Are You the CEO of Your Divorce?

[00:00:04] Welcome to The D Shift Podcast, where we provide inspiration, motivation, and education to help you transition from the challenges of divorce to discover the freedom and ability to live life on your own terms. Are you ready? Let's get this shift started. Hello and welcome to this episode of The D Shift Podcast.

[00:00:27] And today we are going to talk about money and money mistakes and all kinds of things that people quite often make in divorce when they're just at a point where it's hard to think about things. I'm just going to say it that way. So I have the perfect guest expert on to talk to us today. Sue Plish is a CFP, CDFA, and she is the founder of Resilient Divorce Solutions, LLC.

[00:00:57] And she works with both individuals and couples who are looking to create divorce settlements that really work in everybody's best interest. Although she does also work with individuals who are maybe really struggling to get information from their ex and to find out that kind of information. So she really, really covers the whole spectrum.

[00:01:22] But I spoke to Sue a couple of times and I know one of the things she's able to do is make really complex financial issues very simple. So it's easy to understand, but you still make sure you have all the information you need to make the best decisions. So Sue, thank you for spending your time with us for a while today. Thank you, Mardi. I really appreciate you having me on.

[00:01:47] Well, and like I said, we've talked before and I just find that your insight and your information that you share is just really helpful. As with every professional we have, honey, I just want to throw this out. Sue and I are talking about general information and education. We're not talking about any specific recommendations for any one person that may be listening. And we are not giving financial advice or any kind of legal advice on this podcast.

[00:02:16] And Sue has something that she's going to talk to us about the end, though. If you are looking to work with her, there is an opportunity. So with all that being said, how did you get into this whole area of finances, divorce and really helping people make good decisions about their money? Oh, that's a great question, Marty. So I've always been a numbers person. And so I studied mathematics.

[00:02:43] I taught high school and college math for a long time. And then I was an at-home parent. And suddenly my husband came out as a member of the LGBTQIA community, which was a huge surprise for me at the time. And I had always dreamed about going into finances after helping my mom find a reputable financial planner. She had become a widow so young. And so I helped her do that.

[00:03:12] And I thought, wow, someday I want to be a CFP. And so, you know, once my husband came out to me, I thought, huh, this would be the time to go back to school. Yeah. And get that. Now, you are just for people that may be brand new to this. Can you just explain to us what is a CFP and what is a CDFA? Because you have both of those professional designations. Oh, excellent. Thank you. That's a great question.

[00:03:41] So CFP stands for Certified Financial Planner. So that requires, you know, six to eight classes at a master's level. It requires a major exam and two to three years of work experience. So this would allow someone to do comprehensive financial planning, retirement, college planning, all those things. CDFA is specifically related to divorce.

[00:04:08] So it means Certified Divorce Financial Analyst. And this is a designation that's considered an advanced designation. So you have to have an underlying CFP or CPA. So like a tax designation. Or you could be an attorney, a JD. And then you can get the CDFA on top of that. Again, with extra coursework and an extra exam. Yeah.

[00:04:34] And there's not too many attorneys, although I have run into a few lately that have both their, you know, their bar license as well as the CDFA designation. Which that's got to be a lot of extra courses in keeping track because I know the tax code alone can be overwhelming to try to navigate through to understand this. So. Yeah. I feel like things are always changing. So you've got to keep up. Yeah.

[00:05:02] And Sue, I know we had talked a little bit before. And this whole idea of so many mistakes in the divorce are made not because somebody's trying to hurt somebody or sneak something by somebody. In the vast majority of divorces where this high conflict issue is not present, a lot of the financial mistakes are just nobody knew. Like it looked like a good idea at the time kind of deal.

[00:05:31] Nobody was trying to mess anybody over. But these mistakes can have really long-term financial costs to one side or sometimes to both people involved in the divorce. So can you just talk a little bit? I'm going to let you take this any way you want to go with it, Sue. What do you see are some of those early or even later in the process mistakes that end up being really financial costs to everybody? Sure. Sure. Yeah.

