.png)
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
5 Biggest Money Myths in Divorce (and the Truth Behind Them)
We're starting off Season 2 with a bang! Divorce is the single largest financial transaction of most people's lives, and making uninformed decisions based on common money myths can have devastating long-term consequences. We debunk five major misconceptions about divorce finances to help you navigate this complex process with confidence and clarity.
• DIY divorce is rarely the money-saving solution it appears to be and can cost significantly more in the long run
• Keeping the house requires careful financial analysis including mortgage qualification, affordability, and evaluating its long-term impact on your finances
• Retirement accounts can be accessed during divorce through QDROs, offering important financial flexibility without the usual early withdrawal penalties
• Alimony needs should be evaluated as part of your complete financial picture, including all potential income sources and a realistic budget
• Divorce settlements must consider future implications like taxes, investment growth, and retirement security, not just division of current assets
• Having proper legal and financial guidance helps you make sound decisions when you're feeling emotionally exhausted near the end of negotiations
Schedule a free 30-minute consultation with me to see if divorce financial planning is the right fit for you, because financial peace of mind is possible. https://calendly.com/roessler-jacki/30min
CLICK the LINK below to download Jacki's budget worksheet and find other resources!
https://www.roesslerdivorce.com/resources/
Visit us at https://www.roesslerdivorce.com/ to learn more about Jacki's practice and to find valuable resources for your case.
The Divorce Rich podcast is proudly sponsored by Center for Financial Planning: Striving to Improve Lives through Financial Planning Done Right! https://www.centerfinplan.com/
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. Hey, if you're recently divorced or still in the middle of it, you already know that life can feel like it's been turned upside down and, let's be honest, the financial part it's overwhelming, confusing and often the last thing you want to deal with. That's why I want to tell you about the Independent Wealth Management Team at Center for Financial Planning. Their team of certified you want to deal with. That's why I want to tell you about the independent wealth management team at Center for Financial Planning. Their team of certified financial planners specializes in helping people just like you navigate life changes with confidence. Whether it's assessing your new financial circumstances, creating or updating your retirement plan or helping you adjust to the new normal, they'll work with you to get a clear, customized plan to feel in control and move forward with confidence. So if you're interested in working with a financial planner who you can trust to have your best interests in mind and you're ready to take the next step, visit centerfinplancom that's centerfinplancom and schedule a conversation. Center for Financial Planning Live your plan. Securities offered through Raymond James Financial Services Inc. Member FINRA, sipc. Investment advisory services offered through Center for Financial Planning Inc. Center for Financial Planning Inc. Is not a registered broker-dealer and is independent of Raymond James Financial Services Planning Inc. Center for Financial Planning Inc. Is not a registered broker-dealer and is independent of Raymond James Financial Services.
Speaker 1:Hello everyone and welcome back to the Divorce Rich Podcast. This is an exciting episode because today we're kicking off Season 2 of the Divorce Rich Podcast. In Season 2, we're going to dig deeper. We're going to have more strategy, more real-life stories and more tools to help you feel financially confident on your path towards becoming rich in all senses of the word, after your divorce is done. So today we're kicking off things with the five biggest money myths I hear in divorce all the time and the real truth behind them.
Speaker 1:Let's start off with myth number one. Myth number one is if I want to save money, I can do the divorce all by myself, on my own. I don't need attorneys. I don't need any professional experts involved. I can just do it with me and my own. I don't need attorneys, I don't need any professional experts involved. I can just do it with me and my spouse.
Speaker 1:The truth is, this is the most dangerous strategy when it comes to divorce. In most situations, if you have been married for, let's say, less than three years and you don't have any assets that you've accumulated together, you don't have any minor children, that might be the only good candidate for a DIY divorce. In other situations, yes, it can be expensive to have an attorney, although there are many different ways that you can retain an attorney, you can have a very limited scope attorney where they review what you have, brainstorm with you and to help you draft the final settlement and you do all the negotiating with your spouse. That's one option. Another option, of course, is to have an attorney be your advocate throughout the entire process. This, to me, is the smartest way to go. In my 30 years of experience, I highly recommend having an attorney involved. I even do a lot of mediating of cases, and the cases where the clients have attorneys take a lot less time, there's a lot less confusion and they just run smoother. In the long run, I truly believe it saves clients money when they have appropriate advice during the divorce. Without an attorney, you just don't know what the rules are. You don't know what would be standard, for example, and what you're generally entitled to in terms of property division, in terms of spousal support, sometimes even in terms of parenting time. So these are all things that this is.
