so there will be no question. The method of documentation will vary depending on what it is. For transactions, your bank record or credit card statement is good documentation. For property, you may want to take a picture. Document communication that you have with your spouse, especially if there’s anything negative, like a threatening text. Documentation will allow you to present your case in a much more compelling manner. Often, you will have to complete interrogatories or give depositions during the divorce process. Just make sure you do so in a timely fashion. Even if your spouse is withholding information or lying, it doesn’t mean you should. Take the high ground and provide truthful, complete information. You don’t want it to look like you’re hiding things or being intentionally misleading. Experts will need context to be able to help you. For example, if you go to a forensic accountant and ask them to search for assets, that isn’t very helpful. If you can provide more context, like a business that you own that had some suspicious transactions, tell them. Give them information to work with so they are better able to help you. Clarify your priorities with your attorney. Make sure you are fighting for what you want, and that you aren’t losing out on the things you need. Clarifying your priorities will also help you avoid spending a lot of money on legal fees on things that aren’t important. It’s up to you to make your wishes known and be involved in all parts of the divorce process. The more involved you are in the divorce process, the better. It will help reduce your legal fees and expert fees if you invest your own time. Eventually the divorce process will end, so you want to set yourself up to be in the best position possible. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0159: 4 Factors That Determine the Cost of Your Divorce Sep 27, 2017

“How much is my divorce going to cost?” This is one of the biggest questions people wonder about when going through a divorce. In this episode, we’ll talk about four factors that will affect the cost, some of which are out of your control.

What you do during the process
What your ex-spouse does during the process
What your ex-spouse’s attorney does
What the court does

You have control over your responses and decisions in the divorce process. If you are asked to complete a financial affidavit or if you are questioned in an interrogatory, you are responsible for answering truthfully. If you’re thinking about a settlement, you have to decide what issues are worth fighting for and what issues are worth letting go. This will have a significant impact on the cost of your divorce. Sometimes the smaller issues are worth letting go when you consider the big picture. This is something that you cannot control, but it will certainly affect the cost of your divorce. You may find that your ex-spouse is not truthful or forthcoming during the divorce process. They may omit certain facts, or they may outright lie about what happened in the marriage or their finances. You will have to follow up on those issues, and may even need to hire additional experts like forensic accountants or private investigators. If this is the case, your divorce process will be longer and more expensive. Earlier episodes of the podcast have discussed choosing an attorney, and why you should avoid an aggressive attorney. However, what if your spouse chooses to go that route? Aggressive attorneys lead to more unnecessary conflict, which adds to the expense of the divorce. If both your spouse and their attorney are disagreeable, you will have to spend time and money to deal with the additional conflict they create, even if you are ultimately in the right. Courts are tricky. Every court has different rules and procedures. For example, in Dallas, there are three counties within twenty miles. Each county’s courts have different procedures. If the court needs a status update on your case, one county might just ask for an email, while another requires your attorney to come to the court in person to provide a written and verbal update. Your attorney still has to draft the letter, but now they also need to take the time to go to the court and speak with the judge. This will impact your legal fees as you are paying for your attorney’s time. You will only have control over yourself. Unfortunately, you don’t have control over your ex-spouse, their attorney or the courts. However, you can make the best decisions possible for you given the circumstances. Focus on yourself, and making the best decisions possible with the information you have. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0158: Owning a Business with Your Spouse Sep 20, 2017

This episode will cover the options you have if you own a business with your soon-to-be ex-spouse. Under normal circumstances, businesses are very complicated. When you are getting divorced, it is even harder. Because this is such a complicated topic, this episode will not be able to go in-depth, but we will cover the options that you have for dealing with your business in a divorce:

One spouse buys out the other.
Both spouses continue to work in the business together.
Walk away from the business entirely.

This is one of the most common options in the divorce world. One person retains ownership in the business, and the other no longer has any ownership, but they receive money for the value of their share. For example, let’s say you and your spouse co-own a gym, and your spouse wants to buy you out. How will that work? In a perfect world, you know the value of the gym, and you know the value of your shares. If the gym is worth $100,000, and you own half, your spouse will write you a check for $50,000. What happens if your spouse isn’t able to pay you $50,000 right now? It will become more complicated. They may offer to pay you $10,000 a year for the next five years. In that case, you may want to factor interest into the equation. You could also consider taking a portion of the profits each year. You may also be able to pull that $50,000 from another asset, like a retirement plan. There are options for how you structure a buyout. However, with most buyouts, it is difficult to determine exactly what the business is worth. There are experts who value businesses, but it is a somewhat subjective process. This is not a very practical option. It can be difficult to continue to work with your ex-spouse. You may have to be around their new boyfriend or girlfriend. When work-related problems arise, the history that you have with them can amplify the conflict. This option is very difficult to execute, although people do sometimes attempt it. You could sell the business or simply close up shop. There are a number of reasons to consider this option. If it is unfeasible to continue running the business, you may want to walk away. Owning a business can be a burden, and sometimes it is simpler to sell the business or close it. What you decide will depend on what is best for you. Businesses are very complex. There are also legal considerations – is it an LLC, a C-Corp, an S-Corp? Who are the shareholders? What does your operating agreement say? What if investors or employees own part of the company? These are complicating factors that you will have to consider. You will need to understand the various considerations: taxes, employees, investors, etc. Make sure you handle all of these issues as cleanly as possible. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0157: Dirty Tricks Your Spouse Can Use to Delay Your Divorce Sep 14, 2017

In an ideal world, it would take a minimal amount of time to go through a divorce. Unfortunately, in the real world, divorce is a slow process. Courts are packed, attorneys are slow, and the process often takes a year or two. However, it is possible to drag it out even longer, particularly if your spouse uses delay tactics. It can make your divorce more expensive and puts you in a much worse financial position. If your spouse is out to punish you, they can do so by dragging out the divorce. This episode is about some tricks that your spouse may use to delay your divorce. Also listen to episode 147, where we discussed ways to combat some of these tricks. Be prepared if your spouse uses any of these tactics against you:

Your spouse fails to respond to discovery.
Your spouse changes lawyers.
Your spouse does not communicate at all.
Your spouse brings needless motions.

Discovery is one of the most important parts of the divorce process. It is important to understand what each spouse’s financial picture looks like. In a perfect world, both parties would be forthcoming, share their financial information, and be truthful. Unfortunately, your spouse might refuse to share information, delaying the process. They might not complete essential information. They may even lie. If several months have gone by and you still do not know what your spouse’s finances look like, it becomes a real problem. If this happens to you, you can force your spouse to react with a motion to compel. Your spouse has the right to be represented by an attorney of their choosing. However, they may fire their attorney right before important court dates, delaying the hearing. It may take a month or more to get a new hearing. On top of that, the new attorney’s fees may come out of marital funds, so it may cost you money. When your spouse is non-responsive, it slows down the whole process. They may even leave the state or the country. This can be dealt with through the courts. This comes up with aggressive attorneys. It can be very frustrating to be on the receiving end of these motions. It drives up the cost of the divorce and adds unnecessary conflict. They may request continual extensions to drag the process out as long as they can. Tactics like these can make divorce slower and nastier than it needs to be. By keeping a clear head, regardless of what your spouse is doing, you can make the decisions that will be best for you. Eventually this process will be over, so all you can do is control your reactions to end up in the best place possible. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

Do Prenuptial Agreements Work? Sep 12, 2017

Why You Need a Prenuptial Agreement

You have met the person of your dreams, and you know that they are the one for you. However, now that you are getting married, all of your friends have told you that you might want to look into a prenuptial agreement before saying “I do.” The problem is that you are just not sure if you need one. After all, prenuptial agreements are only for the rich and famous, correct?

