Divorce Rich with Jacki Roessler, CDFA
Welcome to the Divorce Rich Podcast! Join your host, highly sought-after speaker and experienced Certified Divorce Financial Analyst, Jacki Roessler, CDFA in this engaging and down to earth show. Along with her guests, Jacki offers clear and detailed advice to improve your financial decisions before, during and after divorce so you can survive divorce rich! New episodes are posted every other Thursday! You can reach Jacki through her Michigan-based firm, Roessler Divorce Consulting, located at 600 S. Adams, Suite 300, Birmingham, MI 48009 or by email at jacqueline@roesslerdivorce.com.
Divorce Rich with Jacki Roessler, CDFA
Financial Infidelity with Divorce Attorney Amy Byer
Grab some coffee and listen in as Jacki sits down with family law attorney, Amy Byer for a candid and frank conversation about the importance of financial transparency in romantic relationships. Discover how financial infidelity—often as damaging as adultery—can erode trust and stability within a partnership. We'll break down why financial honesty is essential and how hidden debts and poor money management can lead to significant consequences, particularly for women who may be unprepared for financial realities.
Learn why financial issues and infidelity are leading causes of divorce and how regular, open communication about money can fortify trust and intimacy. This episode is worth a listen for anyone in a relationship!
- Click the link below to reach out to Family Law Attorney, Amy Byer, https://amybyerlaw.com/
- To schedule an initial 30-minute complementary consultation with Jacki, click here https://calendly.com/roessler-jacki/30min?month=2024-08
- For a helpful guide to starting financially intimate conversations with your spouse, click here https://institutedfa.com/crisis/
Visit us at https://www.roesslerdivorce.com/ to learn more about Jacki's practice and to find valuable resources for your case.
Welcome to the Divorce Rich Podcast. I'm your host, jackie Ressler. I've been a certified divorce financial analyst for 28 years, helping clients and their attorneys navigate the often complex and confusing financial issues in divorce. If you're in the process of, or considering, divorce, now is the time for you to take a deep breath and give yourself permission to find clarity on the financial issues you're facing. Rich means many things to many people. I believe the best definition of being rich is someone who has access to many resources. Along with my guests on this podcast, I will be bringing you a wide variety of information so that you can make sound and informed financial decisions for your financial future. Hi everyone, and welcome back to the Divorce Rich Podcast.
Speaker 1:Today we have a very intriguing topic. We are going to be talking about something that applies to people who are in a relationship, people who are married, people who are getting divorced, people who have been divorced, so basically, just about everyone that's in a relationship with someone else. We are going to be talking about financial infidelity and financial intimacy in a close relationship. My guest today is family law attorney Amy Beyer, and she has an interesting perspective on this topic. I'm happy to welcome her to the podcast today. Hi, jackie, thank you for having me. So let's talk about financial infidelity. First of all, how would you describe how you came up with that term? How would you?
Speaker 2:describe how you came up with that term. Yeah, I don't know how it, how I came up with it, but I think it goes probably hand in hand with all different kinds of infidelity, you know, with you know adultery, right, things like that. I think it's going to go hand in hand with just overall secrets and dishonesty. It's going to go hand in hand and I would describe it as the flip side of financial infidelity would be financial intimacy, and we can talk about that later. But you know there's, you know there's, you know relationships that have all different kinds of intimacy. But you know, now I've realized, after doing this for so many years, that part of a successful relationship is having financial intimacy and not being afraid to talk about finances and share about finances and be very, very transparent regarding finances. And it's a tough subject for a lot of people, including people who've been married for a long time.
Speaker 1:I agree. I think that of all of my friends even. First of all, I think that financial transparency or openness is a difficult topic for women to talk about with other women even and I don't want to stereotype, because I think that sometimes there are men that are not in the know about their finances but I think that as women, we're conditioned that money is a taboo topic. It's not something that everyone shares with their friends, even.
Speaker 2:Definitely they don't. And they say don't talk about money, don't talk about politics or religion, and it's up there with those things that you don't really talk about, and that's okay, you don't have to talk about it with your friends, but you do need to talk about it with your partner and it's uncomfortable. And I also think you know not to be again, not to be sexist, but we as women, you know, biologically there's like this we want to be taken care of, or there's a sense that you want to be taken care of, and by somebody else, and it's, you know, whatever, you know tradition or culture or hierarchy through the years, but women want to be taken care of. And so if, out of sight, out of mind, you know oh, got my house, got my car, my kids are taken care of, I can do a little shopping. Got my car, kids are taken care of, I can do a little shopping, I swipe the card at the hairdresser, all good, and and no, and, and that's, you know that gets them through the day and that's all good.
