Latest / Divorce Dialogues / The Caregiving Conversation Divorce Brings Into Focus | Raymond Lavine
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- Raymond Lavine (00:00): Most people don't even think about it until the moment that it happens. People will plan in advance for their funerals. They'll plan in advance for their vacations. They'll plan in advance for their meals. Most people are usually not conscious of caregiving planning at all until it's immediately needed. People seem to be very surprised about how complicated and how many decisions they have to make in caregiving because they haven't thought about it. Katherine Miller (00:27): Welcome to Divorce Dialogues. I'm Katherine Miller. This is where we have honest, thoughtful conversations about divorce, the emotional, financial, legal, and family questions no one prepares you for. From deciding whether to separate, to navigating the process with dignity, to rebuilding what comes next, Divorce Dialogues is here to help you find clarity, perspective, and a better way forward. When people are going through divorce, there's an enormous amount of attention on financial security. Can I afford the house? What will my income look like? How much will I have for retirement? What does my budget look like now that we're supporting two households and it never looks as good? These are important questions, but most of them are based on the life you can see right now, right in front of you tomorrow, next week. And one thing divorce does is change some of the assumptions we made about the future we cannot see so clearly. (01:29): Who will be there if I need help someday? Who will care for me as I get older? What happens if I can't live independently and how would I pay for that care? These aren't necessarily questions we associate with divorce itself, but if we're really talking about building financial security for the next chapter and the remaining chapters of your life, then we have to think beyond the settlement. We have to think more holistically about your entire life. And we have to think about risks that might be years away and whether some of the assumptions that we're making now that we made when we were married still make sense as we plan for the future on our own. And that's where my guest today, Lavine, comes into the conversation. Raymond is an extended care benefits advisor who helps individuals and families prepare for the financial realities of long-term care. (02:24): And today we're talking about the financial risks that can be easy to overlook during divorce and why protecting your next chapter means thinking beyond the settlement. Welcome Lavine. I'm excited to have this conversation today. Raymond Lavine (02:37): Good morning, Katherine. I'm from the state of Washington and you're in the opposite part of the country in New York, so greetings. Katherine Miller (02:44): It's really great to have you. And my clients really ask me these questions all the time and I'm not really sure what to say. And conversely, a lot of people say, "Don't bother me with that. I need to figure out what I'm going to do next week, next month, next year." And sometimes are resistant like Scarlet O'Hara basically saying, "Fiddle EV. I'll think about that tomorrow." But tomorrow Raymond Lavine (03:05): Is another day. Katherine Miller (03:06): Exactly. So when someone is going through the divorce, they are understandably focused on the immediate financial picture and they should be, but what are some of the longer term risks that tend to get overlooked? Raymond Lavine (03:17): If I may have a preamble to that, you probably have the wrong kind of guess in me is that I'm really following about gray divorce and all these different things that are going on about divorce and where people are going with this. But the way that I advise people is that anytime that you go through a stressful period, and trust me, I mean divorce other than death of a child or your own death is about as stressful as you're ever going to get. You get overwhelmed. You have all these things that you have to think about. So the way that I advise people is it's a process. Sometimes you just need to concentrate on the immediate things and then you don't have to do everything on Tuesday. It's fine to spread it out or make a list of what things you need to do, but you don't need to do everything all at once. (04:08): It's a process because if you don't, you get overwhelmed. And I will say that personally, when that happens to me, I get overwhelmed and I go through decision fatigue. Katherine Miller (04:17): Yeah. If I could just interject there for a second, Raymond. I like to think of it as building a house. First you have to start with the foundation, then you have to build the first floor, and then you have to build the second floor, and then you have to build the third floor, and then you can start thinking about the balconies. And of course you need to be thinking this house is going to have balconies when you're putting that all up there, but you're not thinking about what the chairs are going to look like and what the rugs are going to look like. You have to do it one