The truth is that prenuptial agreements are designed for everyone; not just those with money. In this article, you will learn exactly what a prenuptial agreement is, how they are used, and how they can be beneficial to you.

What is a Prenup?

Prenuptial agreements (also known as prenups or premarital agreements) are legal agreements that are designed to be prepared before you get married. A prenup basically outlines what property each person in the relationship financially gains, should the marriage end in a divorce.

Many people feel that if they do a prenup, they are telling the world that the marriage is not going to work. However, that could not be further from the truth.

Think of it this way: When you get insurance on your car, are you saying that you are inevitably going to get into an accident? No. You get the insurance to protect you in case an accident does happen.

Use this same rationale about getting a prenup. If the marriage ends, then the prenup will outline what you will walk away with. Or if you have assets going into the marriage, it will outline what is protected, and what your spouse will get. It is protection for you both.

What Can Be Included in a Prenup?

Each person will generally come into the marriage with their own belongings (separate property). Then there are those belongings that you accumulate while you are married (community property). Legally differentiating these kinds of property can make it easier on both of you, should the marriage not work out. In most cases, it saves arguments over many assets.

In addition, if you had a lot of assets coming into the marriage, a prenup is a great way to protect those assets. After all, you worked hard for those assets before your future spouse came along.

A prenup is also a great way to protect yourself if your partner has less-than-ideal credit, and a lot of debt coming into the marriage. Your prenup can state that your spouse assumes all responsibility and liability for any debts coming into the marriage. This way, creditors cannot come after you or seize your separate property. Again, it is like an insurance policy.

When it comes to your property, you do not want the state assuming control over determining who gets what, especially if you have separate assets. Therefore, use your prenup to put the power in your hands by stating ahead of time what each person will walk away from the marriage with.

Prenups are also a great way to list the expectations of each other during the marriage. So you can list whether one spouse will pay for the education of another, how much of a spending limit or allowance each person will get, and how access to bank accounts will be handled. If you have businesses coming into the marriage, then a prenup can be used to outline the separation and liability of those businesses.

What Cannot Be Included in a Prenup?

Now that you know some of the things that a prenup can do, let us talk about some of the things that cannot be included in this type of agreement.

Prenuptial agreements cannot dictate child-support amounts. Remember, child support is there to protect and provide for the child. The court is going to work in that child’s best interests, so they will determine what amount of child support, if any, will be received.

When it comes to alimony, most states will not allow a person to waive their right to alimony. Therefore, you will want to check your state’s guidelines, but generally, this waiver cannot be included in a prenup. In addition, prenups are a legal document, so they cannot contain anything that can be construed as illegal. In most cases, doing so would void out the prenup. Also, prenups cannot encourage someone to get a divorce.

In addition, prenups cannot be used to list things for your own personal gain, such as dictating if and when a child will be brought into the marriage, and who is responsible for taking care of that child. For instance, a prenup cannot be used to turn your spouse into your own personal housekeeper.

Remember, a prenup is designed to protect your assets; it is not meant to be used for personal gain.

Do Prenups Actually Work?

The answer is a resounding yes! The key to making any prenup effective is to make sure that you are clear and detailed when writing it. If the prenup is not clearly written and difficult to understand, then it can leave lots of room for interpretation, which is not something you want.

It should clearly outline what each person’s responsibilities and liabilities are regarding financial and property assets (before and during the marriage). Sure, things will change in the relationship over time, and there may be assets that were unpredicted when the prenup was written.

The key is to protect what you are coming into the marriage with, as well as outline the basic responsibilities of money and property in the marriage. Everything else can be handled by your divorce attorney, should that time come.

Can you afford to let the court decide if your spouse gets the house that you paid for before the marriage? What about half of the nest egg that you built up before the marriage, should it all end in a divorce?

Protect yourself, and get a prenup.

Is Child Support Taxable? Sep 12, 2017

Filing your taxes at the end of the year is an arduous process, even under the best of circumstances. Most taxpayers are filled with trepidation at the very idea of filling out the proper forms, tallying up their total income, then having it reviewed by the Internal Revenue Service. However, the process is made even more complicated by unique circumstances (for instance, if you choose to include your child support as income. Since this form of income plays a large role in your finances, how do you plan to file?

If you are not sure whether your child support is taxable, it is time to begin sorting through the finer details required by the government during tax season. We will take a closer look at three important points that will leave you feeling more confident next tax season.

Child support is based on your income level.

When determining the appropriate level of child support, judges will often base the number on the income of the parents. While specific formulas and calculations vary from state to state, this general rule of thumb will predict the amount of child support you could receive. The income of both parents will typically be taken into account.

Because child support is usually based on your current income levels, it makes sense that many individuals and families believe that it is considered taxable income, but that is actually not the case.

Child support is not considered taxable income.

Child support is not actually factored into your gross income, and should not be added to the rest of the funds you earned that year while filing taxes with the IRS. If you know that your child support should not affect the levels of taxation at the end of the year, it gives you a little more financial security in the present moment, which allows you to more effectively plan and budget your child-support check each month. You should know exactly what the final number will be without having to account for a portion of it being owed to the federal government.

If you are the spouse who is ordered to pay child support, you should know that you will have no significant advantage. Child support is not considered a tax deduction for the party ordered to pay it. Therefore, you cannot deduct the overall amount of the payments from your taxable income when reporting your annual taxes to the IRS. You are required to report your income, including the entire money you paid out for child support to the federal government each year.

Paying child support does not entitle you to claim children as dependents.

Usually, the custodial parent has the right to claim children as dependents, as long as all of the tests from the IRS claiming exemptions are met. In order for the parent who pays the child support to claim them as dependents, additional steps must be followed. If you issue a check to help financially provide for them each month, it does not necessarily grant you the automatic ability to claim that tax credit.

In order for the noncustodial parent to claim children as dependents, they must file a Form 8332, which allows the custodial parent to release their rights to claim them as dependents on that year’s tax return. This form is known as a Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent. Bear in mind that you must have a separate form for each child that you plan to claim as a dependent that year.

The custodial parent can also complete this form for a set number of years into the future. If you do so now, you can prevent hassles and headaches during each tax season. If the plan changes in the future, the custodial parent can also revoke the release of the claim to be an exemption—with a new form for each child.

Prepare for tax season early.

Filing your taxes when you receive child support does not have to be an arduous, time-consuming, and frustrating process, as many may be led to believe. It helps to plan early and know what your rights are, learn the proper process for filing your taxes to claim dependents, and accurately report your income.

If you have any questions regarding the finer details of filing your taxes following divorce, consider hiring a tax accountant to assist you. Search for a professional who is well-versed in handling situations that financially mirror your own. A good tax accountant can help you efficiently and correctly complete your taxes, which will take away some of the pressure and burden that this time of year can bring about.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

What Does Irreconcilable Differences Mean? Sep 12, 2017

Vocabulary is a significant part of the divorce process, and knowing what various terms mean can make a huge difference in your progress towards finalizing your divorce. Filing on the grounds of irreconcilable differences seems to be growing in popularity. If your attorney recommends this claim, do you know what it actually means?