Speaker 2:And I just don't know if, in terms of financial infidelity, I think of it in terms of not just it's not just hiding money or hiding finances, it's also how. How are the finances being managed? Are they being managed in a responsible way? Do you think that enough money is being put away for retirement? Do you think enough money is being put away for college? You know is somebody you don't know. Are they borrowing from Peter to pay Paul? How do they meet their monthly and yearly taxes? How are all these obligations being taken care of?
Speaker 2:And I think a lot of us and a lot of people can be very short-sighted and you're like well, I go to the grocery store and there's money, and I go here and there's money, and we travel and there's money. But really, is there money? Is there? Do you know what's really funding all those things? Is it going on credit cards and accruing interest? And you know it looks like you have money but you don't have money. Right, there's a lot of people that they look like they have money and they have no money. Exactly, there are so many people.
Speaker 1:I mean, and I see them. You know, as a financial advisor working with people that are getting divorced, I have a very financially intimate relationship with my clients because I know everything about their, everything about their finances. And there's so many people that make a lot of money, they have a very high income and they don't have any assets. So when it comes time to being divorced, let's say, or that if one spouse passes away and the other one wasn't in the know and they just are used to living this lifestyle without knowing, like you said, what's funding it. And are we funding it in a way that's smart? Are we just spending every penny that we have? And I think that's where women, we live longer than men, statistically so, and with the divorce rate and people always throw around that number of 50% of marriages and in divorce, at some point in our lives as women we are going to be most likely managing money on our own, and so when there isn't financial fidelity or transparency with couples, it just it adds to so much stress in life later on.
Speaker 2:It adds for stress later on. There is a cost to it, right? I mean, you can go about your day and you're like everything's working and everything seems like it's functioning, and it looks like there's money, and now the bills are getting paid and this and that, and then I don't really need to look into it or ask any questions and I'm just going to trust my partner that they're doing all the right things. But there's also going to be a cost to having that sort of attitude. Right, it's hard talking about money. It's not sexy, it's not comfortable. It's not sexy. It's a super high level of adulting that a lot of people don't want to do. Love that A high level of adulting?
Speaker 1:Yeah, no, it is. It's definitely a skill set that you have to practice. As far as it not being sexy, I don't know.
Speaker 2:I think that once you get into the habit of talking about money and both people feel empowered in a relationship, I'm assuming a lot of men need to feel safe in a relationship, and that's another piece of it that helps women feel safe and comfortable Right exactly so.
Speaker 1:I have been in a relationship before that there wasn't financial intimacy and that ended up leading to the end of that relationship. What do you, from a divorce attorney's perspective, if somebody comes to you and they are considering divorce, so that they're not at the place yet where they're definitely going to get divorced and financial intimacy or lack of intimacy is an issue, how do you counsel them? Or what would you counsel a friend that came to you that you know they're unsure about their finances and their inner relationship, where someone else is taking care of everything?
Speaker 2:Ransack the house and dig. No, in a practical sense, you have to look for things right. But I do. I tell my friends most people you know, at least my contemporaries have a financial advisor or have an accountant or somebody that they're working with, and do those meetings with your spouse, do those meetings with your partner, if they're talking to them, you know, quarterly or twice a year. Be completely involved in those conversations. Look at the tax. Don't just sign the tax returns, you know. Look at those tax returns.
Speaker 2:You're going to have to maybe understand them, ask a lot of questions, talk up, sit down with your partner with their pay, stop and look and see where what's coming in. What's the net dollar amount? How much are you paying for insurance? Is anything going towards a 401k or a retirement? Or how much money? Do a budget? Do a budget with your partner, right, and that creates that financial intimacy.
Speaker 2:So what I do have to say, jackie, one of the very good things that I have to say, and I don't know I mean I'm assuming I'm not, you know, the only family attorney who would say this. But you know, when I started doing family law, like 15 years ago, there were a lot of women who you asked them. Okay, you know, they knew where their joint checking account was and they could tell you that we bank at Chase. And then you would say well, what about the retirement accounts? And they look at you like a deer in headlights, like they don't know anything. They don't know retirement accounts, they don't know how much their spouse made. They don't know really anything but I. But I'm not finding that so much anymore.