Speaker 1:The single largest financial transaction of your life is probably going to be your divorce. The second one is going to be upon your death, when your estate is dealing with transferring to your heirs. But you're not going to be around for that. You are going to be around, obviously, for this. The divorce is a financial transaction and you want to make sure that you do it the right way. You never get a second chance to go back and redo your settlement. You can't go back and say, uh-oh, I made a mistake. Once it's signed, it's done and you really can't change it unless you can prove that there was a mutual mistake or that you were mentally incompetent when you signed the agreement. But since that doesn't apply to most people, you really want to make sure, in this one area, that you get good advice. If I had a heart problem, I wouldn't say, well, I think I'm going to save a lot of money if I just handle it myself. I mean, I could do that, but that wouldn't be the smartest thing to do. And that is the case with the DIY divorce trend. We all agree divorce is emotional, but your financial decisions shouldn't be.
Speaker 1:I'm Jackie Ressler, certified Divorce Financial Analyst On this podcast. I help you make smart, informed choices about money during divorce so you can move forward with clarity and confidence. Not sure where to start? Let's talk. Schedule a free 30-minute consultation with me to see if divorce financial planning is the right fit for you. At the end of this episode you can check in my show notes. There's a link for you to sign up for a free 30-minute consultation, because financial peace of mind is possible.
Speaker 1:Myth number two I will automatically get to keep the house the truth. The house is just another asset. Often it's offset with retirement or other investments. And what's really important here is that if you want to keep the house in the divorce settlement, you know you're going to have to buy your spouse out of their equity interest in the house number divorce settlement. You know you're going to have to buy your spouse out of their equity interest in the house number one. So you have to ask yourself one am I going to have to refinance the house, maybe get rid of a pretty good mortgage rate that we have and have a new, higher rate? Am I going to qualify for a mortgage on my own? In order to get a mortgage in your own name, you have to have earned income for at least six months, and that's a Fannie Mae regulation. So if you're getting child support and you've been out of the workforce and you're counting on your child support as what's going to qualify you for qualifying for the mortgage, it has to be running for at least six months until you can even be approved.
Speaker 1:I highly recommend that you meet with a mortgage broker during the divorce process to find out if you can even qualify and what you would need to have in terms of spousal support and even assets in order to qualify and going along with that you really want to make sure that your credit rating is good. I always recommend to clients that they open up a free account with the app Credit Karma. That's K-A-R-M-A and it's a fantastic app. It does a soft pull on your credit and it pulls it every day. Soft pull means that it doesn't affect your credit score by looking at what your credit is and it just tells you all of the accounts that are out there in your name which someone going through divorce may not be aware of. If your spouse has been handling the finances, there might be debts in your name that you're not aware of. So you can see all of the accounts that are currently open and your credit history, your payment history, and see what that score looks like. That's going to be something important if you're trying to determine if you can qualify for a mortgage.
Speaker 1:The second issue related to the house that you want to consider is the fact that the house is very illiquid. So let's say that you are dead set, that you want to keep that house. You want to keep your children in the house, which is what I usually hear. I would encourage you to question yourself and say ask yourself questions like how long do I want to stay in the house Not whether or not I want to stay in it, but how long. Because that helps you figure out what you can and can't afford. And maybe the answer is I want to stay permanently. More often than not, the answer is I want to stay two years to get my kids through the next two years of school. I want to stay five years. I rarely hear someone say they want to stay permanently, although that can be the situation too.