Find out if filing for divorce based on irreconcilable differences is the right choice for you and your spouse by understanding the basics of these principles.

Irreconcilable differences means that your marriage cannot be saved.

Every marriage consists of two spouses, each of whom have their own unique habits, opinions, personalities, upbringings, all of which contribute to who they are as individual people. Those items not only contribute to their personality and character, but also can also add up to the breakdown of a marriage. Both spouses could be equally at fault for the end of the marriage in terms of dysfunctional communication.

Common issues that can lead to bigger struggles within the marriage and ultimately lead to irreconcilable differences include parenting, religion, money management, relationships with extended family members, and other day-to-day items. Irreconcilable differences means that the details of a successful, healthy future cannot be worked out between spouses, even with a serious attempt to do so, such as counseling or therapy.

Unfortunately, both spouses do not necessarily need to be on the same page regarding the likelihood of salvaging the relationship. Even if you feel like your marriage is unsustainable based on the issues you are both experiencing, your spouse does not need to agree with you in order to file for divorce due to irreconcilable differences. (This caveat may vary depending on state laws in your area.)

Irreconcilable differences means that no one is at fault.

Filing this status means that your marriage will end in a no-fault divorce, placing equal responsibility for the dissolution of your union on both spouses. Unlike other options for filing for divorce, irreconcilable differences does not place the blame solely on one spouse, or label them as being at fault for the breakup. A fault divorce can be far more difficult and time-consuming than a no-fault divorce, which means that filing with irreconcilable differences can often lead to faster divorce times, depending on your state’s laws.

A faster divorce has more than just the benefit of saving precious time when it comes to moving on with a newly single life. Particularly on behalf of a spouse who was wronged, it can save a significant amount of money on your attorney’s fees. A no-fault divorce allows attorneys to avoid the hefty time investment associated with carrying the burden of proof for whatever underlying reason ultimately contributed to the split, even if the cause was adultery or abuse.

State laws regarding irreconcilable differences will vary.

Keep in mind that each state has its own laws and could possibly even have different terminology for a divorce filed on the grounds of irreconcilable differences. Some states may refer to it simply as a no-fault divorce. Other states may offer irreconcilable differences as the only option for filling for divorce, therefore not allowing one spouse to place blame on the other, regardless of the specific circumstances.

Laws surrounding separation when filing for irreconcilable differences may vary as well. In many cases, these types of divorces can be completed quicker than others, so there will be different separation periods based on state laws before a couple can pursue finalization. While some states offer very quick turnaround times, others require lengthier waits before the courts will accept and finalize your divorce.

In many states, splitting up your assets will not be affected by whether you file for a fault or a no-fault divorce. They are typically divvied up according to the typical standards set for your area and the agreement or negotiation between the two of you, regardless of how you choose to file for your divorce. However, filing for a no-fault divorce (as opposed to a fault divorce) could affect items such as custody, alimony, and child support.

Understand the definition.

In short, filing for divorce on the grounds of irreconcilable differences means that you or your spouse does not believe that the marriage can be salvaged in a way that will result in a successful future together. The implications of filing for divorce based on irreconcilable differences can be far-reaching, including the potential for a faster, less costly divorce process. Be sure to understand all of the state laws for your area before deciding how to file for divorce. This decision could have long-term repercussions for your future, so be certain to do all of the necessary research in advance.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

Why do you need to set goals for your divorce? Sep 12, 2017

Goalsetting is a critical component of having a successful divorce. Setting appropriate goals, even in the middle of your divorce, helps you identify where you are, versus where you would like to be. It gives you an excellent means to realistically evaluate both your present and future, and take the first few steps (be they hesitant or enthusiastic) towards your own success.

How do you go about setting the divorce goals that will lead you toward a successful future as a single individual? Every decision you make regarding your divorce should be made with your goals in mind. As such, it is important to ensure that you know the best guidelines for setting realistic goals for yourself. The following three guidelines will give the building blocks for setting the best goals for your own future.

1. Decide what you want out of life.

Do not allow yourself to get swept up in the minutiae of daily responsibilities, or get to the finish line as quickly as possible. Instead, keep your mind focused on what you want your future to actually look like. While it may seem nearly impossible in the midst of your emotional turmoil, take time to step back from the stress and envision your ideal future.

You should consider each aspect of your life, and take time to consider these kinds of questions:

What type of custody arrangement do you want with your spouse?
What type of financial supports or arrangements will you need to make, in order to achieve a comfortable lifestyle for yourself and your children?
How much of your joint debt can you afford to assume? How much are you willing to help pay as the future moves forward?
What will retirement and investment savings look like as a newly single individual? Ultimately, you want to consider the real question at hand as you set goals for yourself: If you could live your life in any way that you choose, what would it look like in light of your pending divorce? Deciding what is important to you now can help you begin crafting that life on your own.

2. Create actionable steps for your goals.

Once you decide exactly what you are hoping to achieve, it is time to start putting actual steps in place to reach success. Select a few actionable steps that would allow you to measure progress towards your goals. They could be relatively simple things, or long-term plans broken into several steps. They could be things such as obtaining a job or a better-paying position, setting a stricter budget, reevaluating your retirement savings, or doing something fun with your children over the weekend. Putting a few steps in place (no matter how basic they may seem) gives you the ability to work toward your goals without feeling defeated during the process.

Experts recommend making goals using the SMART acronym; each goal should be Specific, Measurable, Attainable, Relevant, and Timely. Each step that you put in place should correspond to all five of those categories in order to move you that much closer to your overarching goal for long-term success and stability.

In particular, consider setting a deadline on your specific goals, which will force you to act on your progress within a set period of time. This plan is designed to motivate you to achieve progress faster than you may otherwise be able to.

3. Have some flexibility in your goals.

Understand that sometimes things do not work out the way you plan for them to. Be willing to maintain some flexibility within your plan if things go amiss. Many individuals will want to set a few overarching goals that they would like to achieve within their divorce, and acknowledge that there may be multiple ways to achieve the same outcome. The goals may look different in your day-to-day life than you imagined, so your flexibility can come into play.

You may also want to be flexible about the fact that the goals and steps you set for yourself and your family could be more time-consuming than you originally anticipated. Therefore, be patient with the process while you continue to set measurable, attainable steps toward the goals you set for yourself.

Summary

Setting goals for yourself is crucial to helping you determine which decisions within your divorce are in your best interests for the future. Each decision you and your spouse make regarding your split will have some repercussions for your future as an individual. Your goals can help keep you focus on the bigger picture, instead of getting caught up in the details.

Keep an open mind in both your approach to each goal and the results that you achieve along the way. You may find that your goals shift as you get further into the divorce process and begin to get a better outlook at what single life will look like for you. Revising goals that no longer serve you well is acceptable, and you will want to be flexible and open to this possibility.

Goalsetting can certainly be a stressful process, which forces you to consider where you currently are, compared to where you would like to be. However, with Specific, Measurable, Attainable, Relevant, and Timely goals in place, you can move toward your future in confidence, apart from your spouse.

Shawn Leamon, MBA, CDFA is the host of the “Divorce and Your Money Show” and Managing Partner of LaGrande Global, with offices in Dallas, New York and Hanover, New Hampshire.

0156: 5 Easily Avoidable Divorce Mistakes You're Making Today Sep 12, 2017

This episode will cover five easily-avoidable mistakes you may make during a divorce.