Speaker 1:Yeah, I think there's a definite shift and so when I first started, you're right, a lot of people they didn't know what those things were. So I don't know if that's because and again, I don't want to be sexist, but traditionally I find that women are the ones that aren't as informed about the financial issues in their own life. Maybe they're reading more online about those things, maybe there's more information available. I don't think it's necessarily because there's more communication between the couple, although maybe there is. I love your idea.
Speaker 1:To me, every financial plan should start off with a budget and a budget. Whether you're married or not married. A budget isn't restrictive. A budget gives you power to make choices. So when you kind of have an idea on paper that this is what we're spending on, let's say, eating out, you might have a sense of it. But when you see that on a budget and you're actually looking from real information whether you're going back to your credit card statements or bank statements people are always shocked at what they spend on some of these things and you think, if I had to make a choice, would I rather go out to eat every night or would I rather go to Italy? Would I rather retire a little bit earlier, and so a budget is to me like the cornerstone of everyone's good, strong financial plan.
Speaker 2:Right and I think the financial infidelity is it happens with opportunity, right? You can't really have financial infidelity unless there's an opportunity to do it. So if somebody is very involved in the finances, then there's less opportunity, because you have a checks and balances and you have to be accountable because you're sharing everything and it's transparent and you have to see it and the credit card bill comes. Or you look at the checking account and you say, whoa, what's going on here? What was this for? So there's, you know it's almost like you could be each other's big brother in making sure that people are doing what they're supposed to do and people aren't going off the rails.
Speaker 2:When financial infidelity occurs is when you have this trust in somebody else that I know they're taking care of it, I know they're doing the right thing, and most of the time, either one spouse doesn't want to know what's going on and they just take somebody's word that they're doing it right, or the opportunity exists because they control so much. They are not a W-2 employee and they're getting the same dollar amount direct deposited into their checking account every two weeks. They are a business owner, they have investments left and right, their income fluctuates and there's so much power in that and then that can create an opportunity for financial infidelity. You don't have anything to do with your spouse's business. You don't know what they're doing, you don't know how they're paying the bills in the business, you don't know what they're borrowing or getting a line of credit or signing up for in the business on the other side, because you could have your own career doing something else. And then you don't know till you know.
Speaker 1:Right, exactly, I think you know, just to play devil's advocate a little bit, I think that there can be a fine line too between that communication about like what did you spend? Like let's look at the credit cards together. There's a fine line between communication and transparency and somebody controlling someone else. So maybe the difference is if it goes both ways, if you're sitting down and you're each asking each other you know what, what it was this charge for. But I found for a lot of my clients that are divorcing, they've been in a position for years where they get text messages from their spouse or phone calls are like what were you doing at target? What were you, you know, doing at Target? And to the point where it feels like that is almost a form of abuse or control in that way.
Speaker 2:For sure, for sure. And I have to say that when I do cases where each of the parties have their own checking accounts and they haven't merged their money in that way, and then it forces them to have that financial intimacy and say, well, what percentage should we split the mortgage? 50-50?, are you going to pay a little bit more because you make a little bit more? It almost forces people to have those hard conversations because you've got your nest egg over here and they've got their nest egg over there and you could be in the same. How about the same road but different lanes?
Speaker 1:Yeah, absolutely, that's a good point and they haven't.
Speaker 2:I mean, we know, legally their money is commingled and we know legally it's marital property, but they haven't in a practical sense commingled their money. And then they've had to really talk about well, we're not going to have a joint account, so how are we going to pay for these marital expenses? And in some ways I kind of like those cases a little bit better, because everybody's knowledgeable.
Speaker 1:Right.
Speaker 2:Everybody's knowledgeable. You may not know exactly what's coming in and out of that checking account, but at least with the marital expenses, they know what's going on with marital expenses.
Speaker 1:Right, Exactly, no, you're absolutely right. I have several friends that they think that their money is separate because they keep it separate. So, like you said, legally it's non-separate. The law sees it as you know. If you've been married for 20 years and you've got your bank accounts and your spouse has their bank accounts, they're all marital. But for a lot of couples like that's how they mitigate arguments about money is okay. Well, let's just keep our money separate from cash flow. Like you said, we'll agree who's going to pay what bills and then you're going to spend money on things that I don't agree with, and that's good, coming out of your money and not my money, and that is a way to help avoid some arguments about money.
Speaker 2:Yeah, and you know it's like a lot of things, like some laws haven't really caught up to how people are really doing things Right and you get into this. You know you change your legal status when you get married and a whole bunch of laws are surrounding that legal status and all you did was sign a piece of paper and there's no education of what that really means, what you're really signing up for. You know you don't sit down and just sign a will without reading it. You don't sign a lease without reading it. You don't sign, you know, a purchase agreement for a business or a piece of property without reading it. But we just sign marriage licenses and we buy a pretty dress and we go and have a big party. You know, and then there's no education about what are you really signing up for and what are your. You're changing your legal status, your rights are changing and in some ways it's good for some people and it's probably not good for other people, depending on where you stand. True, true.
