When it comes to divorce, most people envision a battlefield of emotions and legal terms. We dive into the complexities of this life-altering event with our guest, Seth Nelson, an experienced divorce attorney. Seth unravels the intricate financial implications of divorce, reminding us that viewing separation as a win-lose situation will only lead to losses on both sides. He offers crucial insights into local laws and equitable distribution - a concept that can dramatically shape a divorce's outcome.
A divorce doesn't only affect the couple involved, but also the innocent bystanders - the children. Seth sheds light on the often overlooked financial impacts on children’s futures, discussing effective strategies for planning for significant future expenses like college fees. He also broadens the conversation by touching upon same-sex couples and the financial challenges they too face during a divorce. Indeed, no one is immune to the financially turbulent waters of divorce, and Seth's expert advice provides some much-needed guidance.
Finally, the episode takes an unexpected turn as we delve into Seth's personal experience with divorce. His candid recounting of negotiating with his attorney shines a light on the importance of legal counsel during this tumultuous period. Seth also emphasizes the significance of understanding alimony implications, particularly when considering remarriage, and provides tips for living within your means during the recovery process. It's not every day you get advice from an attorney who's been in the trenches, making this episode an invaluable resource for those navigating the financial labyrinth of divorce. Tune in and equip yourself with knowledge and strategies to handle divorce more effectively.
Our guest Seth Nelson is the managing partner at NLG Divorce & Family Law as well as the host of the terrific How to Split a Toaster podcast.
Have an idea for a show or a question for Kim? Send us a text message
Welcome to Money Matters, the podcast that focuses on how to use the money you have, make the money you need and save the money you want – brought to you by Neighbors Federal Credit Union.
The information, opinions, and recommendations presented in this Podcast are for general information only and any reliance on the information provided in this Podcast is done at your own risk. This Podcast should not be considered professional advice.
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Episode Transcript
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Speaker 1 (00:02):
Welcome to Money Matters, the podcast that
focuses on how to use the moneyyou have, make the money you
need and save the money you want.
Now here is your host, ms KimChapman.
Speaker 2 (00:14):
Welcome to another edition of Money Matters.
I am your host, Kim Chapman.
Today we delve into a topicthat, for many, can be one of
the most emotionally andfinancially challenging periods
of their lives divorce.
As relationships evolve,sometimes paths diverge, and
when they do, it's crucial tounderstand not just the
emotional side of it, but reallythe financial ramifications.
(00:37):
As a financial counselor, Ioften have individuals that come
to me simply because of divorce.
They're going from a two-incomefamily to a one-income family.
Someone's left them with a lotof debt.
There's so many different waysthat divorce can affect you, but
the financial side is one thatwe should never overlook.
So joining me today is Mr SethNelson.
(00:59):
He is an attorney that strictlydeals with divorce.
Thank you for joining me today,Mr Nelson.
Speaker 1 (01:04):
Oh, call me Seth, so happy to be on your show.
Speaker 2 (01:07):
So give our listeners a little information about
yourself, your family life andyour practice, and what makes
you an expert on the subjectwe're going to talk about today.
Speaker 1 (01:15):
Well, I'm Seth Nelson .
I am the managing partner ofNLG, a divorce and family law
firm in Tampa, florida.
I've been practicing law forover 21 years now and focused
solely in the divorce space forover 16.
I've been through a divorce,now remarried.
I've dealt with the issues ofhaving a very small child.
(01:36):
You went through divorce and,like you said in your opening,
going from a household with twoincomes to splitting up and each
having one income living indifferent places, so of course,
you're going to have lessdisposable income at that time.
I deal in high net worth caseson a daily basis, so we're
dividing up businesses,companies, closely held
(01:59):
companies, stock options, longterm incentive plans, dealing
with mortgages that need to berefinanced, anything that goes
on with assets and debts, andthe divorce we deal with on a
daily basis and it's tough onpeople out there, so we're just
trying to do the best we can andget them through the process as
quickly and fairly as possible.
Speaker 2 (02:18):
Over the years, you'd always hear the statistic that
the divorce rate is 50%, andit's always been cited that the
number one reason is financialissues.
I don't know if that's changedto social media, but we're going
to stick with financial issuesfor today, so let's jump right
into it.
What are the most commonfinancial misconceptions people
have about divorce?
(02:38):
I know that there's a lot offocus on the emotional side how
is this going to affect me?
How is it going to affect thekids?
But are they really overlookingsome things?
What might be a misconception?
Speaker 1 (02:49):
Well, when you focus on divorce, especially with
finances, I always telleverybody on all the podcasts
I'm on on my own podcast that wehave check your local
jurisdiction.
Get with a lawyer in your statethat knows what they're talking
about to ask the specificquestions, because divorce law
(03:09):
changes state by state.
We can talk about generalconcepts today, but always check
your local jurisdiction.
So some misconceptions if acount is in my name only, it's
mine.
My spouse isn't entitled to it.
Speaker 2 (03:24):
What Just kidding?
You've heard that before.
Speaker 1 (03:29):
I know Absolutely.
So the first part you got tothink about when you're dealing
with divorce or misconceptionsis what we call in Florida
equitable distribution.
This is the division of assetsand debt.
So things that you own andmoney that you owe, that's debt.
So in Florida we create what'scalled a schedule of equitable
(03:50):
distribution.
That's just legalese to talkabout an Excel spreadsheet.
So what I would recommend toall your listeners is, if you're
thinking about going throughthis process, make a list of all
of your assets and all of yourdebt.
Now, as we all know, some peoplewill not know the answers to
that question.
That's fine.
In the divorce process you canget the information you need and
(04:12):
we'll talk about hiding assets,I'm sure, later.
But once you identify all theassets, you have to determine
whether those assets or debtsare marital or non-marital.
And if they're marital, they'regoing to be divided.
If they're non-marital,whoever's they are keeps it.
So basic example if you getengaged and your fiancee hands
(04:33):
you an engagement ring inFlorida, that is a non-marital
asset.
It was a gift from a boyfriendor a girlfriend, let's say,
before the marriage.
You get married, that's yours,but on the first anniversary he
gives you diamond earrings tomatch.
That is a gift between spousesIn Florida.
If you get divorced and you'rethe guy that gave the diamond
(04:56):
earrings, you can say that youwant half the value back.
So if they're worth $1,000 andshe keeps them, you can say she
owes me $500.
Speaker 2 (05:06):
Ooh, but I don't have to split up the set right, I
can still have the beautifulring and the beautiful earrings.
Speaker 1 (05:11):
That's right.
You have the beautiful ring andyou can have one earring and
just give them the other one.
Speaker 2 (05:19):
Not quite the look I'm looking for.
So keeping in terms ofmisconceptions.
You know this is where yourexpertise and your 20 years in
the practice is going to comeinto play.
Who, would you say, suffers themost financial loss in a
divorce?
Is it men or is it women?
Because you know, if I ask awoman or a man, you're going to
get different answers.
Speaker 1 (05:38):
They both will feel like they're losing, and the
reason for that is because ifyou view it as winning or losing
, you both are going to lose.
So, first off, if someone'scomfortable in their home and
they have to sell their home andthey have to downsize because
you went from two in comes underone roof into two in comes
under two separate roofs, yourstandard of living is going to
drop.