[00:06:01] That's another great question. I think one mistake I see is just assuming that divorce means a courtroom battle. So sometimes in marriage, there's a lot of coercion. There's control. There's control. Maybe, and you know, this is outside my area of expertise, but you suspect one person might have a diagnosable personality disorder or something like that.

[00:06:25] In that case, you know, if they're unable to be reasonable, sure, you know, attorneys in the courtroom might be in your future. But for a lot of people, you know, if it's possible to be amicable and just fully disclose that financial information, you can actually get through divorce a lot more quickly and easily with mediation. Yeah.

[00:06:50] And I think they said, I was just at a mediation conference not too long ago, and I think they were talking about now about 87% of marriages are settled outside of litigation. So that's by far the vast majority of marriages, although you never hear about them, right? Because they don't make any splashy headlines or whatever. Exactly. Yeah. I mean, the courtroom is very traumatic.

[00:07:16] So on television or, you know, anywhere else, you're going to see that portrayed, but it doesn't have to be that way. I think another costly mistake can be just not understanding sort of, you know, what's the right place to do what different things. So what is your attorney good for? So one analogy I like to have is imagine that you wanted a renovation in your house.

[00:07:41] And so you went to the department store and you bought yourself, you know, the big box store and bought a hammer and you brought the hammer home. You're like, okay, I have a hammer. Now my, you know, sunroom and my renovation, whatever it is on my house will be somehow completed. And a lot of people think that an attorney is like that for a divorce. So some attorneys will take the lead and help that whole process move forward.

[00:08:11] But other times it's just like with that hammer, you need to be actually picking up the hammer, hammering in nails, or maybe hire somebody to use, you know, use the hammer for you. If you want that renovation to happen in the same way with an attorney, an attorney is a useful tool in the divorce process. But they can't necessarily, you know, bring it all the way forward. I like to say that most people need to be the CEO of their own divorce.

[00:08:40] And so it can be costly when you try to use your attorney as a therapist. So, you know, connecting with someone like you, Marty, would be a great, you know, a better way, you know, to process some of those emotions or to figure out how to move forward. And the second thing I see is that sometimes people expect their attorney to be a financial expert. So certainly some attorneys do have that financial training, a financial background. Maybe it's taxes.

[00:09:08] Maybe they are also a CDFA. But other attorneys, they just literally don't have that training. Right. And so then, unfortunately, if they aren't, you know, fully immersed in the finances, what can happen is what looks like an equal split, you know, 50-50 on paper might not actually be an equal split. Right.

[00:09:32] And I think it's important to know, and this is absolutely nothing against attorneys, but in forever, law firms have relied on what they call boilerplate language, boilerplate language, sorry. So their forms, their pre-written out forms with some of the legally stuff, and they just kind of fill in the blanks when they're talking to you. And then the paralegal types it up, and then that's the divorce settlement sometimes. And same with mediators.

[00:09:59] And so it can become, if you don't know specifically to say, or you don't really read the fine print on it, you may miss some of that boilerplate language that maybe looks okay for, you know, Bob and Jenny getting divorced, but they may not be good for Becky and Mark getting divorced. Like, you've got to be really careful, and that's where having a financial professional to take a look at that really helps. Oh, for sure. For sure.

[00:10:28] Because I think with the right, a lot of times, like with my eyes on the finances, what I like to do is I like to leave both members of the couple without consumer debt if possible. So my job is to figure out where can we free up funds? You know, if debt is a problem, where can we free up funds so that both people can move forward? First of all, they have to support their households on their own.

[00:10:51] And so that means that the same amount of money has to stretch further because you have two mortgages or two rent payments. You have two utility bills and so two grocery bills. And so if there's a way that we can pull money out from somewhere, you know, hopefully with a low tax or no tax consequence, eliminate that consumer debt. It helps both people just, you know, be a little bit more stable financially moving forward.

[00:11:18] Another thing that's important is to not, you know, let that joint debt linger. So sometimes, you know, one person in the couple might be very responsible with money, but they might be worried that their soon to be ex is not as responsible with money. And so if you have a joint debt, your divorce decree could say, you know, oh, my former spouse is supposed to pay that credit score takes a hit. Yeah, yeah.