Do not get divorced without getting legal advice.
Do not fail to verify budgets and statements of net worth.
Do not assume your attorney will take care of everything.
Do not try to get through the divorce without a support system.
Do not assume you can change your divorce settlement later.

A lot of people think they can do a divorce themselves. Even if you are savvy, and your spouse is reasonable, you should still consult a lawyer. You may be able to hammer out 95% of the details on your own, but you want to make sure that you aren’t missing any steps. It can save a lot of time and headache later on. This goes for both you and your spouse. You cannot guess on your personal statement of net worth or financial affidavit. Find exact, verifiable numbers. If you are incorrect, you could be accused of intentionally misrepresenting your finances, which can damage your credibility. Conversely, if your spouse is manipulating numbers, you will want to address it. You are in charge of your divorce. It’s your life and your future. Your attorney is there to help you with the legal aspects of your divorce: navigating your local laws and formalizing a legal agreement. They are not there to review your financial information or calculate your budget – a certified divorce financial analyst can help you with those things. Your attorney is instrumental to the process, but you are ultimately in charge. One of the biggest issues in divorce is the emotional component. You should have a support system so that you don’t go through it alone. That may mean finding a therapist, going to a support group, or confiding in close friends. Do not try to keep your emotions bottled up, because they may affect decisions you make during the divorce that will impact the rest of your life. Many people think they can make changes later on, but that is not the case. There are limited circumstances where you can re-open certain issues, but it will always be an uphill battle to do so. The legal fees will be expensive, and it will also re-open emotional issues. Make sure that your settlement is right the first time. Sometimes it is helpful to have an outside opinion to review your case before you settle to make sure you are getting a fair deal. Avoiding these mistakes will put you in a strong position to be successful for your life after divorce. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0155: The Key Basics of Child Support Sep 07, 2017

This episode of the Divorce and Your Money Show is about child support. This one of the most essential issues of divorce when children are involved. We will answer some basic questions about child support in this episode. What is child support? It is a mandatory payment that occurs during divorce whenever there are minor children present (under the age of 18 or 21, depending upon your state). Child support lasts until the child is an adult. The only exceptions are some children with disabilities who require support into adulthood. From a tax perspective, child support is not taxable income to the person receiving it, and is not tax-deductible for the person paying it. This differs from spousal support – the person who receives spousal support pays taxes, and the person paying it receives a tax deduction. Who gets child support? The parent who has primary custody of the children receives child support. In the case of 50/50 child custody arrangements, there is usually one parent who is considered the guardian or custodial parent. The guardian still receives some child support in 50/50 custody arrangements, albeit less than if they had primary custody. Why does child support exist? Child support laws were made to ensure that children grow up with all of their needs taken care, hopefully living a similar lifestyle to what they were before the divorce. These laws were created when our society was different – men were the primary income-earners, and women stayed at home and raised the children. If a couple divorced, the woman was often left to raise the children alone, with little job skills to support her family. Before these laws existed, the husband could run off and not be required to pay anything, leaving his children in poverty. These laws exist to ensure children are taken care of. How is child support calculated? Every state has specific rules on child support, so you can search online for your state + “child support calculator.” In general, the calculation depends on the spouses’ income levels, how many children there are, and sometimes other factors. These calculations usually don’t allow much leeway, except at high income levels. The laws may dictate a certain percentage of earnings be paid up until a certain income level, say $200,000. If your income exceeds that limit, your child support will be determined either in negotiations with your spouse or before a judge. However, for most people, the guidelines will be pretty firm and you have to abide by those calculations. It isn’t an area that you should fight over, because it’s not going to be flexible. How is child support paid? Usually, child support is paid directly from one spouse to the other on a monthly basis. Some people choose to go through an intermediary. If you don’t pay your child support, your employer may garnish your wages. Likewise, if your ex-spouse is not making child support payments, you can file a claim with their employer to garnish their wages. What if you are concerned your child support payments aren’t being used for the children? Sometimes, the ex-spouse treats child support like free money that they can use for whatever they want. If this is the case, consult your attorney. There are remedies to ensure child support is being used for the kids. If you receive child support, make sure that full amount goes towards the children’s food, clothes, schooling, etc. Document all of your child support expenses so that if someone were to ask at any point in the future, you could show how much you spent, and on what, in a given month. It can come back on you later if you aren’t clearly documenting everything. This is an important topic if you have minor children when you get divorced. Make sure you know the basics of child support in your state and what to expect. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0154: 4 Reasons Why You Should Give Up the House in Divorce Sep 06, 2017

This episode of the Divorce and Your Money Show discusses the reasons to consider selling your house when getting divorced. Many people come into the divorce process with strong preferences on this issue because they have an emotional attachment to their house. This episode will help you consider all sides of the issue. It’s a good idea to think about the financial side, because your house is one of your biggest assets. Here are four reasons to consider not keeping the house.

The house is a burden.
Refinancing is complicated.
Homes are expensive to maintain.
You may end up worse off than you would have if you sold the house.

After divorce, your income as a single person will be lower than it was as a couple, but your expenses will be similar. Given this reality, can you really afford to keep the house? A larger percentage of your income will be going towards your home payment. If your home payment is very low or you live very frugally, it may be possible, but for the vast majority of people, it is not a good situation to be in. It may not be financially feasible for you to stay. If you have two names on the mortgage, it is difficult to take one person’s name off. From the lender’s perspective, they will want both people to be liable to make sure that payments continue to be made. Since your income will now be lower, it will be hard to obtain refinancing. A home is more than just a mortgage. There are property taxes, utilities, maintenance, general upkeep, repairs, etc. Are you able to afford all of the expenses? Sometimes, people want to keep the house to give their kids stability. However, if you are struggling to make payments, will your kids really be better off? Selling the house and downgrading can afford you more financial stability and flexibility. If your home is taking away from your income, it can put you in a tough position. It may do more harm than good. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0153: When does Spousal Support Normally End? Aug 31, 2017

When does spousal support end? Whether you are going to be paying or receiving it, it is important to know. Most of the time, spousal support will not last forever. State laws vary, but they are relatively consistent about what conditions cause spousal support to end. It should be written in your settlement agreement; if not, consider adding these conditions in. Here are the five cases where spousal support ends: 1) When the recipient of spousal support dies. If the person receiving spousal support passes away, the support ends. It will not be passed along to a child or another party. 2) When the payer of spousal support dies. If the person paying support dies, support can end. That support may be essential to your livelihood, so you can find yourself in a very difficult position if you were receiving support. Two previous episodes of this podcast (58 and 91) discuss life insurance to cover any remaining support obligations. This is highly recommended for anyone who’s receiving spousal support. 3) When the recipient remarries or cohabitates with another person. If you are receiving support and you marry a new person, the support will end. In some cases, people try to get around this by living with a partner without marrying them. However, divorce settlements typically specify that if you live with a new partner for a certain amount of time, your support will end. This can be as little as 2 or 3 months or as long as a year of cohabitation. You may wonder how your ex-spouse will know if you are cohabitating. In some cases, the ex will hire a private investigator to find out. 4) When the payer of spousal support retires. When someone retires, they usually will not continue to pay spousal support. However, there are cases where you can end up paying support even after you retire. You can negotiate this in your settlement agreement, so think about this in advance. 5) When there has been a substantial change in financial situation for either party. If the person paying support loses their job for a substantial period of time or if they become disabled, they may be able to renegotiate spousal support. Conversely, if the person receiving spousal support suddenly receives a large inheritance, their ex may request renegotiation. For many of these cases, you need to still know what is going on in your spouse’s life to some extent in order to know if you could renegotiate spousal support. You may not have any desire to communicate with your ex-spouse again, but you may want to informally keep up with what is going on in their life through acquaintances. If possible, it’s helpful to know if any conditions change that might affect the support obligations. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0152: 4 Reasons You Don't Want "The Most Aggressive" Attorney Aug 29, 2017