So if you have to sell thehouse, you're going to feel like
(06:01):
I lost the house.
If you keep the house, youmight feel great, but you might
have to give up all yourretirement to do that and
therefore you're going to feellike you lost your retirement.
If you get divorced and you arethe non-income earning spouse
and you're receiving an alimony,it's never going to be as much
as you think it should be, andif you're the one paying it,
(06:23):
you're always paying more thanyou think you should be.
So everybody thinks that theylose.
Divorce is a huge financialstressor and one major thing
that you can control if you'resoon to be former spouse will do
the same is keep attorney'sfees down by being honest, open
(06:44):
and it's hard to say this duringa divorce and vulnerable, by
bringing all the informationforward and don't have the
lawyers go fight to get all thedocument to look at the
financial picture so they canmake informed decisions.
Speaker 2 (06:56):
So cooperation can equate savings is what you're
saying, huge saving.
Speaker 1 (07:01):
Divorce in.
Judges are there to solvedispute.
If there's no dispute, there'snot much for us to do.
Speaker 2 (07:07):
Oh, duly noted.
So what type of financial lossis resulting from a divorce Do
men encounter more frequentlythan women?
Speaker 1 (07:14):
If the man and I'm going to, say like the wage
earner, because sometimes intoday's society the female will
be the wage earner.
Sometimes we'll have same-sexcouples.
So the wage earner will feellike they are losing part of
their income.
If they have to pay alimony orchild support after divorce,
that's the big one.
(07:35):
If they're the ones that havebeen saving up the retirement
account, the IRA, and it has toget divided, they'll feel like
they're losing half of theirretirement.
If you have someone in themilitary and they realize they
have to give up their pension,or a first responder has to give
up a portion of their pension,they feel like they're losing
(07:55):
that.
So it's just an emotional.
From the legal perspective,that was all marital asset.
It gets divided evenly inFlorida.
Speaker 2 (08:02):
And I have another question.
As you might figure, I'm kindof shifting this and focusing a
lot on men and one of thereasons is, you know, earlier we
did a podcast on divorce but wewanted to do it from a woman's
perspective.
So we had a table full offemales giving us all the tips
and tools and pitfalls from awoman's perspective.
So we want to have you kind ofhighlight from a man's.
So what are some commonpitfalls men should be aware of
(08:25):
during a divorce specifically?
That basically would be for themales.
Speaker 1 (08:31):
Come forward with all the information.
Do not try to hide the ball.
When you try to hide the ball,it will cost you more in
litigation.
You want to avoid the pitfallof having your divorce take two,
three, four years in the courtsystem.
Because if you have a pie andyou have to divide up that pie,
and that pie is money, if youhave to give her I'm saying in
(08:55):
quote, 60%, even though youshould only give her 50%, that
might be financially a betterdeal for you than litigating
your case for two to three yearsand giving her then 50% of the
pie.
And the reason for that is thepie is gonna be smaller because
(09:17):
you've litigated for two orthree years and you've given the
money to the lawyers, you'vegiven the money to the forensic
accountant, you've given themoney to expert witnesses.
So come forward, don't hide theball.
Try to get a settlement early.
Avoid attorney's fees and costs.
Speaker 2 (09:32):
So, from your perspective as an attorney, you
have couples with differentfinancial dynamics.
Some of them have everythingthat's joint, they do everything
together, and then you havethose on opposite stream.
I have my account, you haveyour account.
From your perspective, whichcase, which circumstance is just
better in terms of the processwhen you have couples that
everything is shared or coupleswhere everything's already
(09:53):
separate?
Speaker 1 (09:53):
The process is better if it's already shared, and the
reason for that is because thenyou both can get the documents.
You need to make an informeddecision.
If she has her accounts and hehas his account and you don't
know about them, or if money'sbeen transferred to third
accounts or fourth accounts orbought a piece of property or
put into a 401K.
If you don't have thatinformation, you have to go
(10:16):
chase it.
Then you have to do analysis towatch where the money flowed in
a tracing.
That will take longer and bemore expensive.
If all the accounts werealready together, then you know
you're getting the full picture.
But that goes back to yourreally great question how to
avoid a pitfall.
If your accounts are separate,that's not a problem, as long as
(10:37):
you give full-fledged, honestdisclosures at the very
beginning.
Speaker 2 (10:40):
Are there any consequences?
What types of penalties doindividuals face, whether it's
the male or the female, whenthey are hiding assets?
We see this and we hear this,especially if you're looking at
TV or somebody's withholdingtheir secret account.
Speaker 1 (10:57):
Well, you can get sanctioned by the court.
You're gonna have to pay extraattorney's fees If they're not
disclosed in Florida on yourfinancial after David which is a
sworn statement to what yourfinancial picture is and that is
later discovered the other sidecan bring a motion to the court
to undo your entire divorcesettlement because you flat out
(11:18):
lied.
You brought fraud upon thecourt.
So you could be six months,eight months later and realize,
man, I gotta go through thiswhole process again and judges
don't look too kindly when youlied to them the first time.
Speaker 2 (11:31):
What are you seeing now in terms of a trend?
Are you still finding?
Is it more men filing fordivorce, more women filing for
divorce?
Speaker 1 (11:38):
It actually depends on the age group of it.
There's a lot of women that arewhat we call gray divorce, that
are older 50, that are the onesinitiating the divorce, more
than the men.
Other than that, it's about50-50 when you are at a younger
age group, let's say 25 through50.
Speaker 2 (11:55):
And another new trend that again I'm seeing.
You have individuals or couplesthat are divorcing but then
remaining in the same household.
But my question would be haveyou had couples come to you for
divorce, looked at the financialramifications and then said,
hey, let's scrap this, let'swalk away and stay married
because of the finances?
Speaker 1 (12:16):
Yes, what we typically do in those cases if
we've done what's called apost-nuptial agreement.
Everyone's heard about apre-nup, where you know what's
gonna happen in the money if youget divorced, and sometimes
those pre-nups will have deathprovisions as well.
What happens upon death?
Think of a second marriage.
You wanna leave the money toyour children or grandchildren
so you don't wanna go into yourspouse's children or
(12:38):
grandchildren.
But people come to me.
They're looking at gettingdivorced and the big stressor in
their life is the money.
And we work out a post-nuptialagreement.
You're already married and wedecide how the money will be
handled during the marriage andupon divorce.
So this might be where someonegets an allowance.
You get 15 grand a month.
(13:00):
I'm making up a number to spendand I'm gonna put so much away
in an IRA for you every year andI'll put so much away in a 401K
for you every year and that way, or into a brokerage account
for you every year.
That's in your own name, andthen if we get divorced, you get
to keep those assets that I'vebeen putting money into all
along.
But that lowers the stresslevel of why are you always
(13:20):
asking me for money?
You guys just agree on how muchyou have to spend.
Speaker 2 (13:24):
So you've been to Florida, of course we're in
Louisiana, of course we havelisteners all over the country.
So I wanna ask are there anyparticular laws that you might
be aware of that are notfollowed by every state, because
of course they are gonna havedifferent regulations, but that
you believe would be a gamechanger if all states would
adopt this particular statute?
