Latest / SPLITUP / Understanding Your Financial Future After Divorce

Transcript

Understanding Your Financial Future After Divorce · SPLITUP

• 0:00
  Speaker: This podcast is for educational purposes only and is not legal or psychological advice.
• 0:05
  Speaker: Listening does not create a professional relationship with split up or any guests.
• 0:09
  Speaker: Launi and Robert are only licensed in the state of Arizona.
• 0:12
  Speaker: For legal or mental health concerns, please consult a licensed professional in your state.
• 0:16
  Speaker: Guest identities may be changed for privacy.
• 0:19
  Speaker: This material is intended for general informational and educational purposes only.
• 0:25
  Speaker: This should not be considered an individualized recommendation or personalized investment advice.
• 0:31
  Speaker: All expressions of opinion are subject to change without notice in reaction to shifting market, economic, or political conditions.
• 0:38
  Speaker: The comments, views, and opinions expressed are those of the speaker and do not necessarily represent the views of Bonima Wealth Management and Vigilaire Wealth Management.
• 0:49
  Speaker 1: Hi, Welcome.
• 0:50
  Speaker 1: I'm Launi Sheldon with Split Up, and today we have Raquel Kolsrud.
• 0:55
  Speaker 1: Hi, Raquel.
• 0:55
  Speaker 1: Hi, how are you?
• 0:57
  Speaker 1: I'm great, thank you.
• 0:58
  Speaker 1: So Raquel is the senior wealth advisor for Vigilari Wealth Management.
• 1:05
  Speaker 2: Yes.
• 1:05
  Speaker 1: She currently holds the designation Certified Financial Planner and Certified Financial Analyst, Divorce Financial Analyst.
• 1:13
  Speaker 1: She's completed the professional fiduciary certification program offered by the University of California.
• 1:19
  Speaker 1: And she's able to guide her clients through the various situations that they encounter throughout their lifetime, which is why we want her here, right?
• 1:27
  Speaker 1: We want to talk, we're going to be talking to her about divorce.
• 1:29
  Speaker 1: But before co-founding Vigilari Wealth Management in 2011, she worked for Charles Swab for 10 years.
• 1:35
  Speaker 1: And she worked for also the largest registered investment advisory firm in San Diego for two years.
• 1:41
  Speaker 1: So over that time, she worked with clients from all walks of life and enjoys helping people through the transitions of life, whether it be a job promotion, a baby divorce, death, or retirement.
• 1:52
  Speaker 1: Um, all of the events can be scary and come with uncertainty.
• 1:56
  Speaker 1: She does all she can to take the stress of managing those financial affairs throughout the highs and lows that life can bring.
• 2:04
  Speaker 1: And she wants her clients to live the life they want to live.
• 2:07
  Speaker 1: And that's why she's here today, because divorce is a very scary thing already.
• 2:14
  Speaker 1: And there's a lot of unknowns, especially when it comes to finances.
• 2:19
  Speaker 1: It seems like every decade or so there's economic issues that also cause problems with finances, whether it's the housing market or whatever.
• 2:28
  Speaker 1: And so she stays up to date on all of that.
• 2:30
  Speaker 1: And so we're gonna ask her a few questions.
• 2:32
  Speaker 1: And I honestly, I have about 15 questions for her that we're not gonna get to today.
• 2:37
  Speaker 1: So I'm gonna ask her to come back for sure because I I think they're so important.
• 2:42
  Speaker 1: I think this is you know, a lot of reasons people don't get divorced, I think, or stay married, is because they're so afraid of what's gonna happen financially.
• 2:52
  Speaker 1: They don't know how they're gonna make it, especially if one was a stay-at-home parent.
• 2:55
  Speaker 1: And so when someone's thinking about divorce, what does financial planning actually look like before they get divorced?
• 3:04
  Speaker 1: Like what can they look for?
• 3:05
  Speaker 2: Right.
• 3:06
  Speaker 2: That's actually a really great question.
• 3:08
  Speaker 2: Um, I think when somebody's think, if they're gonna be going through divorce and they think about, okay, financial planning.
• 3:15
  Speaker 2: I think when you're at the divorce stage, it really isn't at first about investing or long-term growth yet.
• 3:21
  Speaker 2: It's more about clarity, protection, and then knowing your options.
• 3:26
  Speaker 2: So, and what that kind of means is you need to understand what you own.
• 3:31
  Speaker 2: So, what are your actual assets?
• 3:33
  Speaker 2: Your home, your cars, do you have retirement accounts?
• 3:38
  Speaker 2: Um, five, two, nines for the for your for your kids, those types of things.
• 3:42
  Speaker 2: So, understanding first what you actually own, then understanding what you owe.
• 3:48
  Speaker 2: So, what are what debts and liabilities do you have?
• 3:52
  Speaker 2: How much of a mortgage do you actually have on your home?
• 3:54
  Speaker 2: Do you have car loans?
• 3:57
  Speaker 2: Um, do you have credit card debt?
• 3:58
  Speaker 2: Those types of things you may not know.
• 4:00
  Speaker 2: So, we first have to take a look at those things.
• 4:03
  Speaker 2: Most important, what do I have?
• 4:05
  Speaker 2: What do I owe?
