Latest / Marci talks money (and life) / A Less Stressful and Less Expensive Path to Divorce: Mediation with Joe Dillon
Transcript
- Marci Grossman (00:16) Hello, I am MoneyMarci and welcome. Today's guest is Joe Dillon. Joe is a pioneer in divorce mediation who has been helping couples navigate the end of their marriages with dignity and financial wisdom for over 17 years. As co-founder of Equitable Mediation Services, Joe combines his MBA in finance with specialized training from Harvard, MIT and Northwestern University. to guide couples toward agreements that protect both their emotional well-being and financial futures. As a child of divorce who witnessed firsthand the devastating impact of attorney-driven litigation on families, Joe brings personal experience that, combined with his professional expertise, enables him to help couples focus on creating agreements that work for everyone, especially the children. Joe pioneered virtual divorce mediation in 2011 nearly a decade before others adopted online practices during the pandemic. His results speak for themselves. Equitable Mediation Services maintains a 98 % case resolution rate, significantly higher than the industry average of 70%. As a sought after expert, Joe has been featured in Business Insider, Newsweek, Forbes, HuffPost, Yahoo, MSN, and the Daily Mail. His blog has attracted over 1 million visitors. Joe believes divorces don't have to be destructive. With the right guidance and expertise, couples can part ways amicably while protecting what matters most. Welcome, Joe. Joe Dillon (01:54) Thanks for having me, Marci. I appreciate the intro. That guy sounds great. I hope we get to talk to him. Marci Grossman (02:00) Yeah, yeah, no, he sounds interesting. We'll bring him in in a minute. So I want to confirm, you are not an attorney. Joe Dillon (02:07) I am not an attorney. No, MBA finance, kindred spirits. Marci Grossman (02:10) Okay, and then when you went to Harvard and MIT and Northwestern University for additional training, this was mediation specific. Joe Dillon (02:17) negotiation. In fact, I was fortunate to be, I believe, one of the first enrollees in the Harvard Program on Negotiation. And there's a very famous book called Getting to Yes. If your listeners haven't seen it or heard it, I suggest you read it. And the course was being taught by the authors of that book. And since then, I don't want to date myself, but you know, back in the 90s, you know, this is a really big deal. And they have since blown up and it's become, the Bible, if you will, on modern negotiation. It was really fun to be in that course and get to know those guys then. And then at Northwestern, they actually were then featured guest speakers. And I went up to them after the lecture. I'm like, I was one of your first students. So it was pretty cool actually, yeah. Marci Grossman (02:59) Well, I like when there's a win-win situation and, when you go through a standard divorce, which sometimes, unfortunately, is what's necessary, you end up with the attorney's win. Joe Dillon (03:07) Yeah. Exactly, exactly. 100%. I mean, people forget how much that toaster or that television or that whatever is gonna really cost them because they're not getting the bill in real time. The invoices for attorneys typically show up at the end after the dust is settled and that's when the sticker shock sets in. Marci Grossman (03:28) Right, in my first season I did talk to an attorney who handles some divorce work and he talked about how it's ridiculous, you're spending thousands of dollars to argue over a $200 IKEA silverware set or dishes. Joe Dillon (03:46) Right. Yep. Yeah, and that's where math really comes in right. A lot of people don't see it in them in the moment When you think about what am I going to gain? And what am I going to spend in order to get this. And I see that day in and day out and that's part of how I can help sometimes talk people off the ledge and say well, we're talking about ten dollars a month in child support. Your child is 17 That's about a hundred and twenty dollars. Do you really want to get a lawyer whose hourly rate is probably what four or five hundred dollars an hour? to fight over the $120 or could we maybe agree that you'll all go out to dinner and split the check? ⁓ Marci Grossman (04:24) You Well, I mean, let's face it, mediations cost less money and I assume take less time than an attorney-driven divorce and theoretically both parties walk off with more money than they would have. But is there, do you have a chart or ratios that you can put out for people so they can see? Joe Dillon (04:33) yeah. Right. Right, yeah, absolutely. Sure, yeah, so if you have a friendly, friendly attorney driven divorce, I know that sounds like jumbo shrimp, right? That's kind of, Joe, what are we talking here, buddy? But, you know, friendly attorney driven divorce is between 25 and $50,000. So that's if things go well and everybody gets to the table and we collaborate and all that kind of stuff. Marci Grossman (04:55) Ha Joe Dillon (05:10) That's just to say hello. If you really go sideways, you're looking at 100, $200,000. I, unfortunately, I've had family members who have experienced this level of divorce and this level of litigation. So I know this for a fact. It's not just me pulling stats. When you look at mediation, even... the most complicated mediations would be less than $10,000. Like just soup to nuts, know, even if you got an