To get over 40 hours of information organized into easy topics, visit our Store. There you will find the best divorce resource in the United States – all 150 episodes of the podcast, organized to make it easy to find the information you need. In this episode, we will discuss a common misconception. Sometimes, people will have an urge to punish their soon-to-be-ex-spouse in the divorce, so they look for the most aggressive attorney that they can find. Attorneys know that many people have that mentality, so some of them are marketing heavily to you in search engines. They may be paying $25 or $50 per click when you search for aggressive divorce attorneys, just for you to just visit their website. They want to persuade you to hire a tough attorney, especially when you are angry, so they can convince you that you need a fighter. However, that might not be in your best interests. In some circumstances, an aggressive attorney may make sense, but for most people, it does not. Let’s face it – most people want to get divorce over as quickly as possible, with a fair result, and at a reasonable cost. Most of you just want to get what is fair, without bankrupting yourself in the process. Even if you hate your ex-spouse, you probably just want a reasonable result and to move on with the rest of your life. Here are four reasons why you might want to avoid an aggressive attorney: 1) The divorce will be much more expensive. An aggressive attorney is going to be a lot more expensive because every issue becomes a big fight. You will always be on the offensive, submitting motions, and hiring experts. The attorney’s billable hours will pile up. What could have been a $5,000 - $10,000 divorce can become a $100,000 divorce very quickly. Your attorney will goad you into more fights, creating more expense. You may end up spending $5,000 fighting over a $200 set of silverware. On top of that, you will not be able to get to a settlement very easily. Aggressive attorneys want to fight it out, drag your ex through the mud, and punish them. That punishment comes at your expense – selling your cars, emptying your retirement accounts, and double-mortgaging your home. 2) Judges hate aggressive attorneys. The probability that you will be settling your divorce is lower with an aggressive attorney, so you will end up spending more time in front of a judge. Judges have a good sense of the local attorneys, an over-stuffed docket, and they don’t want to spend a lot of time on any one case. This is why many judges don’t like aggressive attorneys, and find them an annoyance. Picture a yappy chihuahua barking at a stranger – all bite and no bark – versus a relaxed chocolate lab. An aggressive attorney is like a chihuahua, making lots of noise about small things that don’t really matter. This is how many judges feel about aggressive attorneys. Every little thing becomes a big issue and a waste of time. It frustrates judges, and they often treat the client as an extension of that attorney. If you have an attorney that the judge likes, you can end up with a more favorable outcome. 3) Aggressive does not mean effective, and it does not mean tough. My favorite attorneys are pretty low-key, but they are experienced, sharp, and devastatingly effective. They may never raise their voice or show much emotion, but they crush some of the more aggressive attorneys with their tenacity. You do not need an aggressive attorney to get a good result. One of my favorite sayings is, “An empty can rattles the loudest.” There’s nothing actually in the can. Many aggressive attorneys are all bark and no bite, and don’t have a lot of substance to them. A skilled attorney who doesn’t have an aggressive style usually wins the day. 4) It is emotionally draining. Divorce is already tough enough, but when you add an aggressive attorney or two to the mix, it creates an all-out war. Aggressive attorneys have a tendency to misconstrue the truth. They sometimes come out with wild accusations, adding conflict to the process, and it ultimately is not helpful to their case. It may feel good at first to get fired up and try to punish your spouse, but this is ultimately a business deal – splitting up your assets, debt and property. Adding emotion to the process is not helpful. Your objective should be to put yourself in the best position possible for the rest of your life after the divorce. For most people, aggressive attorneys are not a good choice. They are expensive, judges don’t like them, and it doesn’t necessarily mean you will end up in a better place. To be fair, some situations can call for an aggressive attorney. For example, if you have a custody dispute and there is a serious mental issue, a history of abuse, or an alcoholic spouse, then an aggressive attorney might be worth considering. However, for most people, it is not the best choice. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0151: What is a Capital Loss Carryover, and Why It Could Be a HUGE Asset Aug 24, 2017

This episode discusses the concept of a capital loss carryover. You might not be familiar with this important term. If you have a capital loss carryover, it is a valuable asset that needs to be treated as such in your divorce. What is a capital loss carryover? You may be familiar with capital gains. A capital loss is exactly the opposite. When you make an investment in a house, a stock, or a bond, you expect to make money on it. However, all investments have risk, so sometimes, they decrease in value. When you sell an investment for less than what you paid, you have a capital loss. In previous episodes, we have discussed paying capital gains taxes when you make money on an investment. In contrast, a capital loss allows you to write off future taxes, which is called a capital loss carryover. Here is an example with simple numbers: You have an investment, and you lost $100 when you sold it. A couple of years go by, and you have a different investment that has a gain of $30. Normally, you would have to pay tax on that $30, but your previous loss will cover those taxes for you. You will still have $70 in losses left over. However, if you sell another investment for a $200 gain down the line, you will not have to pay taxes on the full amount. Your $70 capital loss carryover will reduce the taxable amount to $130. At that point, your capital loss will be exhausted. Here is the point: capital losses help you offset future capital gains taxes. You can even write off part of your annual income taxes because of your capital loss. Because these losses can lower your tax bill going forward, they are considered an asset. Think of it as a gift card for your future taxes. Therefore, it is important to be aware of your capital loss carryover during a divorce. If you are not aware you have a capital loss, you cannot negotiate for it, so your spouse would get all of the tax reductions going forward. How do you find out if you have a capital loss carryover? You can find it on your tax return in Schedule D. Consider seeking help from an accountant or a certified divorce financial analysist. Then you will not miss something that could benefit you. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0150: How To Prepare for Divorce - The Ultimate Guide Aug 22, 2017

This is the 150th episode of the Divorce and Your Money Show. There are now over 40 hours of information to help you through one of the most difficult times of your life. One of the challenges with a podcast is that there is no order to the episodes. We have covered so many different topics, and it can be difficult to find the information that you need. You may be working on your financial affidavit, and that’s your only concern for right now. Maybe you’re concerned about your house, and looking for that information. Maybe you’re concerned your spouse is hiding money. It’s difficult to go through all 150 episodes to figure out which episodes are the most relevant for you at your current stage of divorce. So, we have made a change. If you look at your podcast player, you will see that only the past 10 to 15 episodes are available. We want you to always have the latest information, so you will always have access to the latest episodes. However, the older episodes are now organized into key topics, so you can focus on what is most relevant to you. This way, you can get the information when you need it, such as how to negotiate, dealing with your attorney, and common mistakes in divorce. The episodes are organized into a course called How to Prepare for Divorce. It has all of the podcast episodes, including interviews with experts, for a small fee. If at any time, you need one-on-one help, you can request an introductory call on our Coaching page. In coaching sessions, you will get personalized help for the issues that matter most to you. Before you go, visit divorceandyourmoney.com: 1) Sign up for the email list to get exclusive tips you won’t find anywhere else. 2) To get access to the best divorce resources in the United States, check out the store here. 3) Get personalized help. Learn about coaching services here. Thank you for listening!