• 4:06
  Speaker 2: And then know your options.
• 4:08
  Speaker 2: So you it really, I think financial planning in the beginning is just really about understanding and not rushing into anything to make a decision that's really going to hurt you later on.
• 4:19
  Speaker 2: So it helps.
• 4:21
  Speaker 2: And I think when you're going through divorce, it's extremely overwhelming, right?
• 4:24
  Speaker 2: It's an emotional.
• 4:25
  Speaker 2: So if we understand just understand the basics, it takes that overwhelming feeling and and lessens it.
• 4:32
  Speaker 2: So then you can actually get to a place of saying, okay, where do I go from here?
• 4:38
  Speaker 2: Here's what I have.
• 4:40
  Speaker 1: All right.
• 4:40
  Speaker 1: So I'm gonna give you an example because this is, I think, what probably some many, maybe a lot of people do.
• 4:47
  Speaker 1: I got divorced when I was how old was I?
• 4:52
  Speaker 1: I was 24, I think, 24, 25.
• 4:56
  Speaker 1: Um, and you became a single parent.
• 5:00
  Speaker 1: And in my mind, I was like, okay, I've got my house payment, I've got my car payment, I've got car insurance, I've got um groceries, electric, phone bill, the basics.
• 5:18
  Speaker 1: And I didn't go further than that.
• 5:19
  Speaker 1: Like I wasn't even thinking of all those other billions of things that you've got to buy.
• 5:24
  Speaker 1: Um the clothing for the kids, the the shoes.
• 5:28
  Speaker 1: Right, the shoes, the the lunches, the how do you kind of help someone create a realistic picture of what those expenses are?
• 5:39
  Speaker 2: So there's a really a couple ways to do it.
• 5:42
  Speaker 2: And what's great these days, right?
• 5:44
  Speaker 2: So you said you got divorced when you were 24.
• 5:46
  Speaker 2: I I was 25 when I got divorced.
• 5:48
  Speaker 2: So that's like over 25 years ago.
• 5:50
  Speaker 2: And all there wasn't as many resources out there at that time.
• 5:54
  Speaker 2: But now what's great is if you're trying to think of, okay, I need to build a budget, what do I think about?
• 6:00
  Speaker 2: There are there's so many resources for individuals to go to just online that you can pull off online from all different sources to actually get a budget or a guideline to help you to think about what I should be thinking about on an everyday basis, right?
• 6:16
  Speaker 2: Also, when you're going through a divorce and you're thinking about your budget, most of the time your divorce attorney, or maybe you're working with a divorce mediator, which is a is a great way to do and to be able to save money when you're going through the through a divorce, or if you already work with a financial planner or maybe even your CPA, they'll also guide you on the resources out there to help build your budget.
• 6:38
  Speaker 2: But to kind of build off a little bit about what what you said is I think a great way to do it at first if you're overwhelmed.
• 6:45
  Speaker 2: Like we all you talked about everybody knows the everyday things.
• 6:48
  Speaker 2: Okay, what are my utilities?
• 6:50
  Speaker 2: You know, what's my water bill?
• 6:51
  Speaker 2: What's my my cell phone bill?
• 6:54
  Speaker 2: Um, what's my cost for childcare?
• 6:56
  Speaker 2: Those types of things.
• 6:57
  Speaker 2: One great thing you can do is we all have these phones, right?
• 7:01
  Speaker 2: And on our phones, we have the notes section.
• 7:04
  Speaker 2: And what you can do every day for about a month is every time you spend money, just jot it down in your notes.
• 7:11
  Speaker 2: Went to Starbucks $4.95.
• 7:14
  Speaker 2: Uh, you know, picked up donuts for my child's uh classroom today for his birthday.
• 7:21
  Speaker 2: Just jot it, jot it down and don't analyze the cost and don't judge yourself either.
• 7:27
  Speaker 2: Just jot it down all every day.
• 7:31
  Speaker 2: And then at the end of the month, you can then go back and then you analyze it and say, okay, where am I really spending money at?
• 7:39
  Speaker 2: And then then take all those necessities as well, and then that will help you build a budget.
• 7:44
  Speaker 2: Because we don't think about every day like how what it costs just to go to get a coffee, or you might pick up, you might buy lunch every day.
• 7:52
  Speaker 2: I'm I'm guilty of that.
• 7:53
  Speaker 2: I love to go to my Kava and those types of things, and I'm picking up lunch, and at the end of the month, you're like, wow, I actually spend a lot more than I thought I did.
• 8:02
  Speaker 2: So if you can do that, and again, your phone's always with you, jot it down.
• 8:06
  Speaker 2: And most importantly, do not judge yourself, just jot it down, and then you're gonna analyze it at the end of the month.
• 8:12
  Speaker 2: Then you'll really know your true expenses.
• 8:15
  Speaker 1: I love that so much.
• 8:16
  Speaker 1: Don't judge yourself, be your own best friend.
• 8:18
  Speaker 1: I I try and say that throughout here.
• 8:20
  Speaker 1: Don't, don't judge what you're doing.
• 8:22
  Speaker 1: If you look back and you're like, okay, well, holy moly, I've spent $150 a month on coffees.
• 8:28
  Speaker 1: That's something that I can't afford now.
