The Laws of your Money with Ann-Margaret Episode 26

Episode Transcript

Speaker 1 (00:00):
The following is a paid podcast. iHeartRadio's hosting of this
podcast constitutes neither an endorsement of the products offered or
the ideas expressed. The following program is sponsored by New
York Priority Medical Care. Now it's time for the Laws
of Your Money, a weekly call in show with legal
tips to help you protect your money. Here's your host

(00:23):
and Margaret Caroza.

Speaker 2 (00:25):
Hello, and welcome to the Laws of your Money. This
is a program dedicated to protecting you from legal and
financial mayhem when it comes to personal finance. I believe
that the single most important element is legal protection, because

(00:48):
what does it matter how diligently I save or how
brilliantly I invest if there's a greater than forty percent
chance of losing assets to a long term illness and
expensive divorce taxes. This can be capital gains taxes as

(01:09):
state taxes, not to mention ordinary lawsuits. We all know
that we're living in a very litigious society, but it
comes as a surprise to a lot of people, an
unwelcome surprise at that, that we are far more likely

(01:30):
to be involved in a legal dust up with a
former loved one than with a stranger. So We're going
to dive into all of the ways that we can
protect ourselves and our assets legally. I am and Margaret Carosa.

(01:50):
I'm an asset protection attorney, and I am joined today
by my esteemed guest co host and CIS attorney Lori Miles.
Welcome to the program, Laurie. Thanks Anne, it's great to
be here. Welcome back to the program. I should say
you've been on the show before. So today is June eighth,

(02:13):
and we are in the beginning of wedding season. And
you know, I talk about in the book Love and
Money that it's a disappointing statistic to me that the
average cost of a wedding in the United States is

(02:35):
over can you guess, Lori fifteen thousand? Yeah, it is
over fifteen It is over twenty four thousand dollars. And
I just think, you know, you're a young couple, you're
starting your lives together. Who wants to be in a
mountain of debt?

Speaker 3 (02:57):
You know, for.

Speaker 2 (02:58):
People who can afford it, terrific. You know, I love
going to and over the top wedding with a band
and an open bar. But for the folks who cannot
afford it, I really hope that more and more people rethink,
you know, this first step in their lives together. Now,

(03:21):
I think one thing that you and I have in common, Laurie,
is that we both had maybe unconventional wedding celebrations and
we were able to save some money. So you know,
what was something that you did that you don't necessarily
see at other weddings. Well, I would say the first

(03:43):
thing I learned from you, and that's there's no reason
to invest in a wedding planner. If you're an organized
person and you have a spreadsheet, you can absolutely manage
the details yourself.

Speaker 3 (03:54):
Well I would.

Speaker 2 (03:58):
I wonder is there anyone out there who is a
wedding planner or do you know a wedding planner who
can reach out to me through Instagram at my lawyer
and I wonder if a wedding planner is not able
to negotiate discounts because of their relationships with vendors. You know,

(04:21):
But in any event, I didn't have a wedding planner.
You didn't have a wedding planner. You had a fun wedding.
It was over the top in terms of creativity. Your
wedding cake was what it was, a rice Krispy Treat
wedding cake, Rice Krispy Treat wedding cake.

Speaker 3 (04:40):
It was terrific.

Speaker 2 (04:41):
And the centerpieces they weren't flowers, they.

Speaker 3 (04:45):
Were they were lemons.

Speaker 2 (04:47):
And that was another aspect of our saving money before
we decided to forego flowers and centerpieces and flowers for
the bridesmaids even by having lemons in a vase is
the centerpiece for each table, and then each of our
bridesmaids had a bucket with artificial flowers that cost us about.

Speaker 3 (05:07):
I was terrific.

Speaker 2 (05:09):
Now one of the things that I did which was
very unconventional, and I must admit, many years later, I
do have mixed feelings about this cost saving measure, and
people who know me know that I am sometimes a
little bit of a cheapskate. But I insisted that we
not hire a professional photographer, and I thought it would

(05:33):
be absolutely brilliant to throw some disposable cameras.

Speaker 3 (05:38):
On every table.