attorney and wanted a review and you needed a CPA to look at this and you needed to get additional documents drafted and the court fees and the, you say to yourself, and many of them cost less than that, but you look at yourself and you say, I don't know how about you, but I'd rather put my own kids through college than my attorney's kids through college. I'd take those 200,000 and put it in my pocket and along those lines, I share the story not to sound kind of like a jerk, but I was at a networking event. It's going back a few years ago. And I remember, you know, when you're at a network event, you're in a room with a bunch of people, right? And you're talking to the person you're hearing, but you also hear other snippets of conversations. And out of one ear, I overheard, I swear to God, I heard a colleague that I knew to be an attorney say to the person they were speaking to was, thank God this thing went sideways because my kid's tuition is due and I wasn't sure how I was going to be able to pay it. They were happy. this divorce was going sideways because that meant their child was going to an Ivy League University. I don't want to name it so it doesn't create any drama. But I was like, wow. I'm like, my god, that's terrible. It's just terrible. But that is a true, sad but true, story. Marci Grossman (06:47) Well, and I've had a friend recently go through an ugly divorce. There was not a huge amount of money. The attorneys probably walked off with it as much as they did because he just did not want to agree to whatever it was. And all of these things, there was no reason for this divorce to go sideways. And they could have both walked off and he just was not willing to. Joe Dillon (06:53) Yeah. Right? Right. Marci Grossman (07:16) to concede anything. he got less money in the end. More aggravation and less money. Joe Dillon (07:20) Right. Yeah, and that's a classic case of what we in the negotiation profession call positional negotiation. When you're in a position, right? I'm right, you're wrong. It's black, not white. Positional bargaining never works because if I have a position and you have a position and we don't agree, we're just gonna keep pushing, you know, pushing our own position. We wanna shift in mediation to interest-based negotiation. So taking this example, I would say to these folks, do you have an interest in preserving your wealth? Do you have an interest in retiring? Do you have an interest in not having to mortgage your house to pay your And who's gonna say no to that? So then you get them to say yes, and then you can use that as the carrot and keep saying, well, you told me you were interested in not bankrupting your future. If we don't come to agreement here, that's what's going to happen. So how do we do that and help them come along? And that's just one of the many tricks we use in mediation to get folks to understand you do have a shared interest. If as simple as this might sound, and I know, forgive me, I don't mean to discount anyone's divorce at all, but two people who have come together and said, we want to end this marriage. Great, you have a common goal. Let's achieve that goal. Marci Grossman (08:41) Right, right, and you know, let's achieve it with the most money in each of our pockets. Joe Dillon (08:45) Right, correct, correct, 100 % because your attorneys, that's just like you said, that's just going into, when I go to colleagues' offices and attorney's offices and they've got like branded water bottles that they're giving people sitting in the lobby in mahogany furniture, I'm like, who do you think's paying for that? You are. that's coming right out of your 401k, that mahogany leather chair that you're enjoying in the lobby. Man. Marci Grossman (09:13) So other than the financial of me wanting to make sure that I won, when we finish this divorce, I don't care how you end up, but I gotta know I won, what other blind spots are there? Joe Dillon (09:23) ⁓ wow. ⁓ of a sense of right and wrong in a marriage and as someone who's been married 20 years I know that I'm not perfect, my wife's not perfect, collectively we are perfectly imperfect. And when you look at that and you're constantly in this I'm right you're wrong, you're also trying to assign blame and fault and that's also a blind spot because the blame and the fault also is the kerosene feeding that fire of digging in and you're hurt, you're angry, that That's what people are not recognizing. They're letting their emotions drive the divorce because they're hurt. They're disappointed. You don't think the other person's disappointed too? No one, as far as I know, gets married with the intention of getting divorced. That would be insane. You're both disappointed. You're both angry. If you recognize that, that can help ⁓ a lot and go a really long way with you without having you dig in. Okay, this happened. This stinks. I'm not happy about it. I'm sure my spouse isn't happy about it either. Let's just take the ball, go home and lick our wounds. It's that emotions driving divorce that really crushes people. And what really cranks up the handle on the legal bills because your attorney is your advocate. They are paid to fight for you and you alone. And they are more than happy to do that. They're more than happy to listen to you tell them about how terrible your soon to be ex is. Far as I know, many attorneys are not mental health professionals. So what are you doing? Why are you spending these