[00:11:46] And so can you just so I see this on a lot of divorce decrees, not as much as I used to see it, but where where one spouse has some kind of ongoing financial obligation to the other spouse. Either they're supposed to pay, you know, the car payments or whatever. And then or they're supposed to carry a life insurance policy that's supposed to be that buffer. Right. And then all of a sudden, yeah, they make the initial payment.

[00:12:15] They take out the policy and then the next month they stop making those payments on that life insurance policy. So I really like the idea of what you're talking about, of getting rid of consumer debt and then making sure like I always try to try to tell people if you're taking the asset, try to take the debt with it. That way, at least you're in control and you can be assured the payments are being made and then try to negotiate maybe a smaller amount of something else and get the lump sum so you can pay off that debt.

[00:12:43] Like there's you can be really creative on these divorce decrees. You don't have to be you know, you don't have to just follow that boilerplate. And when you know your options because you worked with a CDFA, you can go into negotiations and know what to ask for and, you know, say, hey, here's a proposal how we could do this. Yeah, excellent. I mean, that's really what it's all about. And sometimes people don't realize that their name is still on the loan.

[00:13:13] That predator can come after them for that amount, even if your divorce decreases the other, you know, your former spouse is supposed to pay it. So it's really important to really dot your I's, cross your T's and do what you can to make sure you're fully disentangled. Your financial lives are fully separated. Now, Sue, I'm going to ask you a question that we did not talk about ahead of time. So I might be kind of blindsiding you on this one. So feel free to say, nope, I'm not going to answer that one.

[00:13:42] I have a lot of clients that are very concerned that their their partner has paid, managed the taxes for many years and that they may have been paying, playing fast and loose with what they were actually claiming as income and what they were actually deducting, especially if there's a family business involved or some some other kind of way to potentially skirt money around to avoid paying taxes on it. What is your tax?

[00:14:10] And I'm not asking you from a legal perspective, but just from kind of from your under experience with this. What what is your legal or what is the risk of even after your divorce, some kind of tax issue coming back on you? And is there any way to account for that in the financials in a divorce? Yeah, that's a really hard one, Marty. I have seen that where, you know, sometimes one spouse was doing something a little bit under the table.

[00:14:41] Maybe they weren't reporting things. And then you think, hey, I wasn't involved in this. I didn't consent. What am I supposed to do? So there's something called injured spouse and there's also something called innocent spouse relief. And so they're a little bit different. But you can petition to the IRS, you know, in the event that there's a situation where you owe a bunch of back taxes or penalties. There are sometimes ways to get out of that. Right.

[00:15:10] And, you know, make your case before the IRS that, hey, this had nothing to do with me. Right. I also will say sometimes if you are concerned that your spouse is doing something, you know, underhanded or not particularly legal, you can always do the married filing separate status. Or if you have kids on your tax return, sometimes you can qualify as head of households.

[00:15:34] But if you don't file a joint return, that really separates your liability. They're liable for their stuff. You're liable for your piece. Okay. And so that's another option. That's it. Yeah. Yeah. I didn't know that. So that's really interesting. Yeah. Yeah. And I've seen that, too, where I had a client and her soon-to-be ex, unfortunately, had a gambling problem.

[00:16:02] So he pulled money out of the kids' 529 college savings plans. There was a tax penalty for that. Then he pulled money out of his retirement plan, his 401k. He was not the right age. So there's a penalty for that. And, you know, she said, what should I do? I said, do not file a joint return this year. You know, it's really important. Whatever pressure he puts on you, it's important. Do not sign any joint returns.

[00:16:29] File your own return so that he's responsible for his stuff and you're responsible for your piece. And you can do that even before you're legally divorced then? Yes. Okay. Absolutely. Okay. Wonderful. Wonderful. So thank you for going down that little rabbit hole with me. But I hear this one more and more often, especially because I work with a lot of clients who have, you know, maybe them or maybe their spouse or maybe they're both involved with the family business.

