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 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 Wisdom for Divorce: Mastering 401(k)s and IRAs with Kali Hassinger, CFP
Unlock the secrets of managing your financial future amidst the challenges of divorce with our latest episode featuring certified financial planner Kali Hassinger, CFP®, CSRIC® from the Center for Financial Planning. We dive into the world of defined contribution plans like 401(k)s and IRAs, revealing the tax advantages they offer and how they can lower taxable income while boosting long-term savings. Callie's expertise sheds light on the complex rules surrounding 401(k) withdrawals, loans, and vesting schedules, providing clarity on these crucial financial tools during a divorce.
With practical advice and an emphasis on the importance of a detailed post-divorce financial checklist, this episode equips you with the tools to navigate the post-divorce financial landscape with confidence.
- Kali Hassinger, CFP®, CSRIC®, is a Senior Financial Planner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® in Southfield, Michigan. To schedule an intro meeting with Kali, CLICK HERE
- Kali joined the Center team in 2013 and has been involved in the financial planning and insurance profession for her entire career. Kali works with many individuals post-divorce to develop a financial plan with their new circumstances and best interests in mind. The financial planning process focuses on all the aspects of your financial life, including, but not limited to, investment management, retirement, and tax planning. Kali works to help clients feel confident and secure knowing that they have a partner who can be trusted with any of life’s financial decisions. Kali is a Chartered SRI Counselor™ meaning she can give advice on socially responsible investing. She completed the Certified Divorce Financial Analyst (CDFA®) curriculum and successfully passed the three levels of testing in 2017.
- To schedule an intro meeting with Jacki to discuss pre, during or post-divorce consulting and see if you're a good fit, CLICK HERE
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, Jacki Roessler. 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.
Jacqueline:Rich, means many things to many people.
Jacqueline: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.
Jacqueline:Hi and welcome back to the Divorce Rich Podcast In 2025,. I'm really excited to be sharing some basic financial information, because I get questions all the time from clients about the basics on investing and assets and I don't always have time to delve into those topics and give them the kind of attention that they really deserve. So when I have questions about financial planning, I look to certified financial planners that I know, that I know are very qualified and that I've worked with personally that are a wealth of information. So my guest today, Kali Hassinger, is a financial planner. She's a certified financial planner at the Center for Financial Planning. She has been in financial services her entire career and she's been at the center for 11 years, and I worked with Callie when I worked at the Center for Financial Planning years ago and she has worked with many of my clients post-divorce and has taken such great care of them. I always get amazing feedback from clients about her health and I use her a lot as a resource. So, Kali welcome.
Kali:Jackie, thank you so much. I'm so excited to be here today. I love your dedication to educating your clients and I think you and I have always aligned on that. So thank you for having me.
Kali:When I try to explain to clients the difference between working with a financial advisor that just does investment management and a financial planner, I always use the center as an example. You are a holistic financial planner to look at the whole financial picture for clients and you are not just managing money, even though you do that very well also.
Speaker 3:Yes, Very dedicated to that financial planning term and looking at every aspect of someone's financial life and divorce. Can you know in your experience divorce can change all aspects of that, from taxes to investing to budgeting, and we always are really dedicated to looking at all of that with our clients.
Kali:Let's get right into it. The topic that I wanted to cover with Callie today is retirement accounts and all the different kinds of retirement accounts that there are in the investment world and the different ways that they can be divided, the ways that some of them can't be divided or they are divided with more difficulty, and just the ins and outs. So let's talk about basics and we're going to be focusing on defined contribution plan retirement accounts, so the kind of account where you put money aside and it grows tax deferred. So in general, callie, why would somebody let's say that they're not getting divorced? Why would somebody want to put money into a retirement account like this?
Kali:The tax advantage nature of retirement accounts is really the draw, and that is for both pre-tax. So your traditional 401k, traditional IRA, pre-tax, so you have not paid any tax on that money. So there's both the short-term aspect of that money and those contributions and then the long-term picture. Why someone would want to use any of those accounts is because of either the benefit of a tax deduction or future tax-free withdrawals again depending on which account you choose.
Kali:Okay, so let's say that I work for a company and they offer a 401k. What are the tax benefits for me as an employee of putting money into that 401k?
Kali:So with the traditional 401k you are able to reduce your income for tax purposes by the amount that you've set aside in the 401k. So using really round numbers, say your salary is $100,000 and you put 10% in your 401k, so that means $10,000 out of your 100 will not be taxable to you that year. So on your tax return you know your taxed or your income is $90,000 for that year. That $10,000 you set aside is now in your 401k and able to be invested for the long term. Got it Okay, that's a big benefit.