• 8:31
  Speaker 1: Let's look at what I can do to make my own coffees for $20 a month at home.
• 8:35
  Speaker 1: Yep.
• 8:36
  Speaker 1: Um, you know, we'll talk about that in split up on ways to to help you learn how to better handle some of your finances.
• 8:45
  Speaker 1: Um, but I I really like the the no the no judging.
• 8:50
  Speaker 2: That's you can't of course, you just have to really see what you're doing to understand it, right?
• 8:54
  Speaker 2: And if you judge yourself, you're gonna like really not know your real expenses if you're doing it along the way.
• 9:01
  Speaker 1: Um, you just have to another great that's a great point.
• 9:04
  Speaker 1: Sorry, I didn't mean to interrupt you, but that's a great point because if you're judging yourself, you might not do it that day because you're feeling guilty for it.
• 9:13
  Speaker 1: And then in reality, the next month you do it, right?
• 9:18
  Speaker 2: You do it anyways, and now your budget is off.
• 9:20
  Speaker 2: So just be realistic.
• 9:22
  Speaker 2: And then I always say, just be kind to yourself.
• 9:26
  Speaker 1: Yeah, I love that.
• 9:26
  Speaker 1: I'm I'm I'm big on being kind to ourselves.
• 9:29
  Speaker 1: I think that we have so much we've learned so much to be so hard on ourselves that going through a divorce and going through breakups, whether you're you were married or not, is already so difficult.
• 9:42
  Speaker 1: Um, that you don't want to just add this extra pressure on yourself.
• 9:46
  Speaker 2: No.
• 9:48
  Speaker 1: So another question, and this is one that that I I I think is so important in divorce.
• 9:56
  Speaker 1: And it's one that I, as a divorce attorney, have problems convincing my clients to go one way or the other.
• 10:03
  Speaker 1: And again, not judging, but just trying to be realistic.
• 10:06
  Speaker 1: Keeping the house.
• 10:09
  Speaker 1: I everyone seems to want to keep the house, and you're like, I mean, in some cases, it's a really great idea because you're not gonna get that kind of monthly payment again, and maybe you need it temporarily.
• 10:20
  Speaker 1: But but can you talk about I guess maybe what are the benefits of keeping the house and what are some problems of keeping in the house?
• 10:27
  Speaker 1: And then what are things that people really need to consider before deciding to keep the house?
• 10:33
  Speaker 2: So, as you mentioned, keeping the home is I think in a divorce, probably the most emotionally charged decision that people make, right?
• 10:42
  Speaker 2: It's their homestead.
• 10:44
  Speaker 2: And um they're very emotional about it.
• 10:48
  Speaker 2: They've spent time in it, they've decorated it, they've bought furniture, you know, you you become your home is like an attachment to you.
• 10:56
  Speaker 2: So what we first have to do is kind of dig into the emotions of it and not look at the numbers first, like really dig in and figure out the emotions of why you want to keep the home.
• 11:06
  Speaker 2: Um, usually one of the most important reasons, and I think it honestly does at times really make the most sense, is if you have children and you want to keep a stable environment for your children, right?
• 11:17
  Speaker 2: You want them to have their home, you want them to have their bedroom that they're comfortable in, they have their neighborhood, they're by their friends, their school district, things of that nature.
• 11:27
  Speaker 2: So that usually I think is kind of one of the biggest drivers in why somebody wants to keep their home.
• 11:34
  Speaker 2: But then you have to dig into a little bit more and say, okay, that all completely makes sense.
• 11:39
  Speaker 2: But now we have to then take and say, okay, in order to make this happen, we now have to make the the the not the fun side, the number side of it make sense.
• 11:49
  Speaker 2: So what we then have to do is look at, okay, can I afford the home today?
• 11:54
  Speaker 2: And if I can afford it, can I sustain it over numerous years?
• 11:59
  Speaker 2: So in order to do that, we have to really dig into if I'm gonna afford it today, what are the true costs of keeping the home?
• 12:08
  Speaker 2: And the first thing we always have to remind people is that your home, if you're living in it, isn't producing income for you.
• 12:14
  Speaker 2: So it's an asset that's ill liquid.
• 12:17
  Speaker 2: So you're not getting income back from it.
• 12:20
  Speaker 2: Um, secondly, then we have to look at okay, what are the costs of keeping the home?
• 12:26
  Speaker 2: So we always have the basics.
• 12:28
  Speaker 2: You know, we have to look at what is your mortgage, making sure you have a good uh you may you maybe you're in a 30-year fix, making sure it's not a short-term arm that's going to adjust on us.
• 12:38
  Speaker 2: And looking at that, we need to look at what are your property taxes, your homeowner's insurance, what are the you all the utilities.
• 12:46
  Speaker 2: Um, we can always dig into those, but just the overall utilities to maintain your home.
• 12:51
  Speaker 2: And then also just looking at the maintenance.
• 12:54
  Speaker 2: And maybe you have, you know, your yard work and somebody helps you with that, you have a pool, those types of things, and then small repairs.
• 13:01
  Speaker 2: Um, so we have to look at all those different things as a cost, but then we also have to look at, okay, those are those are the costs that we have on a monthly basis.
• 13:09
  Speaker 2: But over time, you're gonna have big future costs.