outrageous hourly rates to have someone listen to what a terrible person you're soon to be ex is? Just move on, put those emotions away, deal with them in therapy, get yourself a divorce coach or therapist, and resolve those outside the divorce process. I'd say that far and away is the biggest blind spot. Marci Grossman (11:13) So that's perfect lead into my next question. ⁓ Cheryl, your wife, your partner at the practice, is a divorce coach. What is a divorce coach? Joe Dillon (11:16) ⁓ true. Yeah. Yeah. She is. That's a great question. Think of us as two sides of a coin. I'm the tactical and the financial and the paperwork that is so decisions negotiations She is the emotional, the softer skill, the softer side So collectively I always like to think I'm the most important guy in the room because I'm the mediator. But make no mistake at the end of the day as I just shared its emotions that drive divorce and if I've got two people in a room Who are just whoo on fire? It's really hard for me to do my job. We have Cheryl on staff. She's our divorce coach, working with her as voluntary. But when you work with her, she can help you understand what are your blind spots emotionally? What buttons are you getting pushed? What's triggering you to fight for the toaster or the lamp that's worth nothing? If you go up on Facebook Marketplace, it's worth a dollar. And then by helping you not discount your emotions, but put them in a box and put a lid on them so that when it's safe to take them out, and unpack them. That really helps me in negotiations. So she's the opposite. She handles emotions. She works with people say one-on-one. I always work with one-on-two, right? I'm a neutral. So it's mediator, couple. Cheryl is coach, client. and it really helps people understand not only what's triggering them, what part of the process is causing them angst, but she can also help people figure out their negotiation strategy. What do you want to ask for? What do you want to talk about? What's important to talk about in this negotiation? Because just like with a lawyer, I'm not a mental health professional, and as I share with clients, mediation is a forward-looking process. Therapy is for unpacking the past. I'm not a therapist. We say mediation is therapeutic, it's not therapy. However, I want you to move forward and then once you've gotten through the divorce, certainly unpack what happened. Where did this relationship go wrong? What was my role in it? What can I do to address that and help me move forward? And Cheryl can kind of get you on that path and help with some of those things and then send you forward in a healthier way. So we're kind of team, if you will. Marci Grossman (13:30) Okay, so when someone comes in for mediation, unlike with a divorce, they don't each come in with their own mediator. They come to a mediator together and you work with both of them to build that agreement as to how they can move on. Joe Dillon (13:39) Right. Correct. Yep. Right, and that's the beauty of it. I don't represent either people. I advocate for both of them and their children when applicable. So I'm always trying to balance everyone's best interests. And I think one of the things and the feedback we've gotten, which I greatly appreciate, ⁓ this is kind of poking fun at myself, but... When I go into a negotiation, first say, when I first meet with clients at our very first session, I say, I'm gonna tell you right now, if both of you are slightly angry at me when this is done, I have done my job. And they get a laugh, and I say, it's true, because that means I got something for one of you, but I also took something from you or asked you to give something. And I've always balanced, and they're like, yeah. And at the end of the day, they're like, you know, I have to say there were times where I really did not like you very much, but I was really happy that you did what you did, Joe, because I really feel like this was fair. And that's what I'm going for. You might not like me in the moment. I might be asking you to do something that you don't really want to do. but I'm also trying to get you to acknowledge the other side has given something, you need to give something, and that really helps people, I really, feel, helps them move forward not only now, but sets the tone, Marci, in the future, especially when you have kids, right? If you're gonna co-parent, you've gotta be able to work this stuff out. I'm not gonna be around all the time. So having them have some skills where they say, I acknowledge what you've given, I appreciate it. I will also give something and together we can move forward. And that's my approach and really how I try to help people. Marci Grossman (15:18) So do you end up creating financial statements and helping them to understand what they're receiving? Joe Dillon (15:24) ⁓ absolutely, they're really not happy with me. I gotta tell you that right now, I say, you might think that budgets are an academic exercise, that why are you making me do budgets? I actually make people do three budgets, which is just, I'm a terrible person. As a number cruncher, I talk to them, I say, I'm gonna have you do a joint budget. I want you to tell me. in over 100 categories what your marital spending looked like over the last 12 to 24 months. I want everything from car payments to groceries to concert tickets to clothing to dental bills. I want it all. Then each of you is going to do the same exercise. alone