Kali:Yeah, and the offset of that is that when you pull money out in retirement and ideally you know that $10,000 has grown significantly when you pull that money out in retirement, at that point you pay tax on your withdrawals. 401ks and retirement accounts are designed for retirement. So you know, rule of thumb, age is 59 and a half and if you need to withdraw out of the account prior to 59 and a half then yes, there are tax penalties. You would pay income tax and a 10% penalty. There are some rules you know traditionally there's a 10% penalty. There is the ability to take loans out of the 401k, so that's an option, but you know traditional mindset. If you need that money before you're 59 and a half, consider another savings tool.
Kali:It's really interesting that you bring up about loans. I have a case right now where my client to me. My understanding is the rule is it's either 50,000 or 50% of your account, whichever is less. That's what the IRS allows you to take out, and I know that it's company-specific, so it doesn't necessarily mean that every company allows this. People that are getting divorced they are looking sometimes for a way to free up cash quickly and a loan can take care of that. But in this particular case my client called his plan administrator and they let him know that he is only allowed to take out a very small loan. They allow loans but a much smaller amount, based on what he put in only, and not any of the employer contributions or any of the earnings, which I thought I'd never heard that before.
Kali:No me either. That is a great example of how retirement plans yes, you can have these basic rules, but it's always important to check your plan and understand that before you. I mean, the bulk of most people's net worth is in employer retirement assets.
Kali:So let's put this in the context of divorce. So I have a client sitting in front of me. First of all, they want to know can I get the money from the 401k? So you were saying that you normally you can't take the money out of a retirement account until 59 and a half. I want to emphasize too, for all of our listeners that the vast majority of assets that are transferred pursuant to a divorce, that is a non-taxable event. It's IRS Section 1041. And so there isn't any tax due when we divide up those accounts. But there may be surrender charges, sometimes penalties, that the custodian of an account might impose on a 401k that the custodian of an account might impose on a 401k.
Speaker 3:Yeah, that's a great example of. You know, rules are dependent on the situation and divorce sometimes can present unique rules. So, you know, I think what you're alluding to, of course, is with quadros and the opportunity to take a withdrawal without that penalty that we talked about a little bit ago. So when there is a split of qualified assets or qualified retirement assets in divorce, the person who is receiving a portion of their spouse's retirement account has a one-time option to take a withdrawal and avoid that penalty. You still pay tax on the withdrawal but you're not subject to that 10% penalty in this situation. So, yes, that's a great point.
Jacqueline:And one of the reasons why I like clients to have a financial advisor after the divorce is done is because that's one of the things that I don't discuss with them. Are you going to roll the money over into a retirement account or do you need some money now and you can access it without that 10% penalty? A financial advisor can help you analyze that question for you. So a quadro yes, it's a legal document that's drafted. It's usually drafted by a third party, not the lawyers. They usually farm it out to an expert. It can take three to six months before that money gets transferred. So people that think that, oh, I've got this money coming to me in a retirement account, I need to cash it in, I'm going to use that to pay off my legal bills, put a down payment on a house. This is what I've again recently. I just heard a client say this to me last week. There's a timing issue, so let's talk a little bit about. Can you give us some background on what an IRA account is?
Speaker 3:Yeah, so IRA stands for individual retirement account and the treatment of a traditional IRA is the same as a 401k. So when that money was deposited into that account, you receive a tax deduction. It grows within that tax-advantaged umbrella and then when you make withdrawals in the future, you pay tax at that point in time. So similar to a 401k time. So similar to a 401k. Yes, exactly yeah, similar to a 401k. Iras again have that 59 and a half age where you want to wait to access it to avoid penalties. But there are some interesting roles with IRAs where you can access money if you're in a timely situation and you want to be really careful with this. So you know what I'll talk about, because I wouldn't recommend trying on your own. But there is a 60-day rollover which might free up some time for you while that quadro is being processed. If you have both IRA and employer 401k assets, so you can pull money out of an IRA, as long as it's back in that account in full within 60 days, you can avoid those taxes and penalties.
Kali:Okay, so you got to put the money back in.
Speaker 3:Yes.
Kali:Yeah.
Speaker 3:In 60 days to the day. Don't don't go to 61 or you will be hit with a tax bill and penalties.