Speaker 2 (05:41):
What I didn't factor into this brilliant analysis is that
many hours into the party, with lots of liquor having
been consumed, that when we developed the pictures, I have
close to a dozen pictures of a wedding guests private parts,

(06:01):
So I don't know where I was during the ceremony
where people were taking the disposable camera. And if you
have any information on this, Lord, I do not. I
do not, but that sounds like a great bonus wedding gift. Well,
we did save the pictures. I don't know why. They're
certainly not in the wedding album. I just at some

(06:22):
point I wish people would confess to having done that.
But anyway, financial issues, ironically are one of the top
two causes for divorce. So why do we want to
start our married life under a mountain of debt? Right

(06:47):
coming home from the honeymoon to a bunch of credit
card bills in the mailbox.

Speaker 3 (06:54):
It's just not good.

Speaker 2 (06:55):
So, you know, they say, when money is a problem,
every I think is a problem, and it doesn't take
long before the financial stress hurts the marriage and it
is the leading.

Speaker 3 (07:10):
Cause of all divorce.

Speaker 2 (07:13):
Joining the program to weigh in on this and other
issues regarding a divorce is a longtime friend and colleague
of mine who I have had occasion to refer friends
and refer clients who are embarking upon a divorce. Welcome

(07:36):
to the program, Dana Friedman. Thank you, very much, jam
Thank you so much for being with us. Now I'm
going to put you on the spot a little bit,
and I don't want you to give me a lawyer answer.
So this is the sixty four thousand dollars question, or
is it?

Speaker 4 (07:55):
I'll tell you right now, I did not have a
wedding clan.

Speaker 2 (08:01):
What is someone looking at in terms of legal fees
as they divorce?

Speaker 4 (08:09):
Well, that's a question that I really can't answer it
in its entirety, and I'll explain why. There are multiple
facets that make up any divorce case, the first of
which being is it going to be a contested divorce
or an uncontested divorce? Contested, of course, means that the
two parties can't agree on either one or multiple facets,

(08:31):
and that requires judicial intervention, going to a court, having
to judge evaluate the case, both sides giving testimony, and
that's dependent upon time how long it takes. But there
is a solution to that. They know. I'm giving multiple
answers to one question. Divorce mediation can limit the amounts

(08:54):
of that expense and the amount of time incurred. Of course,
the flip side, of course, is if a party the
parties agree on all of the different facets of the divorce.
A stipulation can be drafted in agreement with both parties
signed as to spousal support, child support, custody, visitation, whatever
the different issues are. Once that's drafted, then it's just

(09:17):
a matter of drafting the uncontested divorce documentation for the
court submission. That's significantly cheaper, probably somewhere in the neighborhood,
ending upon the different points of it, you're looking somewhere
in the neighborhood of thirty five hundred dollars.

Speaker 3 (09:34):
Ish, could Dana, let me ask you this.

Speaker 2 (09:39):
Way back in my misspent youth as a state legislator
in twenty ten, we passed no fault divorce in New
York State, and New York State was the last state
in the United States to have no fault divorce. Do
you know, d or Laurie, do you know what the

(10:01):
first state was to have no fault divorce. It's a
fun fact, Nevana, No, no, no, you would think, Dana,
I was going to say.

Speaker 4 (10:11):
I was going to say Nevada as well, because I
remember my father as a trial attorney flying out to
Reno to do the divorces.

Speaker 2 (10:18):
It was California, nineteen sixty nine, and it was signed
into law by Governor Ronald Reagan. That is a fun
fact that I keep hoping it's going to be on jeopardy,
but it hasn't yet. So have you found, Dana, that

(10:38):
the passage of no fault divorce magically fixed things in
New York State?

Speaker 3 (10:45):
Or is it your opinion that.

Speaker 2 (10:46):
If two parties want to fight and want to attack
each other, they can still find a way to do that.

Speaker 4 (10:55):
Well, I think that it has helped matters considerably. It's
made the grounds and the basis for the divorce a
lot easier once that issue was out of the way.
You think that parties are more apt to agree to
the different financial aspects of the divorce.