• 13:12
  Speaker 2: And people sometimes forget to think about these things when they're emotional and they're just thinking about the home.
• 13:18
  Speaker 2: Most people are gonna need to put a roof, a new roof on at some point in their in their house.
• 13:23
  Speaker 2: Um, you have to, especially in your HOA, if you haven't painted the exterior of your home in some time, you'll have to do that.
• 13:29
  Speaker 2: That's rarely less than $10,000.
• 13:32
  Speaker 2: And then depending on where you live, and I'll use Arizona as an example, everybody has HVAC problems at some time.
• 13:39
  Speaker 2: And maybe you have a home warranty, but the home warranty is not going to cover the entire expense of a new unit or a compressor or something of that nature.
• 13:47
  Speaker 2: So we have to also build in those big costs that you might have to actually incur sometime over the next five to 10 years, let's say.
• 13:56
  Speaker 2: So then what we do is we take all of that and we stress test it.
• 13:59
  Speaker 2: So we look at the income that a somebody's receiving based on the expenses of it to see if they can then sustain keeping the home over numerous amounts of years.
• 14:10
  Speaker 2: Or sometimes if they just want to stay in it for their lifetime, sometimes they just want to stay there till their children graduate.
• 14:16
  Speaker 2: So we have to run the numbers to see if that will make sense for them.
• 14:20
  Speaker 2: But also what we'll look at is yes, maybe you can sustain the home.
• 14:24
  Speaker 2: But if you're sustaining the home, are you also saving?
• 14:29
  Speaker 2: So if you can only sustain, but you can't save for your future or save just for like emergency funds, then it might not make sense.
• 14:38
  Speaker 2: So then we have to also review that as well.
• 14:43
  Speaker 1: Yeah, again, this can be just a very touchy subject.
• 14:46
  Speaker 1: And um most of the time, at least in Arizona, if you if the parties can't agree that one party's staying in the house, the court's gonna say sell it or the other party gets, you know, first right to buy or make it, you know, your best offer, that kind of thing.
• 15:03
  Speaker 1: Um so you may not get to anyway if you're gonna fight about it.
• 15:08
  Speaker 1: Um, but you know, it is a very difficult time that you're going through.
• 15:13
  Speaker 1: I'm not a fan of change.
• 15:14
  Speaker 1: I do not like change.
• 15:15
  Speaker 1: I I like things to stay the same.
• 15:18
  Speaker 1: I just recently moved and it was it was a lot.
• 15:22
  Speaker 1: It was so much that I I can understand it, and even my kids felt they don't live with me, they're all out of the house, but they all felt like they were very upset about it, you know, because it's their rooms that they had, even just because they knew they could come back to it.
• 15:39
  Speaker 1: Um, so yeah, it's been it's it's a hard thing, but it's also a new beginning.
• 15:46
  Speaker 1: I love my new house, it's you know, it's it's a new beginning.
• 15:49
  Speaker 1: So I think people need to consider that too.
• 15:52
  Speaker 1: Um, right away.
• 15:55
  Speaker 2: Yeah, you're already stressed, right?
• 15:57
  Speaker 2: Through a divorce.
• 15:58
  Speaker 2: And then what's another one of the most stressful things you can do throughout your lifetime?
• 16:02
  Speaker 2: Move.
• 16:03
  Speaker 1: Right.
• 16:03
  Speaker 1: Yeah, it's a lot of stressors at one time.
• 16:05
  Speaker 1: So I get it.
• 16:06
  Speaker 1: Are there are there ways that you could say, okay, well, let's plan it this way.
• 16:11
  Speaker 1: Let's plan to stay in it for five years till your kids are in college or whatever.
• 16:17
  Speaker 1: You can maintain it for this five years.
• 16:19
  Speaker 1: You've got the finances to do that.
• 16:20
  Speaker 1: Once you get out of it, you'll have about this much equity.
• 16:24
  Speaker 2: Right.
• 16:24
  Speaker 2: Absolutely.
• 16:25
  Speaker 2: We run all the different scenarios.
• 16:27
  Speaker 2: So when we're doing financial planning, we'll run Monte Carlo simulations and it'll run a thousand different scenarios through all different economic and market environments to see what actually is sustainable.
• 16:40
  Speaker 2: Um, so it does make sense to sometimes say keep it for five years and then then maybe you're building equity also along the way, right?
• 16:47
  Speaker 2: That you can then use when you sell it to purchase something new.
• 16:51
  Speaker 2: You maybe you downsize and then you're able to maybe put some money in, you know, in a retirement account and your brokerage accounts and then start saving from there.
• 17:01
  Speaker 2: Downsizing can be hard though these days, though, because you might sell and then you're having to buy something that's smaller that costs the same as your house.
• 17:08
  Speaker 2: So we we do look at all those things.
• 17:10
  Speaker 2: So I do know it's like when I say, Oh, you're gonna downsize and then you're gonna be able to pocket money, sometimes that's not always the case.
• 17:16
  Speaker 2: So we do have to look at all those things.
• 17:18
  Speaker 2: So life changes.
• 17:20
  Speaker 2: So when you're financial planning, it's not static.
• 17:22
  Speaker 2: We might plan today, and then you don't know where your life's gonna take you three to five years from now, even after a divorce.