when you're divorced for the next 12 to 24 months. Going forward, now what does your post-marital lifestyle look like? And that's phase one, and often what I find, unfortunately, in today's day, is I say, well, okay, you earn 70,000, you earn 60,000. After taxes, maybe you take home about, I don't know, 90,000, 100,000, you're spending $120,000 a year. How are you doing that? So we also do a balance sheet just like a business. Here's all your assets. Here's all your liabilities because in my brain I know I'm going to have a tough conversation ahead when I see these budgets and I see there's a shortfall. I know darn well there's going to be a home equity loan, a loan against a 401k, a bunch of credit cards and sure as shooting 100 % of the time there it is. And unfortunately as a number lover like yourself you have to have you have to be the parent sometimes even though it's never my role to tell people what to do. My preface is always, hey folks, not gonna tell you what to do, but. It appears to me as if your current spending levels are unsustainable. Looking at your apart budgets, you immediately have two housing payments, two Netflix bills, two cable, your car insurance goes up. Your expenses are only gonna get bigger. If you're not making it now, how are you gonna make it then? And that's where having budgets, balance sheets, financial statements, I do a full discovery process. We go through tax returns. No one ever does this for the people because they get their tax return, they sign it and they put it in a filing cabinet. Hey, understand . where your money's going. What are you paying in property taxes? How much are you paying in mortgage interest? How much are you spending on, we were guilty of this today. DoorDash, Uber Eats is killing people. Their grocery bills are low, their food delivery bills are in the thousands of dollars a month. I'm like, what are you getting delivered, caviar? So, but they, yeah. Marci Grossman (17:54) Those delivery fees, people are like, it's just fast food and they don't realize they're paying as much in delivery fee. Joe Dillon (17:59) Yep, right, they don't study it. So that's part of what we do. We bring a really analytical approach to what is an emotional time and that's where Cheryl comes in handy because I can say, Cheryl's gonna help you unpack the emotional stuff. I'm gonna help you unpack the financial and tactical stuff. Not that I'm not a nice guy. Not that I don't care about you. But my job is to be really clinical here because I want you to set you up for success. I don't want five years down the road like my mom. She litigated her divorce and she had to work three jobs to keep our house. She didn't have a financial plan. She paid all her money to the lawyers. She gave up everything in the divorce to my dad just to keep the house. I've seen it firsthand as as a kid and that also in a weird way lends some credence to my story. I can look at clients, tell them you're looking at someone who experienced the pull the pin out of the grenade, litigated divorce, know, wondering where the groceries were gonna get paid, that kind of stuff. And I don't want that for you. So I think people do listen to me a little more, unfortunately, because I know of what I speak. Yeah. Marci Grossman (19:07) Well, that makes sense. So now that you're coaching and training future mediators, you've kind of taken the place of the people who started you off on this. ⁓ What's it like training the next generation? Joe Dillon (19:24) It's funny. I think about when, especially when we do role plays, people are like, oh no, we don't have to do this, we? I'm like, yes we do. You're gonna be in a room. People are going to be looking to you as the expert and if you just go, ah, ba, ba, ba, ba. you've lost them. Now the inmates will run the asylum and you're not getting them. You're not getting them back, right? It's over at that point. We really try to emphasize the practical application and also the development of one's style. When you work with someone like me on our website, on this podcast, you understand who you're getting. You're getting friendly guy, finance background, non-attorney, been there as a child. of divorce, wants to help, maybe I'm your cup of tea, maybe I'm not. Some folks, for example, where maybe addiction is an issue or it's a real high conflict divorce, a mental health professional who is also a divorce mediator may be more appropriate. So when we work with students, if you will, we say, look, there is like, what do you, Joe, Joe, what do you do? What do you do? Tell me your process. I'm not going to, not to be difficult. It's my process. That's my truth, my honesty. You need to develop your own style. and that will draw to you the people who want to work with you and not with me. You can't be me. There's only one me. There's only one Marci. That's how it has to go and that's the hardest part I think for students where they are like, I thought you were gonna tell me everything. No, I'm gonna give you the framework but you have to develop and become your own person and your own mediator. So that's pretty funny with the blank looks and the doing the case studies. Marci Grossman (21:01) Yeah, from the other side of it, I tell people multiple times over and over, you've got to find the financial professionals to work with that feel comfortable to you, that are the ones you trust. If you go in there and you're like, this person just kind of