Speaker 3 (11:13):
Interesting now, I guess I just have a little.

Speaker 2 (11:18):
Public service announcement to the many parents out there who
have quote unquote loaned money to a child going.

Speaker 3 (11:30):
Through a divorce.

Speaker 2 (11:32):
You know, because the legal fees can be exorbitant. It's
very important to think about how you want to deal
with this in your estate plan. If you have given
one child thirty forty fifty thousand for legal fees in

(11:54):
a divorce, how, if at all, do you want this
reflected in the estate plan. Do you want this forgiven
or do you want to give that amount to the
other two children off the top so that everyone is
treated equally before they go on to divide the estate.

(12:19):
So there's no right answer, no wrong answer, but I
can tell you that there will be differences of opinion
between and amongst the beneficiaries as to you know, whether
all of this help to a child going through a
divorce should be reflected in the ultimate estate distribution. And

(12:44):
a related issue as it relates to the estate planning
tangent of divorce is how we deal with a child's
spouse within the estate plan. So most of us who
have children leave the estate equally to the children, But

(13:07):
how do we want to deal with the tragic situation
where a child predeceases the parent. Should there one third
of the estate go to the child's estate which is
going to be to his or her spouse, or do
I want to have the ability to put my hand

(13:29):
back in the till and give that share to my grandchildren?
You know, why should they be punished for having had
the bad luck.

Speaker 3 (13:40):
To lose a parent?

Speaker 2 (13:42):
And this emphasizes the importance within your estate planning when
you do a trust. You want to make sure that
you have retained the ability to go back in there
and change the beneficiaries and life happens.

Speaker 3 (14:02):
Okay, Dana, back to you.

Speaker 2 (14:04):
Do you recommend that everyone about to be married have
a prenup?

Speaker 4 (14:13):
I do recommend prenuptial agreements. If you don't draft one
prior to the marriage, you can always draft a post
nuptial agreement. Not as common, but it's often done. The
agreements can dictate what the finances would be in worst
case scenarios, usually by percentages, but can be for specific amounts.

(14:35):
It does. A prenup does save a lot of aggravation
in the long run.

Speaker 2 (14:40):
Yeah, and I think you know there's this thought out
there that a prenup exists solely to protect the wealthy party. Right,
But if the prenup is too one sided, it runs
the risk being invalidated for being unconscionable.

Speaker 3 (15:03):
Right, Dana.

Speaker 2 (15:04):
If you have all of the money, I have no money,
and I sign a prenup saying you get to keep
everything that you have, and I walk away with nothing,
that prenup is on faulty ground in the event that
a party wants to challenge it. So I have clients
say to me, I draft a lot of prenups, and

(15:26):
they say, well, why should I even do a prenup?
I hear that they can be invalidated. Well, they can
be invalidated for very specific reasons. If it's done too
close to the wedding, there's a presumption that there was
duress on the party who was kind of browbeaten into

(15:49):
signing it, because the wedding invitations had already gone out
and there was an element of force in there. If
the party share an attorney, you know, you might as
well not even have a prenup. This is not the
place to save money. Each side needs to be represented

(16:11):
by separate counsel, and again, we don't want the agreement
to be to one sided, and we need to make
sure that we disclose all of our assets or the
party excuse me later contesting the prenup can say they
were not aware of the rights that they were giving up.

Speaker 4 (16:36):
Dana, my next, Yeah, I'm sorry if I could just
add to what you were saying, one party should not
pay for the attorney for the other.

Speaker 2 (16:43):
Party or even recommend an attorney for the other party.

Speaker 4 (16:47):
Exactly, yes, exactly, but everything you said was spot on
good advice.

Speaker 3 (16:53):
Do you have any advice, Dana.

Speaker 2 (16:55):
I think we all know people in our lives who
are in an unhappy marriage and for whatever reason, they
choose temporarily or permanently to stay in this marriage. It
could be religious reasons, it could be that they want

(17:17):
to stick it out until you know, the children are
you know fill in the blank, until they leave for college,
until they go to high school. So, if you have
checked out of your marriage mentally and psychologically, do you
have any legal tips for that individual?