Speaker 1:So let's talk about this. Let's talk about not a couple that's been married, but how about a couple that is considering getting married and let's say that they've already you know so many remarriages. Now people are already established in their life financially and they're merging together to, you know, to to full lives that have adult children, maybe that have you know, their own finances. What would you recommend for people coming to you that they don't know anything about their new legal status training? Do you recommend a prenup? Yes, and what are the advantages? Do you think of having a prenup?
Speaker 2:So a prenup is just think of it as a pre-planned divorce. Right, your divorce is already laid out for you. You're pre-planning the divorce without hoping to get divorced, but you're pre-planning your divorce and there is a total disclosure of everybody's assets at the time of marriage. And one of the benefits of doing that is, again, it creates that financial intimacy. Yes, it gets people to determine, you know, if this relationship doesn't work out today while we care about each other, let's make these decisions before.
Speaker 2:You know, when you get involved in a divorce, things can get really, really ugly. You could take a stand or something that just is so disrespectful and so belittling to the relationship. So when you do it beforehand, at a time that you care about each other, you're thinking more straight, you're less emotional and you can pre-plan this divorce and something that makes sense. Both people have attorneys, good representation, good transparency, and you come up with a plan and hopefully you never need it 50% will and if it's a second marriage, 75% will. And it's tricky, it's higher yeah, it's like close. Yeah, it's in the 70s, and also it's trickier right when you're getting married later in life and you've got children and you've got grandchildren. So not only do I think a prenup is very appropriate in those circumstances, but so is good estate planning.
Speaker 1:I agree Absolutely and I think that again, those are, and maybe people can think of it, because I know there's a lot of negative connotation around getting a prenup. Like you said, it's laying out the exit plan instead of thinking positively that you're going to be together forever, but maybe putting more of a positive spin on it. It does encourage financial transparency. You're starting off from a place where everything is being disclosed and so you can maybe get a head start on making it work. If the two of you both have all of your finances laid out in front of you. How many people, when they get married, actually do that? Have sit down and say this is everything that I have, these are my expenses, these are the commitments that I've made. I have a retirement account, a pension that I've already given to a former spouse a part of it, I mean.
Speaker 2:I don't think those conversations necessarily help it, and I think it could be. You know if you're looking for it and you see it and you're thinking straight. If somebody isn't willing to do that, then that's a red flag and maybe that's a road you shouldn't drive down. If they're not willing at the beginning of a marriage or right before getting married, laying it all on the table and showing you everything and explaining everything and being super transparent, well then that's a problem.
Speaker 1:I agree, I do so. I'm just curious. I know you have daughters and I have a daughter and a son. Are these things that you think are? I mean, I think it's appropriate to talk to our teenage, young adult children about how to protect themselves financially in a relationship. What are your thoughts? I know that's a little bit off of our topic.
Speaker 2:It is. Yes, I have daughters. I mean, I don't know if it's a function of me being divorced myself or if it's being a family attorney and doing this for so many years. I have my own kind of thoughts about marriage and my issues with marriage and the institution of marriage, but aside from that, it's super important for everybody to be able to have a way to support themselves and to set themselves up so that, if and when the rug gets pulled out from under you, that you are not going to crumble, that you are always going to be able to take care of yourself.
Speaker 2:And a lot of that is talking to your young children about money and what it takes to have a home and a car and insurances and how expensive things are. And education is expensive and taking care of yourself is expensive and raising a family is expensive and making sure that we don't raise children with the mindset that it's okay to just be dependent on somebody else financially. I can't think of anything actually more scary. If I ever turned around and one of my adult daughters was financially dependent wholeheartedly financially dependent on their spouse, it would be a huge disappointment to me.
Speaker 1:And I think maybe just I mean different again, in marriages sometimes you make choices and there are times that one person does take a backseat in terms of earning or in terms of involvement with the finances. But I absolutely agree with you that being wholly dependent on someone else for your livelihood and having no plan of what you're going to do if things don't turn out the way you had expected, life gives us all kinds of surprises. I think that's terrifying. And back to your point of let's look at the taxes together, let's look at our pay stubs together, let's talk about our budget. Are we setting enough aside for retirement? I would even say not just going to meetings with the financial advisor, but also asking a lot of questions why are we invested in this? How did you pick this asset allocation for us? I mean, those are all things that both people need to be involved in.