0149: I Was Served! How To Respond To Divorce Papers Aug 17, 2017

Being served divorce papers signifies the beginning of the end. Unfortunately, it does not always mean that appearing in court will necessarily happen quickly. Finalization could be months or years away, even after you have divorce papers in hand. In the meantime, what should you do to make the most of this time? Preparing for the inevitable end of your marriage can give you a feeling of control. But it can also assist you in receiving all that you are entitled to as a participant in your marriage. Taking charge of the situation during this initial phase can give you a successful start toward a favorable resolution to your divorce process. Once you are served with divorce papers, what do you need to do first? Here are a few tips for getting started on the right path: 1) Get organized. When it comes to finalizing your divorce, you cannot underestimate the importance of organization. Begin by using this time to gather pertinent documents, including tax returns, bank statements, and information about retirement savings accounts. The more work you can do at this stage without the pressure of a time crunch, the more thorough you can be at assembling and gathering everything you need. This stage could also be a good time to begin thinking through which assets or properties hold significant value to you. Is there a piece of furniture you want to claim in the settlement? Make a list of these items now—without the heat of spousal squabbles. Then you can more easily clarify which items are most important to you. 2) Assemble your team of professionals. Depending on the complexity of your divorce, you may need to hire quite a few professionals to assist you. Team members may include an attorney, a certified divorce financial analyst, a forensic accountant, or a private investigator. Be sure to do research to determine which professionals have extensive experience in their field and great customer reviews. You can also use this time to consider how much of the work you will be doing on your own. Some prefer to file their own paperwork, or you can just work out a settlement negotiation with your spouse. Others find their divorce to be more complicated. Therefore, they may need the assistance of an attorney to go to trial. Knowing how much you want to complete on your own and how much you plan to spend can assist you with hiring the right professionals for the job. Remember that the people you hire to handle your divorce are there for a purpose. It will be a business relationship, and should be managed as such. Select professionals that you can work with well, as you could be spending a large amount of time and money with your team. The professionals you hire are the people responsible for assisting you in receiving the best possible settlement. These decisions are crucial for the future of your financial security, and they cannot be overlooked. 3)If possible,try to open the lines of communication with your spouse. If possible, healthy communication can certainly speed up the process of agreeing on a settlement or a custody arrangement for your children. When a healthy level of open communication is possible, the process can be easier, less emotionally taxing, and significantly faster. The more you and your spouse can sort out between you, the less involvement you will need from attorneys and other team members. If you open the lines of communication, both of you will typically have an easier negotiation and lower attorney fees. However, under certain circumstances like abuse, bullying, or manipulation, you should not even consider communication. In these kinds of situations, allow the team you have assembled to handle most, if not all of the communication between the two of you. 4)Take care of your own emotional health. Even though divorce is an extremely emotionally turbulent time in anyone’s life, the professionals you hire are not there to hear about your feelings. Instead, you hire them to handle the facts, and create a favorable divorce settlement; that is truly all you should be sharing with them. Therefore, you will need to find another outlet for the emotional response triggered by the impending end of your marriage. For some, this outlet can be as simple as talking with friends over drinks, or taking a yoga class to practice mindfulness. If you have a smaller support system, you may want to consider enlisting the help of a professional therapist. It may be worthwhile to consider seeking professional help to find coping skills if you feel overstressed. Over time, the burden of extreme emotional distress can take a toll on your physical health and psyche. Sorting through your feelings can improve your well-being, and it can allow you to participate in your divorce process with a calmer demeanor and more level head. This mindset allows you to be firm during all the negotiations that are involved after being served divorce papers. Early in the process, take control. Being served divorce papers truly is the first step toward finalizing the end of your marriage. And it is the start of something new. You will quickly discover that there are a lot of items on your to-do list that require your attention. By taking control of the situation now, you can enter the rest of the process with increased levelheadedness and a sense of calm. Take the first steps towards securing a financially healthy future in your soon-to-be single life. Once you are served divorce papers, it is time to take control of your life. Following these steps will help you before the divorce process even begins. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0148: Divorcing a Disabled Spouse: 3 Things You Should Consider First Aug 15, 2017

When your spouse has a disability of any type, it adds an additional layer of stress to your divorce. Now this already emotionally tumultuous time is filled with extra responsibilities and concerns that must be addressed before your divorce can be finalized. If your spouse has a disability, you will need to contemplate whether they have the long-term capacity to support themselves without your assistance. When it comes to divorcing a spouse with a disability, what do you need to consider first? Here are the first three questions you will want to start answering now: 1) What level of service do you currently provide for your disabled spouse? The first thing you will need to do is accurately assess the amount of assistance that you provide for your spouse. Think about all of the things you do for them on a daily basis, including driving them to appointments, helping them shower, and running errands for them. After the divorce is over, these items will still need to be completed, even after they are living on their own. In order to assess your own role in their care, consider making a detailed list of activities that you regularly assist them with. Make a list of the items that they could perform on their own, as well as the ones they would be incapable of completing without the assistance of another person. An honest evaluation of their abilities will help you answer the next question with more accuracy. 2) Will your spouse need additional services? Without your daily assistance in caring for them, your evaluation of the level of service you provide them with should help you determine if they will need additional services in your absence. In order to continue their daily care in your absence, you may need to add professional services to maintain their standard of living. What will the exact arrangements need to be? There could be some level of involvement from family or close friends, combined with professional services. Arrange for a part-time or full-time caregiver, or at least obtain a few estimates of what the overall expenses will be for them to continue their daily care. Now is a great time to begin considering whether your spouse can cover the costs of their current income on their own, or if they will need government assistance. Based on their newly single income, your spouse may qualify for social security and disability, which can greatly assist the two of you to figure out how to cover the cost of their care without obligating you to continue performing it day after day. 3) Can you afford spousal support? Are you a significantly higher earner, or is your spouse incapable of earning enough to support themselves financially due to their disability? If so, you may end up paying spousal support to contribute towards their necessary care. Because your spouse has a disability, your required level of spousal support could typically be higher than the general population. Spousal support is often mandated to help cover the cost of services and care that your spouse will not be able to afford, based on current income or benefits. Spousal support is often considered permanent in these situations, at least until your spouse has a change in disability status, remarries, or receives new or additional benefits, which would change the necessity of your spousal support. The severity and type of their disability will certainly play a role in determining the monthly amount of spousal support. This scenario is also possible: you may be required to pay for their health insurance or assist with medical bills, in addition to paying spousal support. As a part of your divorce agreement, you may be able to keep a spouse on an employer-sponsored healthcare plan. Divorcing with a Disability It should be no surprise that divorcing a spouse with a disability is likely to entail a greater degree of planning than may otherwise be necessary. Remember, to start off on the right foot, make sure you have a thorough, accurate understanding of what you currently do for your spouse, as well as what would need to be done in your absence. Solutions can vary from having the assistance of a family member to hiring a caregiver. While you should not remain in a failing marriage that makes you unhappy, you will definitely need to consider the higher rates of spousal support. Alongside your spouse, begin investigating what additional benefits or programs they qualify for, and assess what you can reasonably afford on your income. Divorce is difficult, even under the best of circumstances, but adding a disability into the equation creates a new level of difficulty. By answering these three questions in advance, your current divorce will begin on the path towards future freedom and financial security for you and your spouse. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0147: 4 Tips to Speed Up Your Divorce Process Aug 10, 2017