Speaker 1:But putting a time frame on how long you want to stay in the house helps you frame the tools that you need to make a decision on whether or not you can afford it, because that is the bottom line. The bottom line is not whether or not you get to keep the house, but if you do end up getting the house in your settlement, can you afford it no-transcript and take cash out. But that again is not ideal because there are costs involved with that and you've got to change the rate and make sure you can get approved. So making sure that you can afford to have the kind of illiquidity that comes with the house is going to be something very important for you to evaluate. So the best way to do this is to get a hold of a budget worksheet. I know nobody likes the word budget, I like to call it a spending plan, but it is a budget and if you haven't been in charge of the finances or you haven't been the bill payer, this is a wonderful opportunity for you to sit down and put yourself in the driver's seat of answering the question can I afford to keep the house? The best thing that you can do, I'm going to link in the show notes here my budget worksheet, which is pretty comprehensive, but there might be items that you spend money on that are not included in my budget worksheet, which, of course, I would encourage you to add everything in that you spend money on. But it really clarifies choices that you've made when you start to put together a budget, and so, of course, you want to look at all of the housing sections.
Speaker 1:What is it really going to cost me to maintain this house? It's not just the mortgage, the principal interest, taxes and insurance. It's also the ongoing upkeep, the carrying costs. So the electric bill, the heating bill, repairs and maintenance. Do you have someone that comes out and takes care of the lawn for you, if your spouse has been doing? Are you going to have to put that into your budget? Someone to come out and do the snow removal if you're in Michigan, like I am, or the things that you hadn't been taking care of? Maybe put it budgeting in a cost for house cleaning if you're going to be entering the workforce full-time from being out of the workforce. These are all important things for you to think about and in order before you get set on.
Speaker 1:I want to keep the house. You really need to know what it costs to maintain the house. Another thing that I encourage clients to do is take a look at some financial projections that show you what you look like financially in five years, 10 years, 20 years if you keep the house, versus what you look like financially if you let your spouse keep the house or if you both decide to put the house up for sale and split the proceeds decide to put the house up for sale and split the proceeds. That's an important tool for you to have in order to judge what is the best scenario for you, and that's a way that you can take the emotions out of. I have to keep the house, and treating it more like this is a business transaction between you and your spouse. If this was a business transaction, you would be looking at all of the pros and cons financially and emotionally of each choice. I'm not saying that the finances are always going to trump the emotions, but it's important for you to know hey, I can keep the house, but I'm not going to be able to do any kind of travel during these years when I'm keeping it. I'm really going to have to tighten up my budget and discretionary spending. That's fine if that's your choice and as long as it's an educated choice, it's a good one to make. That's where a CDFA can come in and help you run financial projections like that. If you have a financial planner that you're working with, they should also be able to help you run financial projections and really think it through.
Speaker 1:Again, this is the single largest financial transaction of your life, most likely other than retirement. But this is even more all-encompassing than retirement because in retirement you have some choices that you can make that are irrevocable. But in a divorce, every financial choice that you have that you make today is irrevocable. But in a divorce, every financial choice that you have that you make today is irrevocable. You can't change it. So you want to be really careful and thoughtful when you think about the house and try I know it's hard, but try to move the emotions out of it and keep in mind, if you're going to be stressed out every day maintaining the house, that's not going to be stressed out every day maintaining the house. That's not going to be good for your children either. So you want to look at the whole picture and you want to take your time and make sure that this is something you give a lot of thought to.
Speaker 1:Myth number three retirement accounts can't be touched today, so I don't really care if I get them. That's about the future. I'm more concerned about my assets today. The truth with a quadro, a qualified domestic relations order, retirement accounts can be divided and they will be divided today, and you should be keeping in mind your financial future as well as the present. So let me give you an example.