• 17:29
  Speaker 2: So then you want to then you got to re-plan again, right?
• 17:32
  Speaker 2: You got to tweak your plan.
• 17:33
  Speaker 2: So always remember financial planning is never static.
• 17:36
  Speaker 2: And back when uh like 10, 15 years ago, we would do it.
• 17:40
  Speaker 2: We would do a financial plan and put it in a three-ring binder and then hand it to people, and then they would just walk away.
• 17:46
  Speaker 2: And most people will know this.
• 17:47
  Speaker 2: You would take that binder, you put it up on the bookshelf, you never looked at it again, right?
• 17:52
  Speaker 2: Right.
• 17:52
  Speaker 2: But now we do things, it's everything's more uh electronic, we're online and it's fluid.
• 17:58
  Speaker 2: So we can always change and change as your lifestyle changes, basically, and as your life changes.
• 18:05
  Speaker 1: So one one of the things that I ask, you know, as an attorney, when we when we uh hire a certified financial divorce planner, divorce financial planner, whatever, you know what I'm talking about.
• 18:18
  Speaker 1: Um, whenever we hire someone to help us get through the financial stuff, we also kind of have you go, okay, how much spousal maintenance will this person need and for how long?
• 18:31
  Speaker 1: Can you kind of help people determine that by looking at their finances?
• 18:36
  Speaker 2: Well, you can because your finances can only produce so much income, right?
• 18:40
  Speaker 2: So you can look at when somebody's looking at going through their settlement, first you have to look at where income sources are coming from, right?
• 18:49
  Speaker 2: So who keeps which income stream?
• 18:52
  Speaker 2: And then from there, if there is support is needed, is it temporary or is it some sort of permanent support?
• 19:00
  Speaker 2: Which I I feel like these days you're not seeing the permanent support as often as you used to.
• 19:06
  Speaker 2: It's more of a temporary for a number of years.
• 19:08
  Speaker 2: And then as we know, child support, as soon as you know, a child turns 18.
• 19:12
  Speaker 2: Um, but we we do look at those things.
• 19:15
  Speaker 2: And then from there, we have to look at also if you're the South that's maybe stayed home with the children, do you need to retrain or do you need time for your career rebuilding to get to a certain amount of income?
• 19:28
  Speaker 2: So we have to we have to look at all those things to see what really is realistic.
• 19:33
  Speaker 2: That's I think number one.
• 19:35
  Speaker 2: What is realistic to help them get to that?
• 19:37
  Speaker 1: Yeah, now interestingly, in other states, sometimes they go to 21 or through.
• 19:42
  Speaker 1: Oh, do you okay?
• 19:43
  Speaker 1: Yeah.
• 19:43
  Speaker 1: Yeah, interestingly.
• 19:44
  Speaker 1: And and also um now Arizona has our um our spousal maintenance rules, and they have a formula now that you you're in between two things.
• 19:56
  Speaker 1: So still it's difficult to get the forever, but they're a little more consistent with the amounts that you know, it's between 1500 and 2,500 for between three and eight years, that kind of thing.
• 20:09
  Speaker 1: And so you would be a great person to call in and say, hey, the kids, it's gonna take the kids six years to get out of school to get to become 18 or to go to college or whatever.
• 20:20
  Speaker 1: Let's get them money for this.
• 20:22
  Speaker 1: They need this much.
• 20:23
  Speaker 1: And by the way, they need retraining.
• 20:25
  Speaker 1: And by the end of you know, 10 years or whatever, they will have they will get their income up to such a spot.
• 20:32
  Speaker 1: So maybe they need this much for eight years, um, and then this much for the next two years or something.
• 20:39
  Speaker 1: Right.
• 20:40
  Speaker 2: They need a bridge, right?
• 20:42
  Speaker 1: To get them there.
• 20:43
  Speaker 1: Figure that out.
• 20:45
  Speaker 2: We help figure that out.
• 20:46
  Speaker 2: And then we also can look at if you're looking at part of a settlement, will this in a settlement are you getting any type of investments that could create some income for you?
• 20:54
  Speaker 2: So that not all of them will.
• 20:56
  Speaker 2: So let's say you're younger, maybe you're 35, 40, and then you're looking at splitting retirement accounts.
• 21:02
  Speaker 2: Well, those are good to be technically ill liquid assets for you right now.
• 21:06
  Speaker 2: Those are going to grow for the long term, but you're not, you can't tap into them right now for income.
• 21:11
  Speaker 2: So we we help look at all those different things and say, okay, when we're when we're splitting assets, what does make sense that, you know, how should you split them?
• 21:20
  Speaker 2: And if income is needed, okay, which assets are the ones that could produce income for for you as well.
• 21:27
  Speaker 2: So we we have to kind of build all those different things in.
• 21:30
  Speaker 2: Also, sometimes we'll look at too, depending on if one um spouse makes a lot more than the other one and there's children.
• 21:37
  Speaker 2: You can also build in saying, okay, the children are little, you have to also contribute to, let's say, a college savings account for them over their life or till they're 18.
• 21:48
  Speaker 2: So they'll you might have one parent save into a five two nine that will benefit the kids later on, and the other spouse doesn't have to save it into it and those types of things.