step at a time. And I think that that allows people to think, "Yeah, so first let's put a foundation in place here that works and now we can build the first floor on top of that." And I think that planning for retirement or for older age is definitely part of that structure, but maybe not the foundation of it. Raymond Lavine (04:59): And it needs a checklist of what things that you need to do. And this is where an attorney, a lawyer is helpful in the process. My parents were lawyers and it wasn't that they were dispassionate, but you can't let a client's, their emotions overwhelm or you'll never get anything accomplished. It's like a doctor. If they take everything that a patient says internally, I mean they couldn't function. So what a good lawyer, an effective lawyer does is help you through the processes to say, "Okay, look, if you want to build something, first you need an architectural design, then you need the interior decorator, then you need the builder. Also, you need a bank account too. That also helps." Katherine Miller (05:36): Definitely does. Raymond Lavine (05:37): But that's where an effective attorney is that you're not into the emotions. What you are is I think into the practicality of say, "I'm going to help you through this process." And it's emotional. The interesting thing too about marriage, because I've paid attention to the history of marriage, is that marriage has never been about love and it's never been about intimacy. It's always started off, it's economic. It's a dowry, it's money. And that's actually I think the true definition of marriage. So then when a marriage, it's like the business and you're changing the business model. Katherine Miller (06:13): Yeah. Well, I think that a marriage is a social unit that includes an economic relationship and it's a social unit on which much of our society is actually built. And a lot of that is economic. It's nice, love is good and it helps it work. But the idea that it's not financial, I think that in modern times we have been as a society more focused on the relational aspects of it and less focused on the business aspects of it, which is why I really encourage everyone who's thinking about getting married to at least have a prenup conversation because it forces you to have that business conversation. In any event, back to the topic of long-term risks that people overlook. And I hear what you're saying. Don't start with the long-term risk of getting divorced, but think about it as part of the plan. What do you think, Raymond, are some of the things that people sometimes forget to look at or just don't look at? Raymond Lavine (07:07): Well, as you're going through the divorce process, you're looking at a person's assets, the home, the retirement plans, but you also have to look at the insurance. What life insurance do they own? What medical insurance do they own? But the other thing, and I regret that a lot of advisors don't get into it or advisors say before you get divorced, if you don't have a long-term care plan, and even if you have lots of assets, it is more efficient to own a long-term care plan. We can talk about that later if you want, is to have a long-term care plan in place. And the reason I advise that and they say, "Well, he's doing this because he wants to sell something." Well, yeah. I mean, I'm advising because it's a good investment, but the reason is that it's the discount, especially for women. It used to be that long-term care plans were gender neutral and there was male and female, same rates. (07:56): And then about 10 years ago, because they were seeing how long the women were using long-term care plans for longer periods of time, then they change it to gender rating and the females at the premiums became higher than for the men because they used it longer. So before the divorce is final is to have it in place because everybody gets a discount. That's the first thing. And that is premium. The second thing is the earlier you do it, the premiums will be less. And also you have to decide who will pay for the premiums because that's also in settlements too, who pays for what and for how long. Whether if one person has far more income, whether they pay the premiums. I'm in that situation now where I have a client where in the divorce agreement he's going to pay the premiums. So it's premium, but also depending on your age, if you're a younger age, you're in your 40s or 50s or 60s, the premiums are less. (08:54): But the other thing is when you're buying time, and what I mean by that is it's time for your benefits to grow. I mean, here's the human thing too, and you know this better than I do. Usually it seems like the guys, no matter what age, somehow seem to find a partner or a partner faster, and maybe then they have a care support person. So the reason, especially for women to have a care plan before divorce and have that in place is they may or may not have a partner. So then they want to make sure that they have a care plan that they can pay for a caregiver if they want to remain at home or if they need to go to a care center that there are funds available for that. Katherine Miller (09:36): Divorce