rubs me raw, but boy, someone else recommended them highly, so I'm going to keep going there. You're not going to be open with them. You're not going to pay the same kind of attention. You have to find the financial people to work with. Joe Dillon (21:13) Sure. Not at all. Marci Grossman (21:30) the trust people to work with that you trust. Joe Dillon (21:33) Right, you're sharing a lot in finance and in divorce and you're sharing a lot of confidential financial information, very sensitive stuff. And if you can't be honest with me and I can't be honest with you, we have no shot. I've got your social security numbers. I've got your kids' birthdays. I've got, could, you know, if I was a terrible person, create a thousand false identities. But you're trusting me. I'm asking, you're giving. Obviously there's some kismet and some comfort. Absolutely same with financial professionals. You've got to be able to interface with them in such a way that you're comfortable and they're comfortable because the more information they have like in my space, I'm really relying heavily on my clients to educate me. I don't know anything about them until they walk in the door and go through our discovery process and still then I'm going to have a thousand questions and I need them to be comfortable with me in order to answer some of those very difficult questions like, how did you amass a hundred thousand dollars in credit card debt, right? Like I'm not judging. I'm just genuinely asking is this a lifestyle choice? Are you overspending or Like us for example our HVAC unit crapped out. I didn't have $12,000 in my pocket to fix it. What did I do? I needed heat I had to put it on a credit card. Okay, there's a big difference versus yeah We go out to eat and I bought some tickets and we went to Disney and and those are the conversations that people need to be comfortable having with me Marci Grossman (22:59) Okay. And then, so at mediation tournaments, how do you have a tournament for mediation? Joe Dillon (23:06) You Man, I tell you, those are the most fun when I've been fortunate to be a judge at both domestic and international mediation tournaments. And what winds up happening is as the judge, you're sitting in the back of the room and the, god bless the kids, they're fantastic. They're terrified, but they're fantastic. And what they're doing is there's typically four or five of them. There's one playing a mediator. There's one playing the client and their attorney. The other one playing the other. client and their attorney. So it's a real complex, not just a one on two, it's like a five way kind of thing. And what we're doing is we're judging what kind of, for example, what control the mediator person in the room has of the space, how well are they guiding the conversation, what kind of questions are they asking for the two opposing sides, like we know the fact pattern, we know both sides, they only know their own side. So we're also judging the clients and the quote unquote lawyers on each side to say, okay, are you adequately representing your client? Is your client providing you pertinent information? Did you ask, are they lying to you? Because clients tend to lie to you, right? And doing all these things and giving them a lot of feedback in terms of their style, in terms of their approach. Many times it's the stuff that we all start out with, the stop words, saying things over and over, repeating, perhaps being too directive, right? The mediator might say, you should do this. Mediators can't say that. We can't say you should, right? That's telling, that's advocating versus you giving them that guidance. So trying to get kids to understand that there are multiple sides in a negotiation and multiple perspectives and a lot of hidden agendas. And when it's over, they usually have about a half hour to an hour to do these and we're watching and we're taking notes. It's usually three judges in a panel. and we all provide feedback and after it's over, it's so funny, usually the first thing out of their mouth is like, we don't know how you guys do this professionally and the three of us will giggle and we're like, we don't really know either. Marci Grossman (25:13) boy, I can only imagine. I can't imagine having an audit tournament or a tax preparation tournament. Joe Dillon (25:22) Yeah, I didn't like the way you filled out schedule A, Marci, I'm sorry. Do it again! Marci Grossman (25:26) Ha ha! My handwriting has always been bad when computers came on the scene, made all the difference for me. Joe Dillon (25:32) Right. My mom said you should have been a doctor. I can't read your handwriting. Marci Grossman (25:40) So you practice in, I don't know how many states were listed, six, okay. Now, how does that work and how is mediation different in states? How did you end up in the particular states you ended up in? Joe Dillon (25:44) yeah, yeah. Yeah, great question. So born and raised in New Jersey, originally from that area and family originally from Manhattan. went to college at Drexel in Philadelphia as my undergrad. So that is the tri-state area. That's how I got into New York, New Jersey, PA. When ⁓ my wife and I, we don't have kids. So we were living in the suburbs in New Jersey, you know, the good school district, the whole thing. And we wanted to move to a city. So we moved to Chicago. And so we lived in Chicago for a while. And so that's, picked up Illinois when we were out there. And then one