Speaker 3 (17:42):
Yeah? I mean, let me give you an example of
something that I would tell someone in that situation.

Speaker 2 (17:48):
If you are sort of cohabiting with someone and the
relationship is irretrievably broken, I would change my logins on
social media, right, I would go and delete any potentially

(18:12):
compromising images on shared devices. If there are any amateur
videographers out there, you might want to delete those potentially
compromising images. And yeah, I would also want to change
my advanced directives. Do I want this person making life

(18:39):
and death medical decisions for me in a hospital setting
in the event that I am unable to speak up
for myself. So maybe I want to change my healthcare
proxy so that my spouse is no longer making the
decisions for me. Rather, you know, my sister law is

(19:00):
going to make the decisions for me, same thing with
a power of attorney. And yeah, those are some things
that I would recommend folks think about if they've mentally
checked out, if their marriage is.

Speaker 4 (19:16):
I would also recommend keeping copies separate apart of any
important financial documents, copies of tax returns ten ninety nine's
and things of that nature, because you may end up
needing that at some point to make to prove asset
distribution you are. Now you said, for example, about powers
of attorney, you can't just just tear up a power

(19:38):
of attorney. It has to be revoked in a certain fashion,
and notice has to be said to whomever the power
of attorney has been presented to. So you have to
do things the right way exactly. An attorney can obviously
tangle that for you.

Speaker 2 (19:53):
Now, let's turn to second marriages. If there is a
cohort out there who desperately needs to think about doing
a prenuptial agreement, it's folks entering a second marriage.

Speaker 3 (20:10):
Do you know, Laurent Dana, what.

Speaker 2 (20:13):
The divorce statistics are for second marriages?

Speaker 3 (20:18):
They can't be great.

Speaker 2 (20:19):
They're not great now over sixty percent. So my question
for you, Dana is have you ever represented a client
in more than one divorce?

Speaker 4 (20:32):
Yes?

Speaker 2 (20:33):
Not, but yes I do you give them a discount
on the next one.

Speaker 4 (20:39):
Well, now I'm now a licensed mediator is matrimonial mediator
as well.

Speaker 3 (20:44):
Oh that's great.

Speaker 4 (20:46):
I've kind of scared people towards the mediation process because
it's generally quicker. Sometimes it can actually be longer, but
generally quicker, but usually more inexpensive, and people are more
often happy with the mediation than the standard divorce process.

Speaker 3 (21:06):
Dana, that's really amazing.

Speaker 2 (21:08):
I did not know you were doing that, and I
will definitely refer folks to you. But you know, with
a second marriage, we tend to be older, so we
have fewer working years ahead of us from which to
financially recover from a you know, financial blowout in the
event of a divorce. And we also want to insulate

(21:32):
each other from long term care costs, right because spouses
are legally responsible for each other's long term care and
over forty percent of us will need some help down
the road with activities of daily living, the cranky functions

(21:57):
you know that come with living longer, all more likely
to need help with feeding, bathing, dressing, toileting, and Medicare
and the Medicare supplement do not cover this. When we
leave a hospital, they cover only the first one hundred
days in a rehab Beyond that, in the area that

(22:19):
we live in, the rehab costs can be in excess
of sixteen thousand dollars a month. So, you know, they
say that love is lovelier the second time around. Maybe,
but it's also a lot more complicated. And maybe I
want to know that my soon to be golden.

Speaker 3 (22:42):
Bachelor spouse has.

Speaker 2 (22:45):
Made plans for his long term care, that he possibly
has long term care insurance, or that he has insulated
his home that we're both going to be living in
within a properly drawn asset protection trust so that the
federal five year clock is under his belt and we

(23:09):
don't have to worry about any nursing home putting a
lean on the property. And we also want to prevent
blended family warfare later on. Right, if we have adult
children from prior relationships, chances are they're going to dislike

(23:32):
each other. Right, chances are that my adult children will
dislike my new spouse and maybe they can keep a
lid on it during my life.

Speaker 3 (23:43):
But we need.