• 21:58
  Speaker 1: And those are things that you can help.
• 21:59
  Speaker 1: With individually after you've looked at all their facts.
• 22:02
  Speaker 2: Of course.
• 22:03
  Speaker 2: Every client, every person is unique, and you have to look at their situation and their financial assets at that time.
• 22:13
  Speaker 1: Now, this happens pretty regularly.
• 22:16
  Speaker 1: You know, we have somebody who may have lived a very lavish lifestyle, but possibly signed a prenup and now has not very much money.
• 22:25
  Speaker 1: Um, I mean, how do you break it to them?
• 22:29
  Speaker 1: How do you just you just I mean that can't be an easy conversation?
• 22:32
  Speaker 1: I I know it's not for me where I'm like, you know.
• 22:36
  Speaker 2: Yeah.
• 22:36
  Speaker 2: I mean, it's never gonna be an easy conversation, but it's reality, right?
• 22:40
  Speaker 2: And you just have to first meet somebody out their their emotions, right?
• 22:45
  Speaker 2: And see how they're feeling.
• 22:47
  Speaker 2: We talk through that and then say, okay, I understand that, but this is actually this is this is reality today.
• 22:55
  Speaker 2: And then walk them through it's a lot of education more than anything and helping them feel confident.
• 23:00
  Speaker 2: Here's what you have, and here's realistically how much you can spend on a monthly basis, and then build your lifestyle into that.
• 23:09
  Speaker 2: Now, over time that can change, right?
• 23:11
  Speaker 2: So we want to make sure that we stay realistic and very conservative.
• 23:16
  Speaker 2: And then as years go by, things may look better and better and better.
• 23:21
  Speaker 2: And then you can you can change the numbers a little bit.
• 23:23
  Speaker 2: You can change how much you're spending in different areas and maybe have the lifestyle that you had in the past.
• 23:29
  Speaker 2: But it's really important, I always tell people we're looking forward, we're not going backward.
• 23:33
  Speaker 2: So this is a this is we're gonna make some changes to get there.
• 23:37
  Speaker 2: And and we're there with them, you know, holding their hand all along the way.
• 23:40
  Speaker 2: But you're right, people don't want to hear that they can't afford this anymore.
• 23:44
  Speaker 2: And believe me, we've had those conversations.
• 23:46
  Speaker 2: I've had many conversations where I say, you can't be spending this much money.
• 23:50
  Speaker 2: And and there's no easy way to say it.
• 23:52
  Speaker 2: It's just that you cannot be spending this much money.
• 23:55
  Speaker 2: You will not have any money in the next five years.
• 23:58
  Speaker 2: So if you don't cut back, this is what will happen.
• 24:01
  Speaker 2: And it's just sometimes you have to have those hard conversations.
• 24:05
  Speaker 1: Yeah, and you know, five years might seem like, okay, well, I can do something in five years.
• 24:09
  Speaker 1: And and we do have a section in split up where we we talk about, you know, getting a second job, getting driving for Uber or driving for, you know, Instacart.
• 24:20
  Speaker 2: Instacart, I was good.
• 24:21
  Speaker 2: That's a big one that people do now.
• 24:23
  Speaker 1: Yeah.
• 24:23
  Speaker 1: And it's, I mean, I haven't done it.
• 24:26
  Speaker 1: I use it all the time, but I feel like that's one I could do, like with very little skill.
• 24:30
  Speaker 1: I know how to pick out an avocado.
• 24:32
  Speaker 2: Yeah.
• 24:33
  Speaker 1: Through my experience of grocery shopping, I'm probably pretty good at it.
• 24:37
  Speaker 1: Um, and so I think there's ways.
• 24:39
  Speaker 1: Do you ever talk to them about that?
• 24:41
  Speaker 1: Like you might have to get a second job.
• 24:45
  Speaker 2: Um, we have, yep.
• 24:46
  Speaker 2: Or hey, it's like you may you might need a little side hustle for a little bit, right?
• 24:50
  Speaker 2: As people like to call it.
• 24:51
  Speaker 2: But in order to sustain a lifestyle that you want, you have to create enough income to do that.
• 24:57
  Speaker 2: So this is how you're gonna have have to do that.
• 24:59
  Speaker 1: So yeah, and we know there's write-offs when you get those businesses, right?
• 25:03
  Speaker 2: So there's at least some car write-offs many times, and your gas, smile, those types of things.
• 25:10
  Speaker 2: So it's a tax benefit.
• 25:12
  Speaker 2: It can be a tax benefit for them.
• 25:14
  Speaker 2: I don't know that most people love to hear that, but it's you know, it's just an unfortunate thing of divorce sometimes.
• 25:20
  Speaker 2: It also just depends where they are in life when they're getting divorced, right?
• 25:23
  Speaker 2: Younger, sometimes that maybe comes more into play.
• 25:26
  Speaker 2: But if you're divorcing later in life, you don't that's not normally a conversation we have to have at that time.
• 25:33
  Speaker 1: Yeah, I think so, you know, split up really sort of our our customers are typically the ones with not a lot of money because they are using split up.
• 25:45
  Speaker 1: It's an app that they're not hiring an attorney.
• 25:46
  Speaker 1: So some people use the app with an attorney because it does walk you through psychologically how to what you're gonna be thinking of.