Speaker 1 (13:42):
So a lot of states deal with child support
differently.
In Florida, by way of example,child support and when a child
turns 18 years old, or they cango a little bit longer if
they're 18, but they're going tograduate high school before
they turn 19 years old, becausethe concept is you don't cut a
kid off from child supportduring their senior year.
Speaker 2 (14:05):
That all makes sense, that would be cruel.
Speaker 1 (14:07):
Okay.
Now some other states say waita minute.
A lot of people support theirchildren after high school.
They support them in college,whether it's a trade school,
community college or an IvyLeague school.
They are a state school.
We're supporting these kids, sothey will require you to
support them for a longer periodof time, and I think that makes
(14:29):
more sense to me, becausethat's typically what parents
try to do to help.
So I think that would do it.
But, like to your point, everystate is different.
Every state can handle it theirown way.
I just think that it createsmore conflict for parents and
kids when they're trying to gooff to college or start out on
their own, and then one parent'slike I'm done Ask your dad, ask
(14:52):
your dad, ask your dad when.
If you're getting child support, then you could maybe help
along the way as well.
Speaker 2 (14:58):
How can parents plan for their children's financial
future, such as college expenses, when they're going through a
divorce?
Speaker 1 (15:05):
Well, there's 529 plans that if they have going
forward, they can make asettlement agreement where they
say both parents will contributeto a college savings account
for their children.
But remember, they're alreadylowering their standard of
living, so they're going to haveto make a choice on what to do
with their discretionary incomeif they have some.
And one of those things is wewant to help our child through
(15:28):
college.
Let's put money aside along theway, and we might not go out to
a fancy dinner, we might not goon a fancy trip on a plane, we
might just drive to the beach ordrive somewhere for the weekend
.
So you can adjust yourdisposable income to say we are
going to do without because wewant to save for the future.
Speaker 2 (15:49):
So, like you said, sometimes the standard of living
changes.
What strategies can be employedto minimize the financial
disruptions for children duringand after a divorce?
Speaker 1 (16:00):
So a lot of lawyers will tell people that might
receive alimony let's say thewoman in this case and say don't
get a job yet.
Look for a job, but don't trytoo hard, and then they'll have
to impute income.
If you want to minimize stress,the best thing you can do is
become self-sufficientfinancially.
So go get a job.
Having more income coming intothe family is always better than
(16:23):
less, and you can minimize yourchildren's stress if you can
help support them, and the wayto do that is to become as
financially self-sufficient aspossible.
Speaker 2 (16:33):
So I want to shift gears just a little bit.
Are same-sex couples thatdivorce immune from any issues,
or do they have issues that aregoing to be different, legal
issues that would be differentfrom heterosexual relationship?
This is easy.
They're all the same, nodifference.
Speaker 1 (16:49):
No difference.
Speaker 2 (16:50):
Okay, so someone is considering a divorce.
What steps should they take toleverage the best financial
outcome?
Speaker 1 (16:58):
It's always easier to get divorced when you have
money that is disposable incomeand you realize that you don't
want the lawyers in the conflictand the forensic accountants
and the experts that eat it allup.
So if you want to prepare fordivorce, the best thing is to do
is get your financial house inorder, which is the things
people should be doing on adaily basis anyway.
(17:19):
Don't carry credit card debt.
Have savings.
Save for retirement, save foryour kids' college.
Live within your means.
Live within your means.
That is the best way to savemoney when you go through
divorce, because then you cometo the lawyer and say look, we
have all assets.
We have no debt other than ahouse and a couple car loans.
Here's what we think we shoulddo with the house.
(17:41):
Our kids are in high school.
We want to keep the house foranother two years, let them
graduate.
Then we're going to sell itbecause the interest rates are
high right now.
We don't want to refinance.
There's all sorts of things tobe creative so you can minimize
the negative financial impact.
Speaker 2 (17:58):
And I'm going to use your words Live within your
means, because that's a seguefor really the criteria that I
use all the time for developingand having good credit habits.
What impact does divorce haveon credit?
It can be devastating.
Speaker 1 (18:13):
And the reason it's devastating is if you're going
through a divorce and you aregoing to make it contentious and
you guys are going to fight andargue and not be forthcoming
with information, you are goingto drive up your attorney's fees
.
I've looked at thousands, tensof thousands, hundreds of
thousands of financialaffidavits budgets.
(18:33):
Nobody has ever once had a lineitem in their daily budgets for
divorce attorney.
So when you're running up thatbill, something's got to give.
You're putting it on a creditcard, you're maxing it out, you
are depleting a retirementaccount, a 401K, a brokerage
(18:55):
account, maybe your kid'scollege savings goes to the
attorney and now you're going tosend my kid to college and not
yours.
So it can be devastating.
You could miss a mortgagepayment, you could miss a car
payment, and that's when thingsare real bad.
Speaker 2 (19:10):
And how does it handle?
You know, I've seen situations.
Individuals have come in andsay, hey, I'm in the middle of a
divorce, or I got a divorce andhe's responsible for the
mortgage, and of course you'reseeing the late payments on
there.
How can you, as an attorney,what impact do you have on that?
You know, because obviouslythey may call you and say, hey,
they're not paying the mortgage,it's their responsibility.
(19:32):
What can be done in thosesituations?
Because I do see that time andtime again.
Speaker 1 (19:37):
I move as quickly as I can through the court process,
and in the court process and inthe divorce, you can only go as
fast as the slowest person orentity.
So if I'm ready to go to trialtoday, and so is the other
lawyer and so are the party, butthe judge doesn't have a trial
date for six months, there'snothing the lawyers can do about
that.
So what I do is get theinformation we need right away,
(19:59):
file our motion to require thepayment of the mortgage, go to a
mediation which is I'm requiredto do and go to that hearing as
soon as possible.
And I just described in amatter of seconds could take six
months.
Speaker 2 (20:14):
Wow, that's a pretty long time and a lot more
delinquencies can kind ofdevelop and add up.
So we prepare for marriage, wesit down and we think about
preparing for children.
How do you prepare financiallyfor divorce?
If you're on the fence and itlooks like this is the path that
you're going, what's your bestadvice?
(20:34):
Is there a checklist?
What are some things you said?
You know, get your ducks inorder, get rid of the debt that
you have.
But what else?
Financially, what's the bestthings that I can do to get
myself ready for a divorce?
Speaker 1 (20:46):
Get all your financial information together.
Pull your credit report.
Make sure you see where all thedebts are.
If there's mistakes on it, getit cleaned up.
If there's small credit cards,get them paid off.
Close them if you can, soduring the divorce process
people can't run up bills onthem.
Make sure you're getting allyour financial statements from
(21:06):
your bank accounts, your creditcard accounts, your brokerage
account.
I would get the last six monthsto a year.
Make sure there's been nowithdrawals of substantial
amounts of money that seem alittle odd, Like wait a minute,
where did this 20 grand go?
Right, that type of informationgathering early, just slow and
steady.
You don't have to do it all inone weekend.
(21:27):
That will help you get thefinancial picture in order and
will save you time and moneywhen you go to a lawyer and say
here are all my documents,here's the asset, here are debt,
here's what I think shouldhappen, but tell me if I'm
complying with the law.