changes the assumptions that people have about aging and caregiving, that you're going to have each other, you're going to be there to support each other at least for a period of time. And now all of a sudden, at least the first person to age rapidly or get sick or whatever will have a caregiver there. Not that we ever walk down the aisle thinking, "I can't wait to change this person's diapers," but that does happen. Raymond Lavine (10:00): They say, “for better, for worse, for richer, poorer, ‘til death do us part.” I don't see anything in the language that says, "And I'll be involved with your caregiving." Katherine Miller (10:08): Right. It kind of works out for a lot. And also for a lot of women, just because of the statistics on aging and because oftentimes this is less true these days, I think, but oftentimes women are a little bit younger. But in any event, I think that what you're saying makes a lot of sense. And so Raymond, if someone is divorcing later in life, they don't have, imagine, this long-term care insurance plan in place. Talk about what that person can do and what makes it a little bit more complicated as they think about planning for their later years. Raymond Lavine (10:43): I'll use the word gray divorce. It's people that have been married maybe for 20, 30, 40 years and for various reasons. They both say we don't. Or one or the other says, "I want a divorce or I want a separation." There's also now a term I call sweet divorce. Are you familiar with sweet divorce? Katherine Miller (10:57): Yes, but those people aren't actually calling my office. Raymond Lavine (11:01): Well, that's true too. Well, actually in a way it is. I have read a situation where people are divorced or separated, but for financial reasons, they're still in the same house if it's big enough. But anyway, I digress. What things if you're older? If you're not in good health, if you're older, then you have health assessment. You may not be able to get a plan or the plan that you want. There are plans no matter what your health that you can get, no matter what your health. The other is it's premium. The older you are, the higher the premiums. Why? It's the obvious thing of you're closer to needing caregiving. That's the morbidity table that you have to deal with. So what do you do? Well, I mean, there are a lot of situations where the wife or the woman, it may be financially doing very well because of her career, maybe inheritance. (11:48): It could be a lot of things. If they already own life insurance, one of the things they could do, and I always find never sell your life insurance and never let it lapse. If you're at that point where you need extra assets, sell your life insurance. Don't let it lapse and just trade it in if it's convertible because you can get a lot better. If you sell it as a life settlement, you'll make more money. You'll have more funds for your caregiving you needed. Katherine Miller (12:13): Divorce Dialogues is brought to you by Miller Law Group. We believe divorce isn't just a legal process, it's a human transition. At Miller Law Group, we help people navigate divorce with dignity, clarity, and respect, focusing on conversations that lead to better outcomes for families. Learn more at miller-law.com. Let me just stop you there, Raymond, for a second, because I think a lot of people are very confused about life insurance and the different types of life insurance there are. So I think it would be useful for the listeners if you could just walk through the options there and explain what you mean about selling it. Raymond Lavine (12:49): If you own a cash value, they call it permanent, the cash value life insurance, it builds up and then it's an asset. When you're talking to clients, they're listing their assets and a lot of them probably own life insurance. Most cases they own term insurance, but a lot of cases they may own life insurance because of the business or they're doing it for estate planning. So either way, if you have a cash value, it builds up value. It's something you can sell. It's an asset. If you have a term plan, you have to look to say if it's convertible or depending on when it comes up, you still might be able to sell that term insurance plan and get money because again, it's an asset. Katherine Miller (13:29): I think that people really are unaware. And let me just tell you one other thing I want to talk about is that a lot of people who have owned a whole life policy, a cash value policy as part of estate planning have it in a trust, and that's very smart planning. And at the same time, those trusts often say some pretty drastic things about what happens in the event of divorce. Sometimes they say things that the people don't want to happen, but it's too late. And so also really want to talk about making sure that you align your estate plan with your long-term plan with your divorce plan. Raymond Lavine (14:07): Well, I hadn't thought about it that way. I mean, whether if it's a revocable or irrevocable trust, I hadn't thought about that. We have our life insurance in a trust and I think it's revocable reading. The point is, yeah, that's something