• 25:55
  Speaker 2: Right.
• 25:56
  Speaker 1: Um, but a lot of the people using the app just can't afford a lot of this, and that's why I think it's so important that they understand what they can and can't now afford.
• 26:05
  Speaker 1: And having someone like you on to kind of sort of drive home that point um is great.
• 26:13
  Speaker 1: And now do you do you charge to do that or do you charge to um to like I know you're I know like your you take care of their money, right?
• 26:26
  Speaker 1: And you help them do that kind of stuff.
• 26:28
  Speaker 1: What what else do you do?
• 26:30
  Speaker 2: We focus more on the investment management side of things.
• 26:32
  Speaker 2: So when we're we're helping clients, we really focus on helping them save and then build their assets so that they grow over time and that they're they're there for when they actually need to retire and then they can live off those assets.
• 26:46
  Speaker 2: So we're an asset-based manager.
• 26:49
  Speaker 2: So when we're helping clients, we look at it based on the assets that we're managing for them.
• 26:54
  Speaker 2: So it's usually an annual fee based on the assets that we're managing.
• 26:58
  Speaker 2: Now, we're very unique in that we don't we can look we every for us, every client is a is a different situation.
• 27:05
  Speaker 2: So we'll look at it that way because sometimes asset management may not come into play for our client, right?
• 27:11
  Speaker 2: That's going through divorce.
• 27:12
  Speaker 2: So honestly, many times I just help clients through it and I may just charge like a flat fee, just depending on what their financial situation is, or I may not even charge one.
• 27:24
  Speaker 2: Because really at the end of the day, we're just trying to help people and educate them.
• 27:29
  Speaker 2: And I think over time that goodwill come comes back to us.
• 27:34
  Speaker 2: And a lot of times I honestly spend a lot of time just helping, and it's usually more on the female side, helping educate them on what they have and what they can do.
• 27:46
  Speaker 1: Yeah, I think, you know, I think it's important to understand that, you know, I mean, as much as I think women are now as they're as this younger generation is coming up, they're making more money.
• 27:57
  Speaker 1: But I can tell you, like my generation, my friends, I I stayed home for a long time.
• 28:03
  Speaker 1: I enjoyed being a stay-at-home mom for a long time.
• 28:05
  Speaker 1: I like that.
• 28:06
  Speaker 1: Um, you know, working afterwards is was a different kind of thing.
• 28:13
  Speaker 1: It is women more often than men.
• 28:15
  Speaker 1: There are some men that are now staying home, but but I think the majority of time it is women who have made the choice to stay home or who have as a team with their partner decided to be able to do that.
• 28:25
  Speaker 1: Yeah, I mean they're a team, right?
• 28:27
  Speaker 2: You got you're a team.
• 28:28
  Speaker 2: That's that's why you do that.
• 28:30
  Speaker 2: You want somebody in the home, they're with the children, and then also you're managing the household.
• 28:37
  Speaker 1: So in in in in trying to determine this, is cash flow more important than like a total settlement amount?
• 28:46
  Speaker 1: Um, and if so, why?
• 28:49
  Speaker 2: I yes, I do believe that cash flow is more important than the overall settlement, the like getting a larger settlement, because cash flow helps you sustain your lifestyle, right?
• 29:01
  Speaker 2: On a daily and a monthly basis.
• 29:04
  Speaker 2: So you you have to have cash flow in order to live.
• 29:08
  Speaker 2: And there's just no way around it, right?
• 29:11
  Speaker 2: So if you think, well, the home is worth this much, and so I really want that because it makes my settlement look be better and bigger.
• 29:21
  Speaker 2: But the reality is your home is illiquid, it's not producing any income for you.
• 29:26
  Speaker 2: You need income to be able to keep up your home.
• 29:29
  Speaker 2: So cash flow is very important, especially in the beginning, because you have to realize what it costs to live, and then do I have enough income in to sustain that?
• 29:40
  Speaker 2: So it's extremely important.
• 29:43
  Speaker 1: Yeah, I've actually had clients against my recommendations say they'd prefer to just have their spouse, their soon-to-be ex-spouse, pay them a certain amount of month forever.
• 29:57
  Speaker 1: Um, and maybe just take less of like not the business.
• 30:01
  Speaker 1: And that's I don't recommend that for a lot of reasons.
• 30:07
  Speaker 1: And we had to really paper the back end of it to make sure that if that person died or didn't pay that there was a repercussion, they could get money another way.
• 30:16
  Speaker 1: Um but I do it the other person just said, no, I just want this amount of money every month, like I've had.
• 30:23
  Speaker 1: I want this house, this amount of money, everything paid, just like I've had, and I'll be happy.
• 30:28
  Speaker 1: And so that's what we did.
• 30:30
  Speaker 1: And so I I get that that can be one of those really great things.
• 30:33
  Speaker 1: And I know for a lot of people they don't have that option, but uh Yeah, that's such not a common option, though.
• 30:39
  Speaker 2: Right most of the time.
• 30:40
  Speaker 1: Right.
• 30:40
  Speaker 1: But but but it was in that case, she just wanted the cash flow.
• 30:45
  unknown: Yeah.