Kali:So that would be. I mean, it would be scary to count on Quadro money to put it back. I have a case another case right now where my client is going to borrow the money but and family has agreed to loan the money but in the meantime is going to borrow the money and family has agreed to loan the money, but in the meantime she needs it right away for a down payment, and so that might be a good option in that situation.
Speaker 3:Yeah, if you know for sure you have cash coming in any other way where you could repay that amount, you pull out of the IRA. Then again, within that 60-day period. That's a good bridge.
Kali:Right, okay, and those are also transferable and divisible during divorce. Kelly, do you find that it's easier or harder to transfer IRA accounts after a divorce versus 401k or qualified plan accounts?
Speaker 3:Transferring IRA assets is typically more straightforward than with employer clients qualified plans. Sometimes it's just a simple document, sometimes it's just submitting the divorce agreement to you know the financial institution, and then they complete the split. So yes, when looking at someone's net worth, transferring IRA assets is usually easier than employer plans, in my experience.
Kali:Would you agree?
Speaker 3:with that.
Kali:Well, quadruples can be very complicated and every company has different rules. So, yes, I definitely get where you're coming from. I think that the problem with IRA transfers is that people don't think there's going to be any problem, and more and more IRA custodians are requiring you to jump through different hoops. Sometimes they even require you to have a letter that says which specific assets inside the IRA are going to be transferred. I think that, when it comes to transferring IRAs, it would be really great for clients to have a co-pilot sitting with them and helping them manage that.
Speaker 3:And, on the flip side, during divorce, it's really advantageous to have someone like you helping with the process, who can look at the holdings in an account, look at those positions and have an understanding of how this impacts the future. So exactly what you're saying in those agreements if it says specific holdings. Or you know, we're talking mostly about retirement accounts today, but there are different investment account types that can have very different tax implications, and looking at what is what investments are held in each account can be a really important piece of that in each account can be a really important piece of that, I agree.
Kali:I agree 100%. I also know that many attorneys don't actually ask for account statements Because a lot of people nowadays they will track their assets, but a lot of personal investors have their own spreadsheet that they use to track or they have an app that they've got all their assets listed in to track, or they have an app that they've got all their assets listed in.
Speaker 3:So that's, you definitely want to have the statements for everything.
Kali:Right and also there, even in a retirement account statement, it's important to look at it. There might be a loan that nobody knew about. There might be money that's not vested. Can you explain what vesting is to our listeners? Can you explain?
Speaker 3:what vesting is to our listeners. So vesting is often related to the employer met you receive in your 401k. So, going back to that previous example, your income is $100,000. You're contributing 10% to your 401k and let's assume that your employer offers a five percent match. So five thousand dollars every year is going into your 401k in addition to your contributions from the employer.
Kali:Um, not free money yeah, you always want to contribute up to the match.
Speaker 3:That's right, that's important. But not all employers make that your money immediately. They want to incentivize you to stay. So there can be different investing schedules that say you need to work up until this point for our contributions to be completely yours, and those can be, you know, sometimes a five-year timeline. Some employers now it's immediate vesting. But the statement is where you really will see what in that account that 401k balance is truly yours and what would be surrendered if it's pulled out of that account prior to being fully invested.
Kali:Okay, great explanation, thank you. So the portion that's not vested in Michigan and again, we've listeners in all states, but in Michigan whatever is not vested in an asset may or may not even be considered part of the marital estate. Other states have law that says if it's not vested, it is not part of the marital estate. Or even if it's not vested, if it was partially earned, it's always part of the marital estate. In our state it can be, and it also is possible that it's not. It depends on the circumstances of your case and how you negotiate it. Let's add another layer to this conversation. So when I started off as a financial planner many, many years ago, there was one kind of IRA basically. Now there are other kinds of IRAs. Let's talk about the first big category of IRAs that a lot of people are going to run across. What is a Roth IRA and how is that different from a regular IRA?
Speaker 3:Yeah, so Roth money and Roth 401ks have a lot of Roth options. Now there's been a big push to offer Roth investments in both employer plans and the Roth IRA. So the difference between those traditional 401k IRAs that we already talked about is that you don't get a tax deduction on your contributions when you make the contribution or now. So let's go back to that example with $100,000 of income. Now we're talking about Roth 401ks, so I hope it's all right. I'm pivoting a little bit, I know. Yeah, I'm glad you brought that up.