day my wife had said, you know, I just can't do the winters, the Midwest winter. anymore and I know you're gonna laugh and me I'm an ice hockey player a snowboarder I'm like this is fantastic the colder the better she's a beach girl had a beach house in New Jersey you know and she had always wanted to move to San Diego and finally it got to the point where I could see on her face that she just couldn't do it anymore. So we moved to California in 2018 and then California became another hub for us. Then given what we have here in California, high tech industry, Washington state also became natural for us in Seattle. And the way we pick the states we practice in is twofold. Number one is, is it mediation friendly? Because not all states are very supportive of mediation and it's not necessarily the first thing on the tongue. Mediation's really not super well known. That's why I'm very thankful to you for having me here on your show to be able to spread a bit of that word, but also to understand the people in those states because as we were talking about with trust, we have cultural backgrounds. We have cultural references. I want people to feel comfortable. I would never practice in Texas because I know nothing about Texas. I know nothing about Texas law. I've never lived in Texas. I visited Austin once for a few days to see a friend, but I can't relate. to the issues and the people there. I can in the tri-state area, I can in the Midwest, I can on the West Coast. And that's how we came to be. And it's been enjoyable because the laws are different from state to state. And even though I'm not a lawyer, we say mediation, you're practicing in the shadow of the law. Meaning, I have to know enough about how things work to be able to guide couples through the process. Certainly they can always retain attorneys if they choose. We're supportive of that. Not our decision whether or not, we don't force them to have lawyers. But that's how we kind and moved across the country picking up as we go. And it's really enjoyable because different states practice in different ways. The agreements are different. The process to move through the filing process is different. And we've really had, it keeps you sharp. It keeps your brain sharp because you're able to learn new laws and learn how things work and work with different clients who have markedly different issues depending on where they live. So that's kind of the strange backstory as we've moved coast to coast. Marci Grossman (28:44) So if someone listening wasn't in one of the six states you listed and they said, wow, just listening to him, I want to talk to him. He's the mediator I want, but they're not in one of those states. Could you work with them or not? Joe Dillon (28:49) Mm-hmm. Yeah. It's possible, depends on where they're at. We've done divorces in 13 states. And also we've done, which has been really interesting, we've done divorces in France, Hong Kong, Thailand, Canada, and for that very reason, people are like, I saw your website, I saw you on this program, I just loved what you had to say. And what I'll do is I'll try to find a local attorney. So I found an attorney in Paris and I said, look, I don't know you, you don't know me, but this is what's happening. And they were fascinated. They had never heard that. this was a possibility. And so they were so kind and gracious and I negotiated with the couple and then drafted up the agreement and then the attorney in Paris turned it into a legally binding French agreement and it was really a nice rapport. It was really cool. So we had a good time doing that. And so yeah, we have on our website, if people come to visit our website, which is our company name, equitablemediation.com, there's a button that says talk to us. you can click and schedule a free info call with my partner Cheryl and she'll talk to you and if it's some place where we might be comfortable in working with you or knowing we might know a colleague somewhere that we'd be able to partner with, we can certainly speak to you. If nothing else, you'll get a whole bunch of information and be able to get educated on at least the topics that you have to be educated on before you enter the process. we're big believers in education. As much as people might not want to know what we're sharing, much like in your world, my world, it's not information you really want to have, but it's really important you do. You can't make good decisions without it. Marci Grossman (30:33) That's for sure. Have you found that prenups make a difference in the mediation process? Joe Dillon (30:39) You know, I yeah, I sigh because Many times people get a prenup and don't get it signed they do it and I don't know what happened somewhere along the way Somebody convinced the other one not to formalize the prenup and they bring it in and they've got it and they give it to me and I say, okay Are are we saying that this is what we want and invariably one person will say well, I never signed that no okay, why do I have this then? The person is, well, we had a prenup, you promised you wouldn't do X, Y, or Z, and well, I didn't sign it. And that's a true statement. Unfortunately, it's not necessarily enforceable. Some folks even who do have enforceable prenups, sometimes they're very hyper-specific. And then after 15, 20, 25 years, they're no longer applicable. They never did anything to either update them or reconsider what they had at the time. The only time