Speaker 2 (23:44):
To revisit the estate planning as we think about a
second marriage. So, Dana, if you and I are living
in a house that is in your name, and I'm
saying to you, oh, please put my name on the
house too, you know, I'll always take care of your children.

(24:06):
That's not really a good bet because in my experience
in the estate planning world, the surviving spouse in a
second or subsequent marriage does not in fact take care
of the adult children of the first decendent. And I think, right,

(24:28):
I think it's a very common mistake out there to
say I give my husband Fabio lifetime ownership in the
property and then it will revert upon his death to
my children Mary, Susie and Johnny. That is a huge

(24:48):
mistake that seems kind of appealing at the outset. But
what if Fabio is in a nursing home. My kids
can't enter the house to pick up their baby pictures
because he is technically still alive. He could move to
Florida and rent the property out and he's going to

(25:09):
be getting the rental income. So you know, this is
another example that I encourage all of you out there.

Speaker 3 (25:16):
I know you all have wills.

Speaker 2 (25:18):
Many of you have trusts, but revisit them and ask
is this really taking care of the fault lines that
we all have in our lives. I want to change
the conversation from who gets my stuff to how are

(25:42):
they going to get my stuff? So maybe within the trust,
I say, upon my death, if Fabio and I are
living in my house and no separation or marital dissolution
proceeding shall have commenced as of the time of my death,
and he has the right to continue to occupy the

(26:04):
property until the earlier of his voluntary departure, his death,
his permanent stay in a nursing facility, or his cohabitation
with an unrelated person. If he met a new person,
let them go live at her house. So those are

(26:25):
some tips that I hope people think about. Dana, do
you have any final advice for folks thinking about a
divorce and how can they get in.

Speaker 3 (26:38):
Touch with you?

Speaker 4 (26:39):
First off, I can always be reached. My office number
is two one two nine six fours sixty six two two.
We're located in Lower Manhattan. We've been here since nineteen
forty six, so it's a long term office. Wow yea
where we can also come to visit clients at at

(27:00):
their home or or a location that's most of the
convenient to them.

Speaker 3 (27:04):
No Data. Thank you so much.

Speaker 2 (27:05):
And listen, folks, if you're driving and you weren't able
to write down that number, please reach out to me
during the week and I can put you in touch
with Dana and you can shoot me a message through
my website at my Asset Protection Attorney dot com. Dana,

(27:26):
thanks so much for being with us. Hope you can
be on the program again.

Speaker 4 (27:31):
I look forward to it. Thank you very much.

Speaker 3 (27:33):
Take care Data.

Speaker 2 (27:34):
So, Laurie, do you have any tips once we are
divorced how can we save some money? And you had
a great expression about living a full life with one
half of the resources.

Speaker 3 (27:52):
That excuse me, that's right, Anne.

Speaker 2 (27:55):
So for myself post divorce, one thing that I was
really careful to do is keep the money a fun
conversation with the kids, rather than attaching my guilt to
half the assets, moving forward, really making it a game
and teaching the kids to save.

Speaker 3 (28:11):
So I linked all gifts for the kids to their.

Speaker 2 (28:14):
Saving plans, to their chor chart for which they could
earn allowance money and every time they asked for something,
turning those wants into a saving plan and a game.
So it's really changing the narrative from we don't have
enough to how do we make this work in a
fun way? That is amazing And I think the single
most important thing that we can do with our kids

(28:37):
when it comes to money is saying no right. If
we give them whatever they want when they're asking for it,
they don't have.

Speaker 3 (28:47):
The joy of delayed gratification.

Speaker 2 (28:51):
And earning, earning something and feeling proud of it, feeling
proud of it, feeling empowered, and changing money into a
positive narrative. Laurie, thank you so much for joining the
program again and I hope you will be back soon.
Thanks for having me in.

Speaker 5 (29:11):
Have a great day everyone.

Speaker 1 (29:38):
The preceding program was sponsored by New York Priority Medical Care.
The preceding was a paid podcast. iHeartRadio's hosting of this
podcast constitutes neither an endorsement of the products offered or
the ideas expressed.