Speaker 2:Yes, and marriage is for adults and you have to do adult things. And when you're watching, you know, when you go to the movies and you go see a cute rom-com, they're not showing the couple going to the financial advisor or looking over taxes. Right, it's a fairy tale. It's just you're watching a fairy tale and I think that we have to teach our children that. It's almost like social media. Right, it's just not real. Whatever you're looking at isn't real, it's filtered, it's one perception of what somebody wants you to see. And it's the same thing with this whole fairy tale of marriage. It's a lot of hard work, it's a lot of communication, and it's communication about a lot of things that are just uncomfortable. And when you are going to be intertwining yourself with somebody that intimately, physically, financially and emotionally, you have to be comfortable being uncomfortable.
Speaker 1:Right.
Speaker 2:And talking about the hard things.
Speaker 1:Right, I agree. And money? You know most of that. Most divorces are caused by financial problems or infidelity or more traditional infidelity. Those are the two main things that I've seen in 28 years from us.
Speaker 2:For sure, and I think a lot of it goes hand in hand. A lot of it goes hand in hand because, again, there isn't the education that well you know when you are married and if you're going to get divorced, what you spend on an affair partner is not that's going to be your debt, that's not part of the marital debt or the marital expenses. So people don't know. And then that financial infidelity winds up creeping itself back into the marriage and then you have to kind of reclaim and do you have to claw back all that money that was spent on somebody else because they were physically committing infidelity and they were also financially committing infidelity? So a lot of times it's going to go hand in hand. But I think you're talking about like the bigger picture, like you think money's here, you think money's there, you think money's being, you know, spent on, you know funding retirement and funding college accounts, and you think that there's a, there's a pool there of money. That's right, it's not there. It's just not there.
Speaker 1:Right, or there's a lot of debt that I mean and that I see. A lot too. There's a lot of debt that you had no idea about. One of my friends, a family member of hers, found out after her spouse died that there was a lot of debt that she was unaware of and that created a whole other layer of grief over. You know how they were left out of that decision and that was hidden from them.
Speaker 2:So I think yeah, I think overall, I mean we have to just be defensive and you have to be defensive. I mean the emails and the letters come in the mail. You know you're entitled to that. You can get this amount of credit. You can get that amount of credit. Open up this credit card. We'll give you, you know, 80,000 miles if you put $10,000 on your credit card in the next three months or whatever it is that they're using to entice you in.
Speaker 2:And you don't need your spouse's approval or permission to do these things, these things. It's keeping up with the Joneses. It's not being honest, it's hiding things. To think that with the I think a lot of times people's intention is that they think they're doing the right thing. You know I'm not making them worry. I'm not going to make my. I don't want my spouse to worry about the money and that. You know it's my business, hasn't been doing well, but I don't want her to worry and I don't want her to change the things that she's doing for herself or the kids. And but at the end of the day you're just digging a bigger ditch Because if you're in it together and you're swimming in that pool together as a couple, again you have to have that financial intimacy in order to get through the good times and the bad times together, right, and to support each other through that, right.
Speaker 1:Okay, so, amy so we could talk about this for hours, probably. What do you think we should do to help fix this problem, whether it's for our children, our friends, I think for some I mean listen.
Speaker 2:I think if somebody wants to learn it, they can learn it. The information is out there. And if you're looking for a cautionary tale, there are plenty of cautionary tales for those spouses that aren't sure what's going on in their marriage financially. And find out the information and get everybody at the table and really say this is changing in our relationship and this is non-negotiable, like this is changing in our relationship. I need to know everything, but I think overall, you know it's hard to get people to change their. You know, old habits die hard. So we need to raise a new generation of children and girls and boys and let them know that that is being respectful and polite and being honest, and those are important things in a relationship. So you have to be comfortable talking about money and sharing the financial aspects of your relationship with your spouse.
Speaker 1:Thank you so much for coming on and sharing all of your relationship with your spouse. Thank you so much for coming on and sharing all of your wisdom. I'll have to have you back again and we'll talk about some other things, but I mean I could talk to you for hours about this topic and lots of other ones. So thank you.
Speaker 2:Thanks for having me, it was fun.
Speaker 1:Thank you so much for taking time out of your day to listen to Divorce Rich Podcast. If you like this podcast, please follow us on Apple or anywhere that you download podcasts and share this link with any friends or family that you think might benefit from this information.
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