Speaker 2 (21:43):
Can a couple get divorced without having an
attorney at all?
Speaker 1 (21:46):
Absolutely.
There's no requirement and thestate will not provide one for
you.
Speaker 2 (21:50):
What are the pitfalls , what are the disadvantages?
So I go that route.
Well, when you buy a house, youhave a realtor.
Speaker 1 (21:57):
The realtor has a broker.
You have an inspection.
You have someone that's theclosing agent.
You have, maybe, a lawyer toreview the contract.
When you're getting a divorceand you're dividing up your
assets and debt, you're signinga contract If their kids
involved.
You're signing a parenting plan, potentially or you're going to
a trial, which is very complex.
So I am a strong believer thatthe client makes the decision on
(22:21):
the ultimate outcome in asettlement.
If the other side agrees,that's fine, even if legally
they could get more in court.
I respect my client's right tohave ownership and make that
decision.
They can give away the farm andavoid trial.
It's my job to let them know.
Listen, you're giving away thefarm, that's okay.
(22:41):
I will share it with my owndivorce.
Many, many years ago over 17years ago my lawyer sat me down
and said Seth, you can do betterin court, you do not have to
give up this money.
And I said I don't care, I'llgo make more money in the future
.
I want to make sure that myformer spouse stays in this
(23:01):
house because it's good for herand it's good for the kids to
stay in the school district.
But my lawyer did a good job bysaying under the law, you can
do better, but it's your choiceif you want to do this now.
That's why I think you need alawyer, so you understand what
you're giving up or what you'reentitled to, and then you make
the decision.
Speaker 2 (23:22):
Of course today we have lots of people getting
remarried.
I heard you mentioned you'redivorced and you're remarried.
Is there something that aperson needs to keep in mind if
they're getting the divorce?
Maybe they don't know thatthey're going to find somebody
else down the line that theyshould really think about and
prepare for during this divorce.
That will help them before theyget married again.
Speaker 1 (23:43):
So in Florida the big issue on that is alimony.
If you're receiving alimony andyou get remarried, your alimony
terminate, boom done.
So if you're thinking aboutgetting remarried and someone's
willing to pay you alimony for10 years, you might say I'll
take it for five years.
(24:03):
But I want you to pay me morenow over five years on a monthly
basis, but you don't have tomake the last five years of
payment.
So I'm only going to get reallylike seven years of alimony, if
you added up the numbers.
But I'll take it in fiveinstead of 10 because then, boom
, you get married on your sixthyear.
You would have lost the lastfour years anyway.
Speaker 2 (24:24):
And if you are looking at a second marriage.
We typically think of pre-nubsfor really wealthy individuals,
but it seems like the waters canget really, really murky when
you have your first wife and youhave those kids and now you
have your second wife or secondspouse and kids.
What can a person do ahead of asecond marriage Again, just in
(24:46):
case things go sour again, justto not make it so chaotic and
complicated if you have to do asecond divorce and how often do
you see second and thirddivorces with the same
individual?
Speaker 1 (24:58):
Oh, I've seen that before they get married, they
get divorced.
They get remarried.
I've seen that I've divorced aguy more than once to the same
woman, right.
So here's the deal.
Divorce aren't bad, they'redifficult to negotiate.
Because you're in love, you wantto get married, you think
you're going to walk the rest ofyour life on this earth with
them and you're talking aboutwhat happens if we split up.
(25:19):
That's not a fun conversation.
Someone always feels like, well, you're just marrying me for my
money, and the other one feelslike, well, you're not even
taking care of me when I'mstepping out of my career to
stay home for 10 years and I'm35.
Now we're going to havechildren.
I'm going to be out of theworkforce for 10, 15, 20 years,
five years, whatever, and now Igot to get back in.
(25:40):
That's hard to recoup thatearning potential that you've
given up.
So I'm in favor of prenup.
The reason I'm in favor ofprenups when you get married,
whether you like it or not,you've entered into a contract.
The issue is you don't know theterms of that contract, because
alimony changes based on thenumber of years you've been
married.
Alimony can change based uponincome.
(26:01):
Alimony can change based uponwhether you help support your
spouse going off to school andyou stayed home and raised the
kids.
There's all these things youdon't know because you just
haven't lived it yet.
You don't know how long yourmarriage will last.
You can get married and say wewant to know the terms of this
marriage contract and that'swhat a prenup does.
(26:22):
If we're married for zero tothree years, you get X number of
dollars in alimony.
If we're married from three tofive years, you get Y.
If it's more than five yearsbut less than 10, you get Z.
You can define those terms.
The law doesn't for you anyway.
You just don't know what thoseterms are when you get married
without a prenup.
You can define them when you do.
Speaker 2 (26:42):
How do we start over financially?
What does a financial recoveryplan look like after we divorce?
Speaker 1 (26:48):
Live within your means.
You're going to cut back.
You are not going to have allof the wonderful things that you
might have had during marriage.
It's going to be tough.
You're going to have to justscale back and really focus on
what is important Spending timewith your children, spending
time with your friends.
Even if you can't afford to goout with ladies night and to
(27:09):
fancy dinners or on trips, findother ways to fill your time
that is less expensive.
That is the single best thingyou can do, because you need to
start.
You're going to feel like youjust lost half your wealth or
you're going to be a pile ofdebt.
If the debt's that bad, youmight want to consider
bankruptcy to wipe the plateclean and start again.
(27:33):
But get financially healthy.
Live within your means.
Do what you can do to save forretirement.
Speaker 2 (27:39):
And I echo everything that you just said.
Those are words that I live by,Live within your means.
Well, Seth, thank you so muchfor sharing this information.
Hopefully, this will help easethe burden of somebody that's
looking to get a divorce orgoing through a divorce and know
what to expect before, duringand after.
Speaker 1 (27:57):
Well, I really appreciate you having me on.
I hope listeners found ithelpful.
You're asking all the rightquestions and that's step one.
Speaker 2 (28:05):
So, seth, you actually have a podcast about
divorce.
Tell us a look.
First Tell us the name I lovethe name and then tell us a
little bit about the podcast andhow our listeners can find it.
Speaker 1 (28:16):
You're so sweet, so it's called how to Split a
Toaster A divorce podcast aboutsaving your relationship.
You can find it wherever youlisten to your podcast on any of
the platforms out there.
You could Google how to split atoaster.
We're coming up.
We love it.
It's doing exactly what you'redoing.
You focus on the financialmatters.
We focus on not just divorce.
(28:38):
We will focus on every aspectof divorce.
We've had podcasts on datingafter divorce.
We've had podcasts on handlingfinancial matters All the
questions you're asking todayduring a divorce.
We've had podcasts on who getsthe dog and how do you decide
what's best for the dog asopposed to for you.
So we try to bring a lot ofhumor to it, because divorce is
(29:01):
hard enough.
Take a listen If you find ithelpful.
Listen.
Download other shows, listen tothose.
If it's not helpful, don'tlisten.
It's just that simple.
Speaker 2 (29:13):
I've listened.
I enjoyed it Again.
I love the title how to Split aToaster.
Again, thanks so much forjoining us.
Speaker 1 (29:21):
Thanks for having me.
