Divorce and Your Money - #1 Divorce Podcast

Shawn Leamon, MBA, CDFA
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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.

  1. 11/19/2021

    How to Get Divorce Help

    Podcast episodes are coming less frequently, but I am still here to help you.   Book a one-on-one coaching call: https://divorceandyourmoney.com/coaching/ Get ALL the podcast episodes in the Quick Start Guide here Get the book Divorce and Your Money: How to Avoid Costly Divorce Mistakes on Amazon

    2 min

  2. 10/27/2021

    0232: How Does Spousal Support Work? - Part 2

    0232: How Does Spousal Support Work? - Part 2 Visit us at divorceandyourmoney.com for the #1 divorce resources in the USA and get personalized help.   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.

    15 min

  3. 10/06/2021

    0231: How Does Spousal Support Work? - Part 1

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

    15 min

  4. 08/03/2021

    0230: A Restraining Order to Protect Your Money in Divorce (Automatic Temporary Restraining Order)

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

    13 min

  5. 07/19/2021

    0229: What Date Do You Value Assets in Divorce?

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

    14 min

  6. 05/19/2021

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

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

    18 min

  7. 02/16/2021

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

    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

    54 min

  8. 01/17/2021

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

    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

    34 min
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About

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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