Speaker 3:If you're contributing to a Roth 401k, if you're making $100,000, contributing 10%, your income for tax purposes that year is still $100,000. You don't get any deduction. You don't reduce your income, but those assets grow within that tax-advantaged umbrella the same and then have the added benefit that when you take withdrawals in retirement you do not pay tax and still tax-free. So don't get the deduction. But future withdrawals and all you know the disclaimer as long as all rules are followed are tax-free at that point. And that's the same with Roth IRAs. So your contribution limits are much lower with an IRA than with a 401k, but you don't get a tax deduction now. So you're not reducing your income the year you put money into the Roth IRA but when you take money out down the line after age 59 and a half it's tax-free and there are some different rules to access Roth IRA monies prior to 59 and a half. But just for introductory purposes. No tax deduction now. Tax-free withdrawals in the future.
Kali:And you still have to wait to 59 and a half to take that money out without penalty, is that?
Speaker 3:right, you do, yes, but with Roth IRAs because you never took a deduction. You can five years after contributions, or you can always take your money out that you've put into a Roth. So something it's an additional advantage of the Roth.
Kali:I think it comes down to if somebody is getting divorced and sometimes they have cash needs. Hopefully they don't and they can leave their retirement accounts grow for their retirement, but sometimes they do, and so I think that that's just interesting to know that there might be some possibilities that they should talk to a financial advisor about what is the best place to take the money from if they need money quickly, right away, and what are the pros and cons.
Speaker 3:Roth money. As a financial planner, I mean so we know what we know today. What the future holds, no one knows. So if you're in a low tax bracket right now and we know, wow, you would pay 10% on this contribution for taxes, but then this is just a fluke year for you. You're going through a lot of transitions, things will change, your income will grow and then in the future you're in a much higher tax bracket but you're taking withdrawals tax-free. I mean that difference from now until the future is very attractive. Again, as a financial planner, I mean we're looking to see where we can maximize Roth accounts wherever they're appropriate.
Kali:Okay, and that brings up another point that I know you help clients with, which is making a decision whether or not you want to convert regular IRA accounts to Roth accounts, especially after a divorce, when you may be in a really low tax bracket. Can you talk about that a little bit?
Speaker 3:Yeah, and that's something that opportunity Roth conversions has really presented itself now that spousal support for those who are receiving it is not taxable. So you might have, you know, a healthy income, healthy cash flow from spousal support, but your tax return doesn't reflect that Great point. Yes, if you have pre-tax accounts, so even 401ks IRAs if you have those pre-tax accounts, there is an opportunity to purposefully take an early withdrawal from those and immediately move it into a Roth account, so a Roth IRA. And yes, it does create sometimes it creates tax implications.
Speaker 3:I've, you know, we've worked with clients where we've been able to convert money into a Roth IRA and very little tax is paid on that change just because of that person's situation. But essentially you're saying, wow, I really am in a low tax bracket right now. I can move money from the account where I would pay tax in the future into an account where it can grow and be tax-free in the future with minimal tax impact now and I have the free cash flow to pay the tax due on that conversion if necessary. Or, on the flip side, we're making sure to maximize that you have some income on that tax return because everyone has a standard deduction, everyone gets a certain amount of income that's free, so at least taking advantage of that from an income perspective to get their taxes done.
Kali:They're not going to always think to advise, whereas a financial advisor that does holistic financial planning is going to look at that. And you need to have a strategy. You don't want to just convert the whole thing at once.
Speaker 3:No, it's not. That's a good point. Thank you for saying that it's not the entire balance. You can choose a specific amount that you want to essentially withdraw from the pre-tax and move it into that Roth account. So yeah, thank you. We don't want people going and converting their entire IRA balance.
Kali:Every person's situation is completely different, and we're giving general information, but it's not specific advice for any one person, and any person that has any of these issues really needs to seek help from a professional.
Speaker 3:Yeah, there's no Rule. Of thumbs are always helpful to a certain point and beyond that you really need to have someone digging into your situation specifically and looking at your details, absolutely Okay.
Kali:Another kind of IRA that can be transferred during a divorce is an inheritance IRA.
Speaker 3:So you know again, basic example say, one of your parents passes. They have an IRA balance remaining and you are their only child remaining and you are their only child, that balance let's just use a random number $50,000 would then be transferred into your name. So you are the account holder. Assuming it's a pre-tax IRA, any withdrawals you take are taxable to you. But there have been some new rules that very recently passed that significantly affect these inherited accounts where you actually need to liquidate that entire balance 10 years after inheriting the account. So if you're looking at a $50,000 IRA, so if you're looking at a $50,000 IRA, you really should have a strategy in place related to your taxes.