to look at to say how is it held? What is the purpose of the life insurance? And that's the other thing too, actually. If the life insurance, you really need it to pay for your state taxes or other expenses, then don't sell it unless it's a term plan and then eventually it will term out. But if it's a cash value plan, yeah, then you have to decide how you want to use it. If you don't need it because you have a young family and you're going to die prematurely, then maybe you say, "I don't need as much or I don't need it," then you can sell it. (14:47): But if you have the life insurance and you need it for specific purposes, estate planning that it provides cash and the very wealthy buy millions of dollars worth of life insurance, not because they're looking to sell it, they're looking for it to have liquidity for their estates. I hadn't thought about it about how it's held and then can you take it out and sell it? That I don't know. Katherine Miller (15:08): Okay. So let me just ask you this. When do you think in the divorce process, if at all, that somebody should be looking at their existing long-term care plan, their policies, benefits and what they have in place and maybe looking to revise it? At what point in the process would be appropriate? Raymond Lavine (15:26): It doesn't need to be the first item. It doesn't even need to be the fifth item, but I think in the divorce planning, I mean, I would think that the first thing any attorney wants to know is what do you have? What assets do you have? What insurance, retirement plans, what inheritance, what's community property, what's not community property? I think you have to first figure that out and have them say, "Do you want a long-term care plan? Do you want life insurance?" As part of the fact finding sheet is hopefully asked that. And if it isn't part of it to ask for, "Do you own a long-term care plan?" Every estate planner or divorce should ask that and then they can decide whether to say, "Let me recommend that you at least look into the long-term care plan." It's just part of the process. I think you had to go through some of the basic stuff and then the long-term care plan. (16:16): I would think that would be further down as you sort through all the main issues. Katherine Miller (16:21): All right. So if someone is listening and they're in the middle of a divorce, but they have not yet thought about long-term care, what questions should they be asking now to better protect themselves? Raymond Lavine (16:31): Well, you have to ask the question of if you need a caregiving, because nobody thinks about it. And most advisors don't say, "Hey, how are you going to pay for your caregiving?" Few advisors bring it up unless the client brings it up. And then it depends on whether you advocate it or you don't advocate it or you say, "Look, you got enough in income and assets, you don't need it." And so some might say, "No, I really think it's important." Others, I'll believe you. And believe me, if you have enough assets to say, "Do I have enough assets for how long? A year? Supposing you need it for five years or 10 years. Do you really have that much in assets?" And I can tell you a personal story about that. My mother was an estate planning attorney and my parents were not insurance buyers. (17:15): During my parents' marriage, my father had several very long-term care situations, but by the time in their 70s that he was dying of heart disease and my mother had to put her practice on suspend, they finally looked into long-term care plans. My father couldn't get it because he had preexisting condition. My mother bought a long-term care plan. She bought it in her early 70s and then started in her 80s. And my mother died a few years ago. She was 103 and she used her plan for 20 years. But there's more to the story because my mother was very affluent. And we're not talking about, oh, you're high net worth, your four million. We're talking about 100 million and we're talking about somebody that had the income to pay for whatever she wanted. And I asked her, "Why did you buy a plan?" And she gave me what I thought was the best answer I've ever heard. (18:06): She says, "Nobody has that much money to pay for the lifestyle and their care." And my mother was frugal, even though she had a lot of money. She never had to worry about eating, never had to worry about lodging, never had to worry about anything other than what humor I might apply to her that she may or may not have approved. But anyway, the point is that she was very affluent, but even she understood that. But let me just also put this in arithmetic terms. My mother was sort of the atypical person of, it was a gradual process how much care she needed, but the last five or six years, she lived in West Los Angeles near UCLA, that's a high affluent district. My mother needed 24-hour care times seven, times 30, times 360. And if you figure it was maybe around the clock, 50, $60 an hour do the arithmetic care. (18:58): Yeah, it gets expensive. And so even though she had the income, she found owning a long-term care plan to be an excellent investment. The first question I always ask