• 30:46
  Speaker 1: Um, so where are places besides spousal maintenance, are there other ways to get cash for like certain stocks or dividends or anything like that?
• 30:55
  Speaker 2: Yeah, we look we look at their investment portfolio at that time to see, okay, based on the investments that you have, how much income can be generated?
• 31:03
  Speaker 2: But even before we do that, we look at the investments, but it's very important to look at what type of accounts the investments are held in.
• 31:10
  Speaker 2: So you may have a large investment of portfolio, but it's in an IRA account that somebody maybe had a past employer, they've rolled it over into an IRA, it's grown for five years, and then they're like, well, this is our one asset.
• 31:26
  Speaker 2: Well, that IRA, if you're 45 years old, can't generate income for you, right?
• 31:31
  Speaker 2: Because, first of all, if you withdraw before you're eligible to, you're before you're 59 and a half, you're gonna have to 10% penalty.
• 31:40
  Speaker 2: And also you're gonna incur taxes on the withdrawals as well.
• 31:44
  Speaker 2: So you have to look at where are the assets held.
• 31:48
  Speaker 2: Now, if there is assets outside of retirement accounts, then we can look at, okay, what type how much do you have in an actual brokerage account?
• 31:56
  Speaker 2: And then from there, how can we build income?
• 31:59
  Speaker 2: And it's off things like interest from money markets, dividends from stocks.
• 32:05
  Speaker 2: Maybe you own bonds that pay coupons to you and an interest rate going forward.
• 32:10
  Speaker 2: And then we build and look and see what's really realistic and what type of income can be generated.
• 32:17
  Speaker 2: But we also have to look at, okay, yeah, income, but then how how much risk do you want to take as well?
• 32:23
  Speaker 2: Because we also you need to be able to keep up with inflation and you need the assets to grow.
• 32:27
  Speaker 2: So there's a lot of things that kind of go into it.
• 32:30
  Speaker 2: It's just not that simple of like, okay, I have $100,000 and I want to get 4%.
• 32:34
  Speaker 2: And it doesn't always work that way.
• 32:37
  Speaker 2: So we really have to educate, learn the risk tolerance of somebody, and then build in what makes the most sense.
• 32:44
  Speaker 2: And there's all kinds of vehicles that you can use to create income.
• 32:48
  Speaker 1: So yeah, and and you can go over those with people, right?
• 32:53
  Speaker 2: Oh, absolutely.
• 32:54
  Speaker 2: We do we go through every every option there is.
• 32:57
  Speaker 2: We have uh, you know, we have a tool belt and we have every tool out there.
• 33:01
  Speaker 2: That's what's, you know, I don't, you know, as being an independent advisor, I don't work for a big corporation where I only have to recommend what's available at the firm.
• 33:10
  Speaker 2: Being an independent investment advisor allows us to have every tool in the toolbox.
• 33:15
  Speaker 2: And so depending on what your situation is, we go take that tool out and that's what we use.
• 33:19
  Speaker 2: So we're not we're not tied to any one thing.
• 33:24
  Speaker 1: Well, I I appreciate all this information.
• 33:26
  Speaker 1: I'm sure our listeners appreciate all this information because I think it's really helpful.
• 33:30
  Speaker 1: And um, we will, by the way, be attaching her website uh link in our in our uh down below.
• 33:41
  Speaker 1: Down below, it's gonna be there.
• 33:42
  Speaker 1: Um so go ahead and click on that if you have any more questions for her or want to reach out.
• 33:47
  Speaker 1: Is there anything else that you can kind of say or advice that you can give our listeners?
• 33:53
  Speaker 2: I think most importantly, going through divorce is probably one of the most emotional things that you'll ever go through, right?
• 34:00
  Speaker 2: And at the end of the day, just take a step back.
• 34:03
  Speaker 2: And I know this is gonna sound maybe a little bit cheesy, but take a deep breath.
• 34:07
  Speaker 2: Maybe you need to take 10 deep breaths, but just take a deep breath and remember that you're not alone.
• 34:13
  Speaker 2: There's thousands of people that go through divorce every single day.
• 34:17
  Speaker 2: And even though you, each person is unique, there's a lot of similarities when it comes to going through divorce, and there's so many resources out there available to you.
• 34:27
  Speaker 2: So don't hold it all in.
• 34:29
  Speaker 2: Talk to your family, your friends, um, trusted professionals, and then get referrals as well, because there's so many resources out there for you that you'll you can there's so many ways to be guided through this process and not make it as stressful as it needs to be.
• 34:46
  Speaker 2: And just educating yourself is the most important thing that you can do.
• 34:50
  Speaker 1: Yeah, I I wholeheartedly agree.
• 34:51
  Speaker 1: And that's why we started split up and that's why we do this.
• 34:54
  Speaker 1: We can give people some information.
• 34:56
  Speaker 1: So check out the rest of our uh podcast too and and our Facebook site, and you can kind of get some information there.
• 35:03
  Speaker 1: And then, of course, you can download the app for free and upgrade if you need more.
• 35:07
  Speaker 1: So well, thank you so much.
• 35:09
  Speaker 1: I appreciate you being here.
• 35:11
  Speaker 2: Well, thanks for having me.
• 35:12
  Speaker 2: It's been really fun.