Speaker 3:Again, going back to that where you're taking withdrawals purposefully, to make sure that on the 10th year you're not saddled with this forced ballooned withdrawal Right, ballooned withdrawal Right, depending, yeah, also on the age. There are some varying rules there. You might have to take a certain amount each year. The age of the original holder at the time of their death affects that rule. But it's very interesting planning with these inherited accounts. You're not expecting it most of the time and even if you have a really solid tax strategy for yourself, having that kind of account come into your life, into your net worth, can really force a review and change your income for the next 10 years Right, and it can be dramatic, though, depending on how much and I've seen some really large inheritance accounts.
Kali:When that comes out as taxable income, when you're making those required distributions and you have an inheritance IRA, is it treated just like ordinary income, no penalties.
Speaker 3:Yeah, so great question. Yes, that is ordinary income on your tax return. So you know if you're in the 24% tax bracket you want to make sure you're withholding enough in federal and state tax withdrawals.
Kali:Okay, and surprisingly enough, even though, again, in Michigan, if you receive an inheritance IRA and it's treated as separate property, it's your separate property. However, sometimes people want to pay their spouse the amount that they owe them from an inheritance IRA if there aren't any other liquid assets. Let's say, and one person wants to keep the house and all they have is an inheritance IRA, those also can be transferred pursuant to a divorce. So you can have an inheritance IRA that is transferred to you, but it still maintains those same rules that you were talking about as far as withdrawals go. Is that really an account that you want? How is that going to impact your taxes? I've seen that happen in a few situations.
Speaker 3:Yeah, that new rule was very drastic from prior to 2019 or 2020, when that passed Unknown count and you could stretch those accounts throughout your entire life.
Kali:And you could stretch those accounts throughout your entire life. That's not the case anymore. So you have to be very purpose and you have mandatory withdrawals that could be taken into consideration as income for you when looking at spousal support, because it is a dependent source of income that you're going to have. So I think that that's a really interesting asset. Like I said, I'm a nerd and when I see that kind of asset in someone's portfolio, I get a little excited because we can be creative. Asset in someone's portfolio, I get a little excited because we can be creative. Let's talk about just a couple more things that I want to touch on. Let's talk a little bit about other kinds of retirement assets. So, really briefly, can you talk a little bit about what an HSA account is, if people have those? I definitely see those in most of the cases that I work on.
Speaker 3:So again, a nerd situation. I love HSA. They are so tax advantaged. So HSA contributions you don't pay payroll tax on those. So Social Security, medicare and income tax HSA contributions avoid all three of those. And then they have the added benefit of withdrawals, as long as they're for qualified health costs or tax-free.
Speaker 3:So HSAs very basic health savings account and you contribute money to those. If you have a qualifying health insurance plan, high deductible plan, and you can use those accounts to pay for out-of-pocket medical expenses, is that there's no withdrawal timeline on these accounts. So if you're a family and you're making the max contribution, which is in the $8,000 range now, and your out-of-pocket medical expenses aren't nearing that level, you can continue to roll that balance forward. The added benefit is that many of these plans offer investment options. So they can be a really interesting tool for retirement planning and planning for retirement medical costs.
Speaker 3:And you know something we don't see this happening often because, as everyone knows, the cost of health care medical expenses is significantly rising. So those are often, and most often, best used for medical expenses. But at age 65, they almost take on an IRA characterization, so you can withdraw from those at age 65. You would pay tax on the withdrawals but not penalties. So you get the triple tax advantage of no income tax, no Social Security or Medicare tax. When you make the contributions and you know if they're used for qualified expenses now or down the line, you don't pay tax on those withdrawals at any point.
Kali:And the definition of what is a qualified expense is very broad, it's you know.
Speaker 3:It's not restrictive. Yeah, the rules around that are fairly liberal.
Kali:Right, so those are. Yeah Again, when I see that on a balance sheet, that's like the triple gold crown it's a tax deduction, it grows tax deferred and then you take it out tax-free. I mean it's everything that you could want, as long as you know that you're going to be using it for healthcare costs. Those are always transferable in a divorce According to the IRS rules. Hsas are divisible assets in divorce. It's not company-specific, it's based on the IRS rule. Divisible assets in divorce. It's not company specific, it's based on the IRS rule. So the recipient would have to open up their own HSA account to receive the transfer, but it would have the exact same benefits for them that it would have for their spouse. So if people can afford it and they don't have a need for money upfront, taking their part of an HSA is always beneficial. Last, a lot of clients have annuities especially I see this a lot with teachers and those are a little trickier to divide and divorce. So let's talk in general about what a non-qualified annuity is annuity is so a non-qualified annuity.