Speaker 2 (29:28):
Navigating a divorce can be emotionally and
financially challenging.
Making sound financialdecisions during this time is
crucial.
Here are some financial tipsfor couples considering or
undergoing a divorce.
Avoid making big financialdecisions immediately.
Amid the emotional turmoil of adivorce, it might be tempting
to make significant decisionsbased on your emotions.
(29:48):
So give yourself some time andspace to clear your head and
think rationally.
Hire a financial advisor,especially if your finances are
complex, as you just heard.
It may be children involved, itmay be additional spouses, it
may be businesses included.
So hire a financial advisorjust to make sure you cover all
(30:09):
your bases.
Then understand your ownfinances.
Review all of your financialaccount assets and debts.
Create a budget based on youranticipated post-divorce income.
And again, we can't say itenough Live within your means.
And for more information, youcan check out neighborsfcuorg To
learn more on how to use themoney you have.
(30:31):
Make the money you need andsave the money you want.
Welcome to Money Matters, the podcast that
focuses on how to use the moneyyou have, make the money you
need and save the money you want.
Now here is your host, ms KimChapman.
Speaker 2 (00:14):
Welcome to another edition of Money Matters.
I am your host, Kim Chapman.
Today we delve into a topicthat, for many, can be one of
the most emotionally andfinancially challenging periods
of their lives divorce.
As relationships evolve,sometimes paths diverge, and
when they do, it's crucial tounderstand not just the
emotional side of it, but reallythe financial ramifications.
(00:37):
As a financial counselor, Ioften have individuals that come
to me simply because of divorce.
They're going from a two-incomefamily to a one-income family.
Someone's left them with a lotof debt.
There's so many different waysthat divorce can affect you, but
the financial side is one thatwe should never overlook.
So joining me today is Mr SethNelson.
(00:59):
He is an attorney that strictlydeals with divorce.
Thank you for joining me today,Mr Nelson.
Speaker 1 (01:04):
Oh, call me Seth, so happy to be on your show.
Speaker 2 (01:07):
So give our listeners a little information about
yourself, your family life andyour practice, and what makes
you an expert on the subjectwe're going to talk about today.
Speaker 1 (01:15):
Well, I'm Seth Nelson .
I am the managing partner ofNLG, a divorce and family law
firm in Tampa, florida.
I've been practicing law forover 21 years now and focused
solely in the divorce space forover 16.
I've been through a divorce,now remarried.
I've dealt with the issues ofhaving a very small child.
(01:36):
You went through divorce and,like you said in your opening,
going from a household with twoincomes to splitting up and each
having one income living indifferent places, so of course,
you're going to have lessdisposable income at that time.
I deal in high net worth caseson a daily basis, so we're
dividing up businesses,companies, closely held
(01:59):
companies, stock options, longterm incentive plans, dealing
with mortgages that need to berefinanced, anything that goes
on with assets and debts, andthe divorce we deal with on a
daily basis and it's tough onpeople out there, so we're just
trying to do the best we can andget them through the process as
quickly and fairly as possible.
Speaker 2 (02:18):
Over the years, you'd always hear the statistic that
the divorce rate is 50%, andit's always been cited that the
number one reason is financialissues.
I don't know if that's changedto social media, but we're going
to stick with financial issuesfor today, so let's jump right
into it.
What are the most commonfinancial misconceptions people
have about divorce?
(02:38):
I know that there's a lot offocus on the emotional side how
is this going to affect me?
How is it going to affect thekids?
But are they really overlookingsome things?
What might be a misconception?
Speaker 1 (02:49):
Well, when you focus on divorce, especially with
finances, I always telleverybody on all the podcasts
I'm on on my own podcast that wehave check your local
jurisdiction.
Get with a lawyer in your statethat knows what they're talking
about to ask the specificquestions, because divorce law
(03:09):
changes state by state.
We can talk about generalconcepts today, but always check
your local jurisdiction.
So some misconceptions if acount is in my name only, it's
mine.
My spouse isn't entitled to it.
Speaker 2 (03:24):
What Just kidding?
You've heard that before.
Speaker 1 (03:29):
I know Absolutely.
So the first part you got tothink about when you're dealing
with divorce or misconceptionsis what we call in Florida
equitable distribution.
This is the division of assetsand debt.
So things that you own andmoney that you owe, that's debt.
So in Florida we create what'scalled a schedule of equitable
(03:50):
distribution.
That's just legalese to talkabout an Excel spreadsheet.
So what I would recommend toall your listeners is, if you're
thinking about going throughthis process, make a list of all
of your assets and all of yourdebt.
Now, as we all know, some peoplewill not know the answers to
that question.
That's fine.
In the divorce process you canget the information you need and
(04:12):
we'll talk about hiding assets,I'm sure, later.
But once you identify all theassets, you have to determine
whether those assets or debtsare marital or non-marital.
And if they're marital, they'regoing to be divided.
If they're non-marital,whoever's they are keeps it.
So basic example if you getengaged and your fiancee hands
(04:33):
you an engagement ring inFlorida, that is a non-marital
asset.
It was a gift from a boyfriendor a girlfriend, let's say,
before the marriage.
You get married, that's yours,but on the first anniversary he
gives you diamond earrings tomatch.
That is a gift between spousesIn Florida.
If you get divorced and you'rethe guy that gave the diamond
(04:56):
earrings, you can say that youwant half the value back.
So if they're worth $1,000 andshe keeps them, you can say she
owes me $500.
Speaker 2 (05:06):
Ooh, but I don't have to split up the set right, I
can still have the beautifulring and the beautiful earrings.
Speaker 1 (05:11):
That's right.
You have the beautiful ring andyou can have one earring and
just give them the other one.
Speaker 2 (05:19):
Not quite the look I'm looking for.
So keeping in terms ofmisconceptions.
You know this is where yourexpertise and your 20 years in
the practice is going to comeinto play.
Who, would you say, suffers themost financial loss in a
divorce?
Is it men or is it women?
Because you know, if I ask awoman or a man, you're going to
get different answers.
Speaker 1 (05:38):
They both will feel like they're losing, and the
reason for that is because ifyou view it as winning or losing
, you both are going to lose.
So, first off, if someone'scomfortable in their home and
they have to sell their home andthey have to downsize because
you went from two in comes underone roof into two in comes
under two separate roofs, yourstandard of living is going to
drop.
So if you have to sell thehouse, you're going to feel like
(06:01):
I lost the house.
If you keep the house, youmight feel great, but you might
have to give up all yourretirement to do that and
therefore you're going to feellike you lost your retirement.
If you get divorced and you arethe non-income earning spouse
and you're receiving an alimony,it's never going to be as much
as you think it should be, andif you're the one paying it,
(06:23):
you're always paying more thanyou think you should be.
So everybody thinks that theylose.
Divorce is a huge financialstressor and one major thing
that you can control if you'resoon to be former spouse will do
the same is keep attorney'sfees down by being honest, open
(06:44):
and it's hard to say this duringa divorce and vulnerable, by
bringing all the informationforward and don't have the
lawyers go fight to get all thedocument to look at the
financial picture so they canmake informed decisions.
Speaker 2 (06:56):
So cooperation can equate savings is what you're
saying, huge saving.