somebody is, what do you want your caregiving to do and where do you want your caregiving? And who do you want to be responsible for your caregiving? And as part of that, to have somebody that's an advocate. I have a personal story. Last three months I've been through very severe health issues and that's given me perspective about healthcare, power of attorney, medical power of attorney, all these things that come into the process of even if somebody's had estate planning, if you're getting a divorce, you may have to update all these things and you need it. The other thing that's important too is passwords. In divorce or if you need caregiving, that's also extremely important, especially in the 21st century, is people have to know your passwords or they have to have power to get your password because your life doesn't stop and the payments don't stop. (19:59): So if you can't do it, then you got to have an advocate or some responsible fiduciary person that can keep your life going because if not, it's going to grind to a halt and it's a very painful experience. Katherine Miller (20:09): I have a question that I always like to ask people and I call it the reframes. What I'd like you to help us with is that we often think of divorce planning as figuring out how to divide and protect what we've got today. How would you reframe that conversation so that people also think about protecting the life and the risk that they'll face in the future five, 10, 20 years from now? Raymond Lavine (20:29): Would you mind if I said it in a poem? Katherine Miller (20:32): Sure. Be my guest. Raymond Lavine (20:34): All right. This is a rewritten poem. It's called If. The original was written by Rudyard Kipling. And what it was about is your responsibilities. And this is what caregiving I believe. Caregiving is about responsibility, both those that need caregiving and those who will be responsible for caregiving. So I rewrote it and it's called if, and it says, "If you can sit beside the kitchen table and speak the words no one wants to say, if you can plan today while you are able for caregivers, caregiving seasons that may come some distant day, if you can love enough to ask if truly, where will I live and who will have my care?" If you can have that talk and speak it newly before the time when choice grows thin and spare. If you can see beyond the present hour to years when strength may falter, hands may shake, if you can choose with quiet lasting power what care looks like and for those who care for you, if you can write it down in language clear, a blueprint that your family will have so no one stands bewildered, gripped by fear with only questions haunting, heart and mind. (21:46): If you can shield your care keepers from the cost, both of what is owed in dollars and in soul, the careers interrupted, sleep-filled nights lost, the way the caregiving takes its toll, then when the day arrives and come, as it may, your family will walk the path you've laid. They'll carry forward love, not debt to pay, and you will leave behind a debt repaid. You'll leave them not just what you came to own, but clarity and grace and dignity, a prompt kept, a future gently known, the rarest gift, the gift of a caregiving plan. Katherine Miller (22:21): That's very wise. All right, so I have one more question and that is about surprise. You've been doing this a really long time, helping families plan for these issues, some of which you just mentioned in the poem. What surprised you the most about the assumptions that people make about who will care for them and how it's going to get paid for? Raymond Lavine (22:41): The authentic answer is that most people don't even think about it until the moment that it happens. People will plan in advance for their funerals, they'll plan in advance for their vacations, they'll plan in advance for their meals. Most people are usually not conscious of caregiving planning at all until it's immediately needed, or there are exceptions. The exceptions are somebody's been in a caregiving situation, they've had to take care of a parent, a family member, that they're aware of it. Sometimes people in younger ages, they've had to take care of parents or children, so they have the idea of caregiving or you have advisors that will bring it to their attention, advise them to have the conversation about caregiving. I get calls all the time. People seem to be very surprised about how complicated and how many decisions they have to make in caregiving because they haven't thought about it. (23:34): It's just not in people's vocabulary. And in most situations, people know more about how to use their computers than they know how to buy insurance or how to think about what kind of insurance to buy. Katherine Miller (23:45): Those are wise words. Lavine, thank you so much for joining me on Divorce Dialogues to talk about planning for your future. It's a really important conversation. If this conversation was helpful, share it with someone who might need it. And if you're navigating divorce yourself, you'll find more resources and episodes at miller-law.com. Make sure to subscribe wherever you get your podcasts.