Speaker 1:Let's say that your spouse has a qualified plan. A qualified plan is an employer-sponsored plan where the employer and or the employee put money away into an account that grows income tax deferred until retirement and there's usually penalties associated with taking the money out before you leave the employment where you. Usually you can't take money out before you leave and there are penalties involved with taking the money out before the age of 59 and a half years old. If you take the money out before 59 and a half, you're going to get hit with a 10% penalty on any withdrawal and you pay ordinary income tax on any money that's distributed and you're always going to pay ordinary income tax. But if you can wait until you're older than 59 and a half years old, you will not get hit with that 10% penalty. Than 59 and a half years old, you will not get hit with that 10% penalty. However, there are some exceptions to that rule and one of the exceptions is related to divorce and according to the IRS rules, when you get divorced, you have a one-time window to take money out of your spouse's qualified retirement plan. So employer-sponsored retirement plan, like a 401k or a 403b or a 457, you have a one-time option to take money out before you turn 59 and a half and still avoid that 10% penalty.
Speaker 1:So that's a benefit that you want to think about. It's IRS Regulation 72 T2C for all of the dorks like me out there who want to keep track of what the IRS code section is. But it can be a wonderful planning opportunity. If you and your spouse have all of your assets tied up in illiquid items like your house or retirement accounts, you can free up some assets Now. I'm a financial planner and, of course, my advice is always going to be save your retirement assets for retirement. But sometimes, when you're getting divorced and there isn't a lot of money, it is an option to take money out of a qualified plan only and it can't be your own plan, it has to be your ex-spouse's plan and take that money out, avoid the 10% penalty and use that money for cash, whether it's needed to pay off legal fees or help you get started by paying off some credit card debt that you've accumulated, or paying money towards the down payment on a new home.
Speaker 1:These are all options, and in order to get that done, there's a separate legal document called a Qualified Domestic Relations Order. It's a QUADRO, or a QDRO for short, and that legal document is the tool that's going to be used to pick the money up out of your spouse's qualified plan and transfer it over to an account in your name. One thing that I want to make sure that I point out is that it can take some time, so don't think you're going to get the money immediately. If the money is coming from your spouse's 401k after your divorce through a quadro, anticipate that it's going to be between three and six months after the quadro is started that you're actually going to receive the money. So I'm going to say that again for anybody that didn't quite catch that Plan on three to six months before you can actually have that cash in hand after the beginning of the quadro being drafted.
Speaker 1:So there are all different kinds of players involved with getting the quadro prepared. There's you, your spouse, your attorneys, the judge. In your case, there is going to be a quadro preparer. In the majority of cases around the country, attorneys farm out the drafting of quadros to specialists who only prepare qualified domestic relations orders. And there are certain experts that are near you. Whatever state you're in that, that's all that they do. You're in that, that's all that they do. And it can be tricky because the rules are different for every single plan and the rules change pretty often. So it makes a lot of sense that attorneys save you the money Instead of paying them. They send it out to an expert.
Speaker 1:So that expert. They have other quadros they're working on, so it might take three to four weeks to prepare your quadro and then there might be changes that are going to be suggested by you to prepare your quadro, and then there might be changes that are going to be suggested by you, your attorney or your spouse's attorney, before everybody agrees on the language and it gets signed and entered by the judge. After that point it goes to an outside third-party plan administrator so not the employer, not the other attorney. It goes to the plan administrator for that 401k or the overseer of the plan and they have to approve that order and they have hundreds sitting on their desk. The IRS has not set any time limit that quadros need to be approved or rejected in terms of the plan administrator's perspective. So this is where the timing comes in and sometimes the orders get rejected on the first time out. That doesn't mean they were drafted incorrectly, but sometimes they do get rejected and they have to start from the beginning with getting everybody to sign it again the judge to sign it, the quadro preparer to fix it and sent back out. And sometimes that happens three, four times. It's not unusual.
Speaker 1:So by the time the Quadro is approved and you get a letter saying how do you want your money? Again, it can be anywhere from three to six months. If you get it before, then consider yourself lucky. So, if you need money short term, this is not the best place to get it if you have an urgent need for cash, but if you have a need that can wait three to six months, this is an opportunity that should be addressed Now. When you address it, you want to make sure that you're not giving up too much in retirement today and sacrificing your financial future, and again, that's where a CDFA can help you analyze that decision. And I'm not suggesting that anyone should take that decision lightly Because, again, once you do that, it's irrevocable. Once you take the money out, you can't put it back in. There's no putting the toothpaste back into the tube, Although if you did take the money out and you changed your mind, you do have an opportunity to put that back in short term without getting treated as a distribution. These are all details that you're going to want to talk about with your financial advisor once the divorce is final, and also if you're lucky and you're working with a CDFA. These are pros and cons that you should be discussing during the process.