Speaker 1 (07:01):
Divorce in.
Judges are there to solvedispute.
If there's no dispute, there'snot much for us to do.
Speaker 2 (07:07):
Oh, duly noted.
So what type of financial lossis resulting from a divorce Do
men encounter more frequentlythan women?
Speaker 1 (07:14):
If the man and I'm going to, say like the wage
earner, because sometimes intoday's society the female will
be the wage earner.
Sometimes we'll have same-sexcouples.
So the wage earner will feellike they are losing part of
their income.
If they have to pay alimony orchild support after divorce,
that's the big one.
(07:35):
If they're the ones that havebeen saving up the retirement
account, the IRA, and it has toget divided, they'll feel like
they're losing half of theirretirement.
If you have someone in themilitary and they realize they
have to give up their pension,or a first responder has to give
up a portion of their pension,they feel like they're losing
(07:55):
that.
So it's just an emotional.
From the legal perspective,that was all marital asset.
It gets divided evenly inFlorida.
Speaker 2 (08:02):
And I have another question.
As you might figure, I'm kindof shifting this and focusing a
lot on men and one of thereasons is, you know, earlier we
did a podcast on divorce but wewanted to do it from a woman's
perspective.
So we had a table full offemales giving us all the tips
and tools and pitfalls from awoman's perspective.
So we want to have you kind ofhighlight from a man's.
So what are some commonpitfalls men should be aware of
(08:25):
during a divorce specifically?
That basically would be for themales.
Speaker 1 (08:31):
Come forward with all the information.
Do not try to hide the ball.
When you try to hide the ball,it will cost you more in
litigation.
You want to avoid the pitfallof having your divorce take two,
three, four years in the courtsystem.
Because if you have a pie andyou have to divide up that pie,
and that pie is money, if youhave to give her I'm saying in
(08:55):
quote, 60%, even though youshould only give her 50%, that
might be financially a betterdeal for you than litigating
your case for two to three yearsand giving her then 50% of the
pie.
And the reason for that is thepie is gonna be smaller because
(09:17):
you've litigated for two orthree years and you've given the
money to the lawyers, you'vegiven the money to the forensic
accountant, you've given themoney to expert witnesses.
So come forward, don't hide theball.
Try to get a settlement early.
Avoid attorney's fees and costs.
Speaker 2 (09:32):
So, from your perspective as an attorney, you
have couples with differentfinancial dynamics.
Some of them have everythingthat's joint, they do everything
together, and then you havethose on opposite stream.
I have my account, you haveyour account.
From your perspective, whichcase, which circumstance is just
better in terms of the processwhen you have couples that
everything is shared or coupleswhere everything's already
(09:53):
separate?
Speaker 1 (09:53):
The process is better if it's already shared, and the
reason for that is because thenyou both can get the documents.
You need to make an informeddecision.
If she has her accounts and hehas his account and you don't
know about them, or if money'sbeen transferred to third
accounts or fourth accounts orbought a piece of property or
put into a 401K.
If you don't have thatinformation, you have to go
(10:16):
chase it.
Then you have to do analysis towatch where the money flowed in
a tracing.
That will take longer and bemore expensive.
If all the accounts werealready together, then you know
you're getting the full picture.
But that goes back to yourreally great question how to
avoid a pitfall.
If your accounts are separate,that's not a problem, as long as
(10:37):
you give full-fledged, honestdisclosures at the very
beginning.
Speaker 2 (10:40):
Are there any consequences?
What types of penalties doindividuals face, whether it's
the male or the female, whenthey are hiding assets?
We see this and we hear this,especially if you're looking at
TV or somebody's withholdingtheir secret account.
Speaker 1 (10:57):
Well, you can get sanctioned by the court.
You're gonna have to pay extraattorney's fees If they're not
disclosed in Florida on yourfinancial after David which is a
sworn statement to what yourfinancial picture is and that is
later discovered the other sidecan bring a motion to the court
to undo your entire divorcesettlement because you flat out
(11:18):
lied.
You brought fraud upon thecourt.
So you could be six months,eight months later and realize,
man, I gotta go through thiswhole process again and judges
don't look too kindly when youlied to them the first time.
Speaker 2 (11:31):
What are you seeing now in terms of a trend?
Are you still finding?
Is it more men filing fordivorce, more women filing for
divorce?
Speaker 1 (11:38):
It actually depends on the age group of it.
There's a lot of women that arewhat we call gray divorce, that
are older 50, that are the onesinitiating the divorce, more
than the men.
Other than that, it's about50-50 when you are at a younger
age group, let's say 25 through50.
Speaker 2 (11:55):
And another new trend that again I'm seeing.
You have individuals or couplesthat are divorcing but then
remaining in the same household.
But my question would be haveyou had couples come to you for
divorce, looked at the financialramifications and then said,
hey, let's scrap this, let'swalk away and stay married
because of the finances?
Speaker 1 (12:16):
Yes, what we typically do in those cases if
we've done what's called apost-nuptial agreement.
Everyone's heard about apre-nup, where you know what's
gonna happen in the money if youget divorced, and sometimes
those pre-nups will have deathprovisions as well.
What happens upon death?
Think of a second marriage.
You wanna leave the money toyour children or grandchildren
so you don't wanna go into yourspouse's children or
(12:38):
grandchildren.
But people come to me.
They're looking at gettingdivorced and the big stressor in
their life is the money.
And we work out a post-nuptialagreement.
You're already married and wedecide how the money will be
handled during the marriage andupon divorce.
So this might be where someonegets an allowance.
You get 15 grand a month.
(13:00):
I'm making up a number to spendand I'm gonna put so much away
in an IRA for you every year andI'll put so much away in a 401K
for you every year and that way, or into a brokerage account
for you every year.
That's in your own name, andthen if we get divorced, you get
to keep those assets that I'vebeen putting money into all
along.
But that lowers the stresslevel of why are you always
(13:20):
asking me for money?
You guys just agree on how muchyou have to spend.
Speaker 2 (13:24):
So you've been to Florida, of course we're in
Louisiana, of course we havelisteners all over the country.
So I wanna ask are there anyparticular laws that you might
be aware of that are notfollowed by every state, because
of course they are gonna havedifferent regulations, but that
you believe would be a gamechanger if all states would
adopt this particular statute?
Speaker 1 (13:42):
So a lot of states deal with child support
differently.
In Florida, by way of example,child support and when a child
turns 18 years old, or they cango a little bit longer if
they're 18, but they're going tograduate high school before
they turn 19 years old, becausethe concept is you don't cut a
kid off from child supportduring their senior year.
Speaker 2 (14:05):
That all makes sense, that would be cruel.
Speaker 1 (14:07):
Okay.
Now some other states say waita minute.
A lot of people support theirchildren after high school.
They support them in college,whether it's a trade school,
community college or an IvyLeague school.
They are a state school.
We're supporting these kids, sothey will require you to
support them for a longer periodof time, and I think that makes
(14:29):
more sense to me, becausethat's typically what parents
try to do to help.
So I think that would do it.
But, like to your point, everystate is different.
Every state can handle it theirown way.