I've seen them work is where they're a little more broad. Say for example, if there's a prenup that says, if we ever have children, we agree that we will have a 50-50 custody plan, right? So there's no arguing over that. Or... here's all your premarital debt, here's all mine. If we ever get divorced, we're each still responsible for this debt and any debt that we created while married, we'll share. Those are the things that can sometimes work. But unfortunately, my experience with prenups is prenups are drafted by attorneys and they tend to focus really heavily on the legal aspects. As a mediator, I can draft prenuptial agreements. As a mediator, I would focus more on the practical application of it. For example, if we have children and we get divorced, we agree to live within 10 miles of each other, for example, just so we can co-parent our children. That's not in any law anywhere, it just is a practical reality of what your life might look like post divorce, and I'd rather address those kinds of issues. But to answer your question, more often than not, prenuptial agreements aren't really held in mediation. Folks don't really adhere to them. Even if they have signed them, they still wanna open them up and poke around. Marci Grossman (32:46) Well, you said update a prenup. I didn't even know that was an option. I thought you have to sign it before you get married and after you're married, how can you update it? Joe Dillon (32:56) Yeah, it's called the post-nup. For example, in a state like California, this is a little too esoteric, but in a state like California, you can have written agreements between spouses. So let's say for example, I'll give you a perfect example of my world. I'm not a musician, but I like to play musical instruments. So I've got guitars and keyboards and drum sets and all of these kinds of things. So in my marriage, if say Cheryl and I were to ever get divorced, I might rather than getting to the end of the road and arguing over the musical equipment I have, which my wife doesn't play any instruments, she sings, she would just perhaps for the spite of it. want to take some of those away from me. So I might be able to have post-nup that says, if we ever get divorced, you understand these instruments are mine, understanding that they were paid with community money, with marital money, but we're not gonna include them in our divorce settlement. Yes, I understand that. So we've created a separate agreement that will then be, provided we execute it, right? We make it enforceable. We can then, if at the time of our divorce, had something that said, yep, here is, guidance, here's a document we both signed that said Joe gets the musical instruments and the recording studio and dot dot dot. So in a way that's a post nuptial agreement. And that's popular in California, the way community property states work. If you've got those kinds of documents, it can be a big help when you've got both assets and also debts. Sometimes debts can come into play where I see this a lot, sadly, but somebody either makes a bad investment. or there might be some gambling debt, there might be something and they borrow money from a family member. And now there's no paperwork. It was just your brother-in-law gave you $50,000 and now they're like, well, we use that money to pay our bills and I want you to pay half of it. The other person is like, well, that's your gambling debt. Why am I gonna do that? In those worlds, should have gotten a document that said the money you're getting from your brother. is exclusively for your gambling debt and is separate debt and I, other party, have no responsibility for it. Those things happen. They happen with more frequency than I would care to admit That's a lot of get rich quick, business idea, gambling debt, sports betting, online, I won't use bad words for family show, but online. ladies and men who ask for money, know, so, you know, inappropriate videos, you know, these kinds of things. yeah. Marci Grossman (35:32) That's interesting. been married now, ⁓ it'll be 32 years this year. And ⁓ thank you. And he doesn't want any of my guitars, so that's fine. Sounds good. We'll have your wife sing. It's all good. Of course, I'll have to bring Mark so he can sing too. ⁓ Okay, so I guess I'm just keeping the guitars and him. you know, it all works. ⁓ Joe Dillon (35:43) Awesome! We can rock out together then. Cool! Okay, fair enough. Yeah, much easier that way, yeah. Absolutely. Marci Grossman (35:58) But it's interesting to think that people might say, because I recommend to people that you periodically have money meetings and you sit down and you say, okay, this is kind of where we're at and these are what our goals are and these are what we want to do moving forward. But maybe saying, hey, it might not be terrible to kind of write down some of these things. know, if you do it at a point in time when everyone's getting along, maybe it's not so hard to say. Joe Dillon (36:17) Yeah. Marci Grossman (36:22) Let's just put a note and date it in the file. All the musical instruments are Marci's or are Joe's. And you don't need necessarily a formal document, do you? You both signed it and it's dated. Joe Dillon (36:27) Right. Yeah, I mean, a lot of times I tell people go to your Probably your credit union has a notary public there or if you're a member of the automobile club of America, you know, and you go get to your free notary service and and go sign something