Sometimes in divorce, it feels like one spouse is dragging their feet and the divorce is taking too long. Your spouse may be causing delays: rescheduling meetings or court appearances, requesting an extension, or taking a long time to give you information that you need. In some cases, it may be your spouse’s attorney that is slowing down the process, either as a deliberate strategy or just out of incompetence. You may feel helpless in the face of these delays. How can you speed things up? There is no silver bullet for these issues. Every locale has its own rules and procedures, so you’ll have to check with your attorney to see if the options below will work for your situation. Be aware that it’s important to document everything. Document every email and phone call, every rescheduled meeting, and every time you follow up on something and do not receive a reply. If you ultimately go before a judge, you can bolster your case by showing that your spouse or their attorney were causing delays. There are four options that may help you to speed up your divorce: 1) A motion to compel In broad terms, a motion to compel is when the court sets a date for your spouse to reply to a specific request or to provide documentation that you have asked for. If they missed that date, they can be held in contempt of court. Often the penalty will be a fine, but there are other consequences that can follow. For example, the court may place an evidentiary restriction that limits the evidence that your spouse can provide for their case. The most extreme penalty is jail time. If you’re waiting on a specific request, see if a motion to compel is an option for your situation. 2) Settlement conference in front of a judge Although it’s often preferable to avoid going to court, there are times when it can be beneficial. A settlement conference will allow you to meet the judge, test out a few arguments with them and get a sense of how the case would go if you end up resolving it in front of the judge. A settlement conference can be good motivation for your spouse to try to look as good as possible, so they will often address any outstanding requests shortly before the settlement conference so they don’t look like they’ve been ignoring you. 3) Subpoena a third party In some cases, you need information that is held by a third party. As an example, let us say that your spouse has worked for a particularly employer and has a retirement plan at Fidelity. You need information about their retirement plan, but your spouse is taking forever to get that information to you. In this case, your attorney may be able to subpoena Fidelity to get those records. There are some legal technicalities, so check with your lawyer if it will be an option to get information that your spouse is not providing willingly. 4) Default judgment If your spouse has repeatedly been missing deadlines, you may have the option of asking for a default judgment. This means that if your spouse fails to respond for a certain period of time, the court can issue a judgment of whatever you ask for (within reason). The non-responsive spouse’s side will not be considered. It can take a long time for a default judgment to happen, and there are restrictions in place to protect your spouse, but it’s worth looking into if there hasn’t been movement on your case. When it comes to divorce, there is no easy solution. Unfortunately, some things in divorce just take time. It can take 3-6 months between court appearances in some places, particularly if the courts are backed up. However, if your spouse or their lawyer is actively slowing down this process, and you have documentation, bring these options up with your attorney. You may be able to force the process to move forward. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0146: How to Get a New Home After Divorce (Even with Bad Credit ) - Interview with Max Townsend, Licensed Real Estate Agent Aug 08, 2017

"Many times people oversimplify what’s needed before they put the house on the market. There are all these little things that ultimately get caught by home inspection that will later turn into a negotiation that very rarely favors the seller. What I advise people to do is get a pre-inspection and have the home looked at by an inspector.” - Max Townsend In this episode we interview Max Townsend, a licensed real estate agent in Texas. Max shares great details about how to sell your home during divorce, and he provides some key tips for moving on and getting a new place after divorce. Max covered a lot of ground we’ve never discussed before on the show — and some great advice most people don’t know about! You’ll definitely want to listen to this episode. To learn more about Max Townsend, check out his great site at http://maxtownsend.com/. Be sure to sign up for his great newsletter! (Seriously — it’s great!) Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0145: Should you take support in a lump sum or periodic payments? Aug 03, 2017

It’s difficult to predict the outcome of divorce. However, there’s one statement that applies almost universally: most people have more options for their settlement than they realize. There are ways to structure a settlement that most people don’t think about, particularly when you are settling out of court. One option that many people don’t consider is doing a lump sum payment for spousal support or child support. Spousal support is often done as a monthly payment over a certain period of time. However, you could do one large payment, or a few large payments, instead. In some cases, this won’t be an option, because the spouse who is paying support needs to have multiple years’ worth of support in their savings. However, when it is a possibility, it is worth considering. One of the biggest benefits in paying or receiving a lump sum payment is that you are done dealing with your ex-spouse, with the exception of child custody. It can be a big burden lifted. If you will be receiving spousal support, you don’t have to worry about whether they are going to make their payment every month. If you will be paying spousal support, it can bring up a lot of emotions every month when you write that check. When you do a lump sum payment, there are different tax considerations. For monthly spousal support or child support, the person who is paying support gets a tax deduction for that amount, and the other spouse receives it as taxable income. However, with a lump sum payment, there is no tax deduction, so the person who is paying the support pays the taxes. A lump sum payment will be a smaller amount than the total monthly payments would be. For example, if you were to receive $10,000 a year for ten years, you would receive a total of $100,000. However, a lump sum payment might be a check for only $70,000. Receiving $70,000 today is the same as receiving $100,000 over ten years. If you’re interested in why this is, you can look into present value calculations. It’s a well-accepted mathematical formula that takes into account the interest that you would receive over time. Therefore, with a lump sum you aren’t paying (or receiving) less money, it’s just a question of timing. To decide whether a lump sum will be right for you, you need to know yourself. If you will be paying spousal support, will you be bitter every month when you pay that money? Some people don’t mind it very much, but others have a very negative reaction to every spousal support payment. If you will be receiving spousal support, are you able to manage your money so that you can make that money last? Are you able to stick to a financial plan? Getting that much money up front is almost like winning the lottery – and 70% of lottery winners go bankrupt within five years. It’s very tempting to spend money when you have a large amount in the bank. Another thing to consider is how much you trust your ex-spouse. Do you trust that your ex-spouse will make their payments on time? If they start missing payments, you may have to get the courts involved. Your ex-spouse may fall on hard times themselves, like losing their job. Conversely, if you are paying child support in a lump sum, can you trust your ex-spouse to manage their money? If the money runs out, you will still want your children to be provided for. Paying spousal support in a lump sum can solve some financial complexities, so it’s something to consider as you work out your divorce settlement. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0144: Self-Care during Divorce Chaos - Interview with Dr. Robbin Rockett, host of Solo Parent Life Aug 01, 2017

“When your feelings get big — whether they’re sad, or grief or anger or helplessness — slow down and breathe. Really take a moment. If we respond when we’re feeling really emotional, it may not be the real twist that we wanted to make in the long run. It might feel really good in that moment, but it might not be so helpful in the bigger picture.” — Dr. Robbin Rockett In the middle of divorce, the range of emotions can feel overwhelming. In this episode, we interview Dr. Robbin Rockett, a clinical psychologist who experienced divorce. She discusses how to find a support group, why you need a therapist and ways to take care of yourself during the divorce process. You’re going to want to listen to this episode more than once! Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services and a full transcript of this episode. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0143: Post-Divorce Finances (Part 7) - Key Financial Documents to Update after Divorce Jul 27, 2017