I just think that it createsmore conflict for parents and
kids when they're trying to gooff to college or start out on
their own, and then one parent'slike I'm done Ask your dad, ask
(14:52):
your dad, ask your dad when.
If you're getting child support, then you could maybe help
along the way as well.
Speaker 2 (14:58):
How can parents plan for their children's financial
future, such as college expenses, when they're going through a
divorce?
Speaker 1 (15:05):
Well, there's 529 plans that if they have going
forward, they can make asettlement agreement where they
say both parents will contributeto a college savings account
for their children.
But remember, they're alreadylowering their standard of
living, so they're going to haveto make a choice on what to do
with their discretionary incomeif they have some.
And one of those things is wewant to help our child through
(15:28):
college.
Let's put money aside along theway, and we might not go out to
a fancy dinner, we might not goon a fancy trip on a plane, we
might just drive to the beach ordrive somewhere for the weekend
.
So you can adjust yourdisposable income to say we are
going to do without because wewant to save for the future.
Speaker 2 (15:49):
So, like you said, sometimes the standard of living
changes.
What strategies can be employedto minimize the financial
disruptions for children duringand after a divorce?
Speaker 1 (16:00):
So a lot of lawyers will tell people that might
receive alimony let's say thewoman in this case and say don't
get a job yet.
Look for a job, but don't trytoo hard, and then they'll have
to impute income.
If you want to minimize stress,the best thing you can do is
become self-sufficientfinancially.
So go get a job.
Having more income coming intothe family is always better than
(16:23):
less, and you can minimize yourchildren's stress if you can
help support them, and the wayto do that is to become as
financially self-sufficient aspossible.
Speaker 2 (16:33):
So I want to shift gears just a little bit.
Are same-sex couples thatdivorce immune from any issues,
or do they have issues that aregoing to be different, legal
issues that would be differentfrom heterosexual relationship?
This is easy.
They're all the same, nodifference.
Speaker 1 (16:49):
No difference.
Speaker 2 (16:50):
Okay, so someone is considering a divorce.
What steps should they take toleverage the best financial
outcome?
Speaker 1 (16:58):
It's always easier to get divorced when you have
money that is disposable incomeand you realize that you don't
want the lawyers in the conflictand the forensic accountants
and the experts that eat it allup.
So if you want to prepare fordivorce, the best thing is to do
is get your financial house inorder, which is the things
people should be doing on adaily basis anyway.
(17:19):
Don't carry credit card debt.
Have savings.
Save for retirement, save foryour kids' college.
Live within your means.
Live within your means.
That is the best way to savemoney when you go through
divorce, because then you cometo the lawyer and say look, we
have all assets.
We have no debt other than ahouse and a couple car loans.
Here's what we think we shoulddo with the house.
(17:41):
Our kids are in high school.
We want to keep the house foranother two years, let them
graduate.
Then we're going to sell itbecause the interest rates are
high right now.
We don't want to refinance.
There's all sorts of things tobe creative so you can minimize
the negative financial impact.
Speaker 2 (17:58):
And I'm going to use your words Live within your
means, because that's a seguefor really the criteria that I
use all the time for developingand having good credit habits.
What impact does divorce haveon credit?
It can be devastating.
Speaker 1 (18:13):
And the reason it's devastating is if you're going
through a divorce and you aregoing to make it contentious and
you guys are going to fight andargue and not be forthcoming
with information, you are goingto drive up your attorney's fees
.
I've looked at thousands, tensof thousands, hundreds of
thousands of financialaffidavits budgets.
(18:33):
Nobody has ever once had a lineitem in their daily budgets for
divorce attorney.
So when you're running up thatbill, something's got to give.
You're putting it on a creditcard, you're maxing it out, you
are depleting a retirementaccount, a 401K, a brokerage
(18:55):
account, maybe your kid'scollege savings goes to the
attorney and now you're going tosend my kid to college and not
yours.
So it can be devastating.
You could miss a mortgagepayment, you could miss a car
payment, and that's when thingsare real bad.
Speaker 2 (19:10):
And how does it handle?
You know, I've seen situations.
Individuals have come in andsay, hey, I'm in the middle of a
divorce, or I got a divorce andhe's responsible for the
mortgage, and of course you'reseeing the late payments on
there.
How can you, as an attorney,what impact do you have on that?
You know, because obviouslythey may call you and say, hey,
they're not paying the mortgage,it's their responsibility.
(19:32):
What can be done in thosesituations?
Because I do see that time andtime again.
Speaker 1 (19:37):
I move as quickly as I can through the court process,
and in the court process and inthe divorce, you can only go as
fast as the slowest person orentity.
So if I'm ready to go to trialtoday, and so is the other
lawyer and so are the party, butthe judge doesn't have a trial
date for six months, there'snothing the lawyers can do about
that.
So what I do is get theinformation we need right away,
(19:59):
file our motion to require thepayment of the mortgage, go to a
mediation which is I'm requiredto do and go to that hearing as
soon as possible.
And I just described in amatter of seconds could take six
months.
Speaker 2 (20:14):
Wow, that's a pretty long time and a lot more
delinquencies can kind ofdevelop and add up.
So we prepare for marriage, wesit down and we think about
preparing for children.
How do you prepare financiallyfor divorce?
If you're on the fence and itlooks like this is the path that
you're going, what's your bestadvice?
(20:34):
Is there a checklist?
What are some things you said?
You know, get your ducks inorder, get rid of the debt that
you have.
But what else?
Financially, what's the bestthings that I can do to get
myself ready for a divorce?
Speaker 1 (20:46):
Get all your financial information together.
Pull your credit report.
Make sure you see where all thedebts are.
If there's mistakes on it, getit cleaned up.
If there's small credit cards,get them paid off.
Close them if you can, soduring the divorce process
people can't run up bills onthem.
Make sure you're getting allyour financial statements from
(21:06):
your bank accounts, your creditcard accounts, your brokerage
account.
I would get the last six monthsto a year.
Make sure there's been nowithdrawals of substantial
amounts of money that seem alittle odd, Like wait a minute,
where did this 20 grand go?
Right, that type of informationgathering early, just slow and
steady.
You don't have to do it all inone weekend.
(21:27):
That will help you get thefinancial picture in order and
will save you time and moneywhen you go to a lawyer and say
here are all my documents,here's the asset, here are debt,
here's what I think shouldhappen, but tell me if I'm
complying with the law.
Speaker 2 (21:43):
Can a couple get divorced without having an
attorney at all?
Speaker 1 (21:46):
Absolutely.
There's no requirement and thestate will not provide one for
you.
Speaker 2 (21:50):
What are the pitfalls , what are the disadvantages?
So I go that route.
Well, when you buy a house, youhave a realtor.
Speaker 1 (21:57):
The realtor has a broker.
You have an inspection.
You have someone that's theclosing agent.
You have, maybe, a lawyer toreview the contract.
When you're getting a divorceand you're dividing up your
assets and debt, you're signinga contract If their kids
involved.
You're signing a parenting plan, potentially or you're going to
a trial, which is very complex.
So I am a strong believer thatthe client makes the decision on
(22:21):
the ultimate outcome in asettlement.
If the other side agrees,that's fine, even if legally
they could get more in court.
I respect my client's right tohave ownership and make that
decision.
They can give away the farm andavoid trial.