Speaker 1:Okay, myth four is a good one. I'll be financially ruined if I don't get alimony or spousal support. The truth Spousal support it's called spousal support in my state, but it's the same as alimony. In some states it's called spousal maintenance, depending on where you're listening. Spousal support is often temporary and structured around certain events happening.
Speaker 1:I want to encourage you to look at the whole financial picture, not just one potential income stream, when you're evaluating your settlement. So there are three areas of money in a divorce there's child support, spousal support or alimony, and property. Each one of these can't be looked at in a vacuum. They all interact with each other. So when you're evaluating what your need is for alimony, you want to look at all of your income sources. So that includes your own potential earnings. It includes any child support you're receiving, which, again, is going to be tax-free to you. I know we've mentioned this before in the podcast but, as a reminder, any child support received is tax-free income, so different than your earned income, you don't pay any taxes on that. As far as other income sources, there would be any investment earnings from any property that you receive. Maybe you're going to be receiving a pension, maybe you're going to be receiving Social Security, depending on how old you are. All of these income sources need to be taken into consideration and added up together, less any taxes that might be owed, and then use that number to compare against your budget.
Speaker 1:I'm going to go back to that again. I am definitely going to be linking my budget worksheet in the show notes for this episode, but starting with a budget, although it is not fun, provides so much clarity for you. How do you even know how much spousal support you need and for how long, if you don't have an idea of what it's going to cost you to live? And the only way you're going to have an idea is by starting off with a budget. And if you're working with a CDFA and you're confused or unsure what your budget will be, they will be able to guide you and help you create something that's realistic for yourself, based on your past living expenses and based on what your goals are for the future in terms of where you're going to live and what you're going to be spending money on. This is, again, really important to consider. Before you agree to paying for any expenses for your children that are not covered by child support. You need to make sure that you can afford that and, again, starting off with a budget is an important thing to do in evaluating all of the income sources together. This, of course, is easiest done by a CDFA, someone who is trained in looking at your living expenses and all your potential income sources, taking into consideration inflation on your expenses, because every year the cost of living goes up, and helping you back into what number you need to have for spousal support. I always recommend, before going into mediation, end stage of mediation it's really important for you to know what your bottom line is, what would be the number that would be great to receive and what would be the number that you just can't accept that you cannot go below because you're not going to be able to survive financially. So working with a CDFA should really help you put a solid number on that, without just having this panicked idea that if I don't get spousal support and it's not permanent I'm just not going to make it Okay. I hope you're still with us because this is my favorite one.
Speaker 1:Myth number five divorce is just about dividing what we have today the truth. Divorce is also really about planning for tomorrow, planning for your future taxes, future investing of assets like RSUs and PSUs, college expenses, retirement security. One spouse might have stock options or RSUs that vest years after the divorce, those matter too. Are they going to be treated as income for purposes of support? Are they going to be treated as an asset that you might have a marital stake in?
Speaker 1:It's really important to look at what is the long-term impact of any settlement that you're agreeing to today. You want to make sure that you're very thoughtful in all of the things that you do, because whatever you agree on now is going to have a future impact on you. I can't even begin to tell you how many times you're going to pull back out your judgment on divorce or your settlement agreement and ask yourself what did I agree to? What does that say? What does that mean? It is going to be a document that you're going to refer back to for a long time, especially if you have minor children. So you need to be that person that is thinking 10 steps ahead. So you need to be that person that is thinking 10 steps ahead.
Speaker 1:Now, I am a person who is always thinking 10 steps ahead. It's probably because I am a worrier, but that does make me pretty ideally suited to working in divorce cases, because I am always thinking about how is this decision today going to impact your ability to retire? Is this decision today going to impact your ability to retire? How is taking this asset going to impact your future tax liability as compared to what your spouse is going to end up with? All of those things really need to be considered because, again, as I said earlier in this episode, you have one shot at getting the right divorce settlement for you. You cannot go back and change it, so you need to make sure that it works for you, not only today, but in the future.