[00:16:57] Or, you know, they know that. I had an interesting one the other day where the particular person I was working with was aware that their spouse was doing a lot of day trading and was pretty sure stuff was not being corrected. Exactly. I think that they were exactly accounted for during, you know, in that kind of side hustle thing. And people are worried about crypto stuff and how that can be hidden and all kinds of things. So I appreciate you saying that. Thank you. Yeah. Yeah.

[00:17:26] I think if you're worried to the point where you're getting, you know, you're getting divorced, I wouldn't worry about hurting their feelings. I think your financial stability is more important to say. I think I'm going to file my own return this year. Yeah. Great idea. Anything else? And we're almost out of time. I cannot believe how fast these conversations go.

[00:17:47] Is there anything that you see that's like a really what you would say is one of those really common mistakes that people make other than the ones we've already talked about? Yeah. Yeah. I would say for a lot of times with child support and maintenance, I see it's easy. So basically for child support, every state has a calculator.

[00:18:12] For maintenance, some states have calculators, some don't, but there's still sort of general principles involved. And a lot of times what I've seen is where an attorney or someone else will plug numbers into a calculator. It could even be your soon to be ex has plugged numbers into a calculator. And, you know, they say, well, I use this calculator and here's the number I came up with.

[00:18:36] And so a lot of times people just think, oh, you know, a calculator was used. Things were plugged in for sure. You know, I just have to accept this number. And what I found over and over again is just this principle of garbage in garbage out. You can put whatever you want into a calculator and get a number and say, oh, this is it. I only have to pay you $300 a month in child support. That doesn't make it correct. Right.

[00:19:03] And so as a CDFA, you know, one of the things I do is just very deeply and carefully look at somebody's income. You know, is there rental properties, businesses? Do they get bonuses? Are there stock options? RSUs? I mean, whatever. Put in, make sure we have a full picture of their income before we start running child support and maintenance calculations.

[00:19:24] And that's something I've seen even attorneys, I'm sure, who mean very well, really fall short in that area because they aren't considering the full compensation. Yeah, that's a really, that's a, that's another really good one. And along those lines, what happens if us, I'm going to take us down another little rabbit hole now.

[00:19:47] What happens if a spouse is choosing to either under work or completely quits work with no medical reason or no, you know, it's not like a disability.

[00:20:04] It's not, they just don't want to pay and they think that they can either lower their income level so that they can drop their, their maintenance and their spousal or their spousal maintenance or, and sometimes even child support. And then they're just kind of playing, they're playing the game. What happens with that? Or they won't give you the numbers to actually make a clear assessment on what their, their income is. Yeah. Oh, those are tough problems.

[00:20:34] So what I have seen in a lot of jurisdictions is that if you're not working and it's considered like a voluntary thing, um, that they will look at what was your last sell, you know, salary when you were fully employed, um, working that full-time job. What were you earning for that? And that, that, that number can be used in the calculator.

[00:20:57] Um, and also a lot of States have rules that basically if one person's income changes by, you know, 20% or more that you can recalculate and refigure that child support. Oftentimes maintenance doesn't work that way, but child support, you can recalculate. Um, and if someone won't give you the numbers, now that is the hardest situation. So I often tell clients like, I can't compel anyone to give up documents.

[00:21:23] I can say, but I can tell you right now that we don't have a clear picture of your, you know, former soon to be former spouse's income. And we need a clear picture and here are the documents I need. And, you know, I will sort of draft emails, you know, either to the client's attorney, if they want to communicate directly or just to the client to send to their attorney.

[00:21:46] And the attorney can subpoena those documents, um, because they should be, there should be full disclosure and the courts have mechanisms for that, that to be disclosed. Oftentimes you need, uh, tax returns, W-2s, um, sometimes all sorts of business documents, but whatever, um, you know, a CDFA could tell you what kinds of things are needed to get a clear picture of that income.

[00:22:10] Right. And this is, these are all things that I, again, even, you know, it's easy to, to just forget. Oh, I forgot, you know, yes, we've got that rental property, but we don't, you know, maybe we only rented out a couple of times a year and maybe we only make a few thousand dollars. That's still income. And if, if you're not going to get a part that, you know, that needs to be calculated and considered in, in all aspects of, of the divorce settlement.