It's my job to let them know.
Listen, you're giving away thefarm, that's okay.
(22:41):
I will share it with my owndivorce.
Many, many years ago over 17years ago my lawyer sat me down
and said Seth, you can do betterin court, you do not have to
give up this money.
And I said I don't care, I'llgo make more money in the future
.
I want to make sure that myformer spouse stays in this
(23:01):
house because it's good for herand it's good for the kids to
stay in the school district.
But my lawyer did a good job bysaying under the law, you can
do better, but it's your choiceif you want to do this now.
That's why I think you need alawyer, so you understand what
you're giving up or what you'reentitled to, and then you make
the decision.
Speaker 2 (23:22):
Of course today we have lots of people getting
remarried.
I heard you mentioned you'redivorced and you're remarried.
Is there something that aperson needs to keep in mind if
they're getting the divorce?
Maybe they don't know thatthey're going to find somebody
else down the line that theyshould really think about and
prepare for during this divorce.
That will help them before theyget married again.
Speaker 1 (23:43):
So in Florida the big issue on that is alimony.
If you're receiving alimony andyou get remarried, your alimony
terminate, boom done.
So if you're thinking aboutgetting remarried and someone's
willing to pay you alimony for10 years, you might say I'll
take it for five years.
(24:03):
But I want you to pay me morenow over five years on a monthly
basis, but you don't have tomake the last five years of
payment.
So I'm only going to get reallylike seven years of alimony, if
you added up the numbers.
But I'll take it in fiveinstead of 10 because then, boom
, you get married on your sixthyear.
You would have lost the lastfour years anyway.
Speaker 2 (24:24):
And if you are looking at a second marriage.
We typically think of pre-nubsfor really wealthy individuals,
but it seems like the waters canget really, really murky when
you have your first wife and youhave those kids and now you
have your second wife or secondspouse and kids.
What can a person do ahead of asecond marriage Again, just in
(24:46):
case things go sour again, justto not make it so chaotic and
complicated if you have to do asecond divorce and how often do
you see second and thirddivorces with the same
individual?
Speaker 1 (24:58):
Oh, I've seen that before they get married, they
get divorced.
They get remarried.
I've seen that I've divorced aguy more than once to the same
woman, right.
So here's the deal.
Divorce aren't bad, they'redifficult to negotiate.
Because you're in love, you wantto get married, you think
you're going to walk the rest ofyour life on this earth with
them and you're talking aboutwhat happens if we split up.
(25:19):
That's not a fun conversation.
Someone always feels like, well, you're just marrying me for my
money, and the other one feelslike, well, you're not even
taking care of me when I'mstepping out of my career to
stay home for 10 years and I'm35.
Now we're going to havechildren.
I'm going to be out of theworkforce for 10, 15, 20 years,
five years, whatever, and now Igot to get back in.
(25:40):
That's hard to recoup thatearning potential that you've
given up.
So I'm in favor of prenup.
The reason I'm in favor ofprenups when you get married,
whether you like it or not,you've entered into a contract.
The issue is you don't know theterms of that contract, because
alimony changes based on thenumber of years you've been
married.
Alimony can change based uponincome.
(26:01):
Alimony can change based uponwhether you help support your
spouse going off to school andyou stayed home and raised the
kids.
There's all these things youdon't know because you just
haven't lived it yet.
You don't know how long yourmarriage will last.
You can get married and say wewant to know the terms of this
marriage contract and that'swhat a prenup does.
(26:22):
If we're married for zero tothree years, you get X number of
dollars in alimony.
If we're married from three tofive years, you get Y.
If it's more than five yearsbut less than 10, you get Z.
You can define those terms.
The law doesn't for you anyway.
You just don't know what thoseterms are when you get married
without a prenup.
You can define them when you do.
Speaker 2 (26:42):
How do we start over financially?
What does a financial recoveryplan look like after we divorce?
Speaker 1 (26:48):
Live within your means.
You're going to cut back.
You are not going to have allof the wonderful things that you
might have had during marriage.
It's going to be tough.
You're going to have to justscale back and really focus on
what is important Spending timewith your children, spending
time with your friends.
Even if you can't afford to goout with ladies night and to
(27:09):
fancy dinners or on trips, findother ways to fill your time
that is less expensive.
That is the single best thingyou can do, because you need to
start.
You're going to feel like youjust lost half your wealth or
you're going to be a pile ofdebt.
If the debt's that bad, youmight want to consider
bankruptcy to wipe the plateclean and start again.
(27:33):
But get financially healthy.
Live within your means.
Do what you can do to save forretirement.
Speaker 2 (27:39):
And I echo everything that you just said.
Those are words that I live by,Live within your means.
Well, Seth, thank you so muchfor sharing this information.
Hopefully, this will help easethe burden of somebody that's
looking to get a divorce orgoing through a divorce and know
what to expect before, duringand after.
Speaker 1 (27:57):
Well, I really appreciate you having me on.
I hope listeners found ithelpful.
You're asking all the rightquestions and that's step one.
Speaker 2 (28:05):
So, seth, you actually have a podcast about
divorce.
Tell us a look.
First Tell us the name I lovethe name and then tell us a
little bit about the podcast andhow our listeners can find it.
Speaker 1 (28:16):
You're so sweet, so it's called how to Split a
Toaster A divorce podcast aboutsaving your relationship.
You can find it wherever youlisten to your podcast on any of
the platforms out there.
You could Google how to split atoaster.
We're coming up.
We love it.
It's doing exactly what you'redoing.
You focus on the financialmatters.
We focus on not just divorce.
(28:38):
We will focus on every aspectof divorce.
We've had podcasts on datingafter divorce.
We've had podcasts on handlingfinancial matters All the
questions you're asking todayduring a divorce.
We've had podcasts on who getsthe dog and how do you decide
what's best for the dog asopposed to for you.
So we try to bring a lot ofhumor to it, because divorce is
(29:01):
hard enough.
Take a listen If you find ithelpful.
Listen.
Download other shows, listen tothose.
If it's not helpful, don'tlisten.
It's just that simple.
Speaker 2 (29:13):
I've listened.
I enjoyed it Again.
I love the title how to Split aToaster.
Again, thanks so much forjoining us.
Speaker 1 (29:21):
Thanks for having me.
Speaker 2 (29:28):
Navigating a divorce can be emotionally and
financially challenging.
Making sound financialdecisions during this time is
crucial.
Here are some financial tipsfor couples considering or
undergoing a divorce.
Avoid making big financialdecisions immediately.
Amid the emotional turmoil of adivorce, it might be tempting
to make significant decisionsbased on your emotions.
(29:48):
So give yourself some time andspace to clear your head and
think rationally.
Hire a financial advisor,especially if your finances are
complex, as you just heard.
It may be children involved, itmay be additional spouses, it
may be businesses included.
So hire a financial advisorjust to make sure you cover all
(30:09):
your bases.
Then understand your ownfinances.
Review all of your financialaccount assets and debts.
Create a budget based on youranticipated post-divorce income.
And again, we can't say itenough Live within your means.
And for more information, youcan check out neighborsfcuorg To
learn more on how to use themoney you have.
(30:31):
Make the money you need andsave the money you want.
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