in front of somebody put the funny stamp on it. At least it gives you some level of comfort that says, look, we did talk about this and I don't know if this would hold up in a court of law as I'm not an attorney, but at least look, there was some intent behind this that we said collectively, the guitars are mine. We took steps to actually physically write it up, sign it, and get somebody to witness us signing it. Can't we talk about this? Can't we exclude these items from our divorce negotiations? And even folks who do get along well, you'd be surprised, but we have a fair amount of amicable divorce couples. That's always our goal, right? To work with folks who want to get through this peacefully and amicably and save their resources. Those folks do acknowledge, look, I have no interest in your classic car. I know you've been working on that. I know you've used money from the marriage, but you've spent your weekends renovating that thing and I want you to have it. And that's really, that's nice for me to hear as the mediator that someone recognizes despite this being a financial issue that this individual put their blood, sweat and tears into it and they don't want to take that joy away from them. So that really does, if you get couples who are amicable, that happens a lot. But it's when the couples who come to us who have the axe to grind, that's where they're looking for every advantage and that's where the pre-nups get thrown out and it's a little more difficult. Marci Grossman (38:05) And in the end, even when you have an axe to grind, the ultimate goal is you walk away with the most in your own pocket. It shouldn't matter what's in the other person's pocket. getting mediation will get you more in your own pocket. Joe Dillon (38:12) Right. Mm-hmm. Right, yep, save for your own self, save your future, save your retirement. It's hard enough to retire even if you're living together or you're saving at a great clip, let alone now, and it's very common as you've probably heard, the divorce rate among baby boomers spiked and so a lot of our clients are in their mid-50s to early 60s and these are folks who cannot afford to spend $200,000 on their divorce and drain their bank account. If you're 22, looking at retirement savings is a lot different than if you're 52 or 62. The window is far shorter. And as you and I both know, the power of compound interest is very powerful. And I always remember, I lecture my friends' kids on this and they're like, oh God, if he says this again. And you know the statistic too. If you were to put money in a 401k from ages 20 to 25 and never invest it again. You would have more money than if you started investing at 26 until you retired. That math just makes your head pop off. Now you're 62 and you have nothing in your retirement. You're really up the creek without the proverbial paddle. And I don't want that for you. Keep your money, keep your retirement. You don't have to work till you're 95 years old, really. And at the end of the day, Marci, guess what? The result is the same. You're divorced. Doesn't matter. You're divorced. Your marriage has ended. You have this, I have that, why not do it in the most cost effective and time efficient way possible? Two to three months versus two to three years. I don't know about you, but I don't wanna spend two or three years entangled with my soon to be ex arguing over silly nonsense. I'd rather at least begin the healing process and move on and restart my life. Yeah. Marci Grossman (40:00) Absolutely. Absolutely. Well, for those of you who have not heard about mediation before, I hope you feel educated. This has been fascinating. Joe, do you have anything to share that maybe we didn't touch on? Joe Dillon (40:02) Yep. Yeah, thanks. I would say if you're going through divorce or you're contemplating divorce and you have children, your kids pick up on a lot more than you think. Parents, I really think underestimate the intellect as well as the sponginess of their children. when you think you're so clever that, my kids don't know something's wrong, of course they do. And so treat them with respect. Marci Grossman (40:39) you Joe Dillon (40:42) treat them with care and dignity, put them first, sit them down, don't let them find out you're getting a divorce when dad moves out, sit them down, tell them what's going on, of course age appropriately, and you'll be far better off as a detached family unit. That would be my one takeaway. Your kids know lot more than you think, so don't discount their feelings, don't discount their input, and truthfully be honest with them about what's going on. Marci Grossman (41:07) Thank you, Joe. This has been great. I really appreciate you taking the time to talk with us. And I love talking to a fellow numbers person Joe Dillon (41:10) Yeah. Thanks. numbers make the world go round. You can kick and scream all you want, but at the end of the day, do you really care who's right or wrong or how much money is in your bank? I'd choose the latter. Marci Grossman (41:26) Absolutely. Absolutely. To my listeners, I will be sharing a link to Joe's information in the show notes. Please check him out. His firm has a lot of interesting information, a lot of links, a lot of useful things if divorce might be in your future. And don't forget to subscribe, leave us a review, and stay tuned. I will see you next time. This has been MoneyMarci on Marci Talks, Money and Life. You got this. See ya.