[00:22:38] Exactly. Exactly. There's sort of a lot of pieces we just don't think of because they're just a normal part of our everyday life. And yet, you know, they do contribute to income. They absolutely. Yeah. And this is where, this is where consulting with somebody who can, who can take you through this and can understand your personalized financial issues is so much better than, um, you know, yes, we've all, we can all use chat GPT.

[00:23:04] What documents do I need for my divorce? But it's just going to spit you out a list of everything, which may or may not be relevant to you. And it's, it's not going to be customized for your jurisdiction, your state, your location, whatever it may be. Sue, we are out, we're out of time. I can't, well, like I say, I cannot believe how fast these conversations go, but I do want to spend a little bit more time. You have very generously offered a gift for people who are listening in today. Can you tell us a little bit more about that, please?

[00:23:33] Sure. Yeah. If you go to my website, um, it's resilient divorce solutions.com and you can, anyone can sign up for a free 30 minute consult. Um, and so you can use the calendar, pick a time that's good for you. And I also have a free download, which is 10, uh, financial mistakes to avoid in divorce.

[00:23:57] And I think that's so helpful because we didn't get through all 10, but we hit a few of the highlights and I took us a little off track there a couple of times. So I apologize for that. But, um, I, you know, these are questions I like to, when I have experts like you on the podcast, I like to ask questions that I hear from my clients all the time.

[00:24:15] Because, uh, as we've talked about before, I don't do financial stuff with my clients. I can help them find the documents, but I need somebody like you to get, you know, to share with me what, okay, what do they need to find? And then once we have the information from a CDFA, um, now you, as a CFP, you can also work with people post divorce. Is that correct? Is that what you do? Do you do any work with people post divorce?

[00:24:40] Yes. So, um, I have done that at my former firm, but now with my own practice, I don't, but actually in the next month I'm getting right back into that. So I'm onboarding, um, with, with another firm so I can do a comprehensive financial planning right now. I'm not registered the right way as my resilient divorce solutions firm, but yes, I have all the knowledge. And like I said, within about a month or two at the most, uh, I'll be offering those services as well in case people want to work together after divorce.

[00:25:09] Cause sometimes the divorce is just, you know, sort of like the halfway point. Yeah. Yeah. Well, and then you've got, you've got to make the, yeah, you've got to make the informed decisions. Okay. Now if I get a lump sum, if I get some, you know, if I get some income that I could maybe invest somewhere, what do I do with it? How do I make the most of that money? So yeah. So important. Yes, exactly. Sue, I know you gave this to us before, but I'm going to ask you two things.

[00:25:36] Number one, what do you think is like one piece of advice you'd like to give anybody going through divorce? Oh yeah. I mean, this is more from the heart instead of from finances. It's just that it'll get better. I remember I had someone say to me, I, that, that she saw a bright future for me and I was at a really low point and I, I couldn't see it for myself. So, but she was holding out that hope and vision for me.

[00:26:06] So I want to hold out that hope and vision for all your listeners right now. Like things will get better. Not to minimize the hardness or difficulty of today, but things often do get better and, and good and beautiful things can come back into your life. What a perfect way to wrap this up. I love those positive, optimistic messages at the end. And Sue, one more time, can you give us your website, how people can reach out to talk to you and I'll make sure that everything gets in the show notes as well.

[00:26:35] Excellent. Yeah. My website is resilient divorce solutions. So it's plural.com. Perfect. And again, that'll be in the show notes. So definitely take Sue up on her offer. She is the, the, the kindest person to speak to about this. Absolutely no judgment, whatever your financial situation may be. And Sue, thank you for being here today and giving of your time and your expertise. Oh, thank you, Marty. It's been my pleasure.

[00:27:04] And it's been my pleasure as well, Sue, as always to speak with you. And thank you everybody for listening in to this episode of the D-Shift and don't forget to tune in to the next one. Thanks for listening and supporting the D-Shift podcast. If you would like to attend live trainings by our amazing guests and have a chance to ask questions and get answers from our experts, join the D-Shift crew.

[00:27:29] For more details and to sign up, head on over to www.divorcecoachforwomen and click on the podcast page.