Speaker 1:And this is not only a myth, but it is the most significant mistake that I see many of my clients getting close to making is they're at the end of the process and they just want to throw their hands up in the air and say I am done, I can't do this anymore, I can't negotiate anymore, I can't think straight anymore, there are too many details, let's just get it done. And where I've been divorced and I completely understand that feeling that's where your advocates really need to step in and you need to let them help you by saying, okay, this is something you can give up, but this piece over here I wouldn't give it up. We got to keep going. We got to tough it out for one more mediation session, or listen to your advisor If they say you know what? This is not something that's that significant for you long-term, so it's okay to just let this go. That is, I think.
Speaker 1:If I could give any advice to anyone towards the end of the divorce process is you are not alone. Everyone feels frustrated at the end, everyone wants to be done, but you need to ask yourself and your attorney and your financial expert if you're working with one. Is this particular issue that we're talking about the kind of thing that's going to impact me down the line, or is it something that it's okay if I walk away from? If you decide to walk away from it, at least having that information for yourself and knowing that that is something that you analyze thoughtfully, that is going to make all the difference in how you look back on this time in your life and evaluate the decisions that you made. Welcome back to the mailbag segment, where I answer questions that were submitted by listeners and asked by my son and my new assistant, kevin Ressler, who has been on a few episodes before. So, kevin, welcome to the podcast and let's jump right into the next question that we've got.
Speaker 2:All right. So this next question asks I've been out of the workforce and getting child support. I just got a job opportunity that I really want to take, but I'm afraid my child support will go down.
Speaker 1:What should I do? Okay, yeah, that's a tough question, again, one of those questions that definitely a lawyer should be consulted on the legal implications of taking a job or not taking a job. I would. If I'm answering it from a financial perspective, I would say this One the listener that sent this question in do they know for sure that their child support is actually going to go down if they get a job? So what would be a good idea is to pull out your settlement agreement, pull out the language in your settlement agreement.
Speaker 1:A lot of times a good attorney will put into the agreement child support was based on mother's income at X dollars and father's income at X dollars. So if that's what your settlement agreement says, that's really helpful because that's a good starting point and all states, I believe, have their child support formula online. I know that Michigan does. So you can go online and you can input, you can play around and model the numbers and you can input the amount of your current income and what you think your spouse's income is and the overnights that each of you have in Michigan, and it will. The software program will tell you what the child support amount might change to. So let's say, for example, that when you got divorced you're making $20,000 and now you're making. You got a job that you're making $30,000. Or what's more common is I have a lot of clients who they've been out of the workforce, they're a stay-at-home parent and they actually have no income, but there was some income imputed to them during the divorce process as if they were earning minimum wage. So that happens where the initial child support might have imputed some income to them even if they're not working. So let's say they were imputed at $20,000 and now they've got a job making $30,000. That might not be a big swing in child support, depending on what the higher wage earner's income is.
Speaker 1:So I guess my first thought is are you sure that your child support is going to go down? And because maybe it won't, and if it does, is that going to be? I think maybe the bigger picture answer is if it's something that sounds like a great opportunity to you and you like the idea of doing it and you think you can have a career in that, I think that's got to weigh pretty heavy in that decision, that you know you being able to support yourself going forward, finding a job that you, like you know those are. It might be helpful to meet with a financial advisor that understands divorce and how child support works, maybe to help you analyze the finances of that. But I think my gut instinct is, taking a look at the big picture, that it is going to be better for the lower wage earner to settle themselves in a place where they have a future career.
Speaker 1:Now, of course, that means that you might have more daycare expenses If you have been a stay at home parent and now you're going to go and get a job. Daycare expenses if you have been a stay-at-home parent and now you're going to go and get a job. Daycare expenses are part of the child support formula in Michigan, so that would need to be looked at. And then other costs that go along with having a job, so gasoline to put in your car if you're driving somewhere, maybe a new wardrobe if you've been a stay-at-home