Speaker 3:the benefit of that is offering that tax umbrella that your retirement account, your 401k, your IRA offer with after-tax money. So if you, you know, if you think about it like a brokerage account after-tax money when you make contributions you're going to pay tax along the way on dividends, interest, capital gains. With an annuity, they're going to give you a tax shelter I hate to say tax shelter a tax bubble, okay, where you're not going to pay tax on that money until down the line with withdrawals, for example. So similar to the IRA with that tax bubble while the funds are invested in the account.
Kali:Okay, and some people have IRA annuities which I always refer to as like an umbrella with an umbrella over it, and I don't want to get into that, the details of that on this. But people might see they might get confused and say, well, this says IRA in the, an umbrella with an umbrella over it and I don't want to get into that, the details of that on this. But people might see they might get confused and say, well, this says IRA in the account title, but it looks like it's an annuity. You can have IRA annuities also. Are they always divisible in a divorce?
Speaker 3:So annuities are by nature very confusing, very messy, and that seems to be the continuing theme in divorce as well. So you know, IRAs are transferable, 401ks are transferable, annuities are not always.
Kali:I love the way you put that. That is absolutely a great way to describe that. They're problematic and they will always be. I always advise clients to take anything but the annuity. If they can get their money from an annuity from another retirement asset, that's always preferred, in my opinion. And then again it comes down to yes, the IRS says that all assets that are divisible between spouses you know when you've got a divorce decree it's not a taxable event. But that doesn't mean that every asset really logistically is divisible, because annuities company and the insurance companies that sell them, they all have different rules and they don't care what the IRS says. It's going to be their rules and so people need to do a lot of research during the divorce. I see settlements that say and 50% of everything is divided equally, and then, go ahead, client, you figure it out.
Kali:And then we've got people that are 10 years down the line and have never got these assets divided.
Speaker 3:It's. You know we talked earlier about. Retirement plans can have their own rules, Annuity companies, insurance companies can have their own rules, and a divorce isn't going to supersede those Right. Apparently.
Kali:No, absolutely there might be surrender charges in place. No, absolutely there might be surrender charges in place. What I have found is, with a lot of annuities, we can get an annuity, company can be divided and then at the very end, right before the client says, okay, they're like, but we're going to give you a brand new contract, which means you have a brand new surrender fee. And what you loved about that last contract? Because you were sold that these rates are so great. Now you're going to get a completely different army rate. It's not available anymore. Great.
Kali:So I think that a good word of warning would be to try to stay away from getting a share of those if you can. And again, working with a financial advisor to help with that transition, I always tell people you really don't want to wait a long time to get assets transferred into your name, whether it's brokerage account assets or pre-tax assets, IRAs, 401ks, annuities because the longer you wait, the more likelihood there is that the money could be gone. The minute that your divorce is done, your spouse can take you off as beneficiary, so the money can be gone the money. It gets more difficult to transfer it as well.
Speaker 3:Yeah, it's really hard after a divorce. I mean, that's such an emotional process by the time it's finished and you actually know what your picture will look like. You can just be exhausted and want to just I'll figure all that out later. But, working with you know an advisor during divorce like Jackie, an advisor post-divorce that can really help you create a schedule and stay on top of things and not leave you on your own to do it, to have someone making sure all the I's are dotted and the T's are crossed, without overwhelming you.
Kali:Right and it can absolutely be overwhelming. And you are right, when people are done, they have decision fatigue, they're through a trauma and now they have to deal with what comes next in my life. And they're not thinking about dividing up an annuity or an HSA account. And I was telling you before we started recording. I always meet with clients when the divorce is done and I give them a list, a checklist, of what needs to happen. And a lot of times halfway through that meeting I see eyes kind of glaze over and I feel like, okay, this person really needs to have a financial advisor to oversee it with them, otherwise it just might get lost.
Speaker 3:Yeah, your process is so good at outlining what needs to be done, but at a certain point that person does need to make the decision to work with someone or handle it on their own. But make sure it gets done in a timely manner, right?
Kali:Well, thank you so much for sharing all your knowledge with our audience.
Speaker 3:This was really fun and really appreciate getting a chance to talk to you. It's always nice to talk to you Fun.
Jacqueline: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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