This is the final episode in a 7-part series on your post-divorce finances. Some documents and accounts need to be updated by the time your divorce is finalized (or as soon as possible after it is finalized). This practice can potentially prevent many future problems. One set of documents involves estate planning. They contain details about what should be done in the event of your death or incapacitation. The first thing to consider is the last will or trust, which lists the beneficiaries who will receive your assets or property when you pass away. If your ex-spouse is included, this information may need to be changed. Another set of documents is called a medical power of attorney or medical proxy. This document lists the person who will be in charge of making medical decisions if you cannot. A similar document is the financial power of attorney, which also needs to be updated if you do not want your ex-spouse making financial decisions in the event of your incapacitation. These documents are fairly easy to set up, but if you do not have them, a judge will be forced to make these decisions for you. The next item is a checkbox about most of the financial accounts you may have, which is called the beneficiary designation. Here, you will list the person who will get your account or assets should you pass away. Whether you are preparing for divorce or have finalized it, you should update this information. Other miscellaneous accounts also need to be updated post-divorce. You can check the accounts you have in common with your spouse by checking your credit report. They include bank accounts, credit cards, vehicle registration and titles, insurance policies, and retirement and investment accounts. Depending on the settlement, you should either remove your name or your ex-spouse’s name from these documents and accounts. You also need to update documents with emergency contact information. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0142: Post-Divorce Finances (Part 6) - Is Your Financial Advisor Doing a Good Job? Jul 25, 2017

This episode is the sixth part in a series about your post-divorce finances. If you have not already heard the first five parts of this series, be sure to listen to them because they build upon each other. By now, you should have outlined your financial goals, found out how to choose a financial advisor, and learned some key financial terms and concepts. Even if you are early in the divorce process, planning ahead will help you know what you need to think about during the divorce. How do you know that your financial advisor is doing a good job? You may not keep the same advisor for the rest of your life, and in some cases, you may want to consider changing advisors. Here are some tell-tale signs that you may want to change sooner rather than later: 1) Your investment performance is worse than the benchmarks. Monitoring your investment performance is an important part of assessing your investment strategy. For a given year, what return are you receiving on your accounts? Of course, stocks fluctuate from day to day and year to year. To see how your investments are performing, compare them to benchmarks (i.e., groups of other stocks). For example, the S&P 500 is an index of the top 50 stocks in the US. Perhaps your stocks went up 5% in one year, but the S&P 500 went up 7%. If so, you may want to ask your advisor why. However, perhaps the stock market as a whole went down one year, but you lost more money than the benchmark. If so, that is a problem. If you see a trend where your portfolio is repeatedly performing worse than the benchmark year after year, you should strongly consider making a change. We recommend that you do your own research to learn what the best benchmarks are to accurately compare your portfolio. 2) Your investment portfolio is overly complicated. For most people, a few investments are enough. Those investments might be funds, such as an index fund that contains 500 stocks. However, each investment will be a single line item in your portfolio. Reportedly, Warren Buffet, a great investor, plans for his money to be invested in just two funds after he dies: 10% in short-term government bonds, and 90% in Vanguard’s low-cost S&P 500 index fund. Keep in mind that Buffet is a billionaire, but the point is that it is fine to have a simple portfolio. You should understand every investment in your portfolio. If you have 50 different line items in your portfolio, it probably is not a good sign. 3) You have red-flag investments in your portfolio. You should probably not have some types of investments in your account if you are listening to this podcast. You are unlikely to need any high-fee investments; they are probably unsuitable for you and your lifestyle. Low-fee investments will help you earn more money over time from your investments. Below is a list of investments that are not appropriate for most people. If you have these investments, you should reconsider keeping them:

Structured products
Annuities
Hedge funds
Private equity funds
Any kind of illiquid fund, which involves locking your money up for 2 years or more
Options
Any sort of directional strategy
Anything that cannot be explained in a few sentences, or that takes up more than one sheet of paper to explain in-depth
Anything that has high fees (over 1.5% for any investment fund)

To decide if your financial advisor is doing a good job for you, you should look at the three points above. Of course, they are general recommendations, so please take your own circumstances into account. Remember to seek professional guidance about making the best decision for you. In the next episode, we will discuss the financial documents that you will need to update after your divorce. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0141: Post-Divorce Finances (Part 5) - What Kinds of Investments Do You Need? Jul 20, 2017

This episode is the fifth part in a series about your post-divorce finances. This series will help you make more informed decisions about your finances during and after your divorce. If you have not already heard the first four parts of this series, be sure to listen to them because they build upon each other. This episode will use a lot of the terminology that was explained in the last episode. Here, we will discuss the investments you will need in your post-divorce life. Investments are a very complicated topic, and people spend their entire careers specializing on a single facet of investing. Therefore, this series will only be a brief introduction. When you sign your divorce papers, you will usually find yourself with a sum of money. The amount will vary, but you will probably not want to leave it in a bank account. Rather, you will more than likely want to invest it so that you will see better returns. Most of you have many years left ahead of you, so you will want to plan for the rest of your life. Keep in mind that you do not need to rush to invest as soon as the divorce is settled. Many people take some time to settle into their new lives before making major financial decisions. To keep it simple, you will probably want to invest in a mix of stocks and bonds. More elaborate investments are unnecessary. The sooner you expect to withdraw that money, the more bonds you should have. Stocks suffer from the volatility of the market. Therefore, if you are older and your portfolio is stock-heavy, you may find that an economic downturn has a severe financial effect on you. However, if it will be many years before you need to use that money, it makes sense to invest in stocks. As long as the economy continues to grow, your stocks could increase in value over the long-term. If you wait out any short-term volatility, you will receive higher returns. Bonds have less volatility, although they also have lower returns. If you are near retirement, then your investment portfolio will probably have more money invested in bonds than stocks. You want to have the certainty that the money will be there when you need it. Depending on your financial advisor, you may consider commodities (e.g., gold, oil, wheat) or real estate. However, mutual funds and hedge funds are still essentially investments in stocks and bonds that are managed for you. Investment returns are uncertain, but one thing that is certain is that lower fees will give you better returns over the long term. For both stocks and bonds, index funds have lower fees. There is nothing wrong with a simple, boring investment portfolio. Ultimately, it will be best if you understand what you are investing in. If you do not understand it, you do not have to put your money into it. You will need to do further research to understand all of your options, but remember that a lower-cost option will ultimately benefit you in the long run. In the next episode, we will discuss how to tell if your financial advisor is doing a good job for you. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

0140: Don't Rush Into Post-Divorce Financial Decisions - Interview of Shawn by Dr. Robbin Rockett, Psy. D Jul 18, 2017

"After divorce or a big life change, whatever it is, and you’re on your own, just take some time to get acquainted, get back with yourself, figure out what you’re doing, what’s important to you, and get up running. That’s really the first place you start before making any rushed financial decisions, because that’s a good way to make a big error without thinking about it.” Marriage over. Divorce papers signed. Money transferred. Rest of your life begins. Now what? One challenge after divorce is figuring out who can help you plan your finances for the rest of your life. There are many different financial advisors (and people who call themselves financial advisors), investment strategies, terminology, and calculations to consider after divorce. How do you begin to make the right decisions? In this episode Shawn is interviewed by Clinical Psychologist Dr. Robbin Rockett, Psy. D, the host of “Solo Parent Life” podcast. Thank you for listening to the Divorce and Your Money Show. Visit us at www.divorceandyourmoney.com for personalized coaching services and a full transcript of this episode. If you enjoyed the show, please take a moment to leave a review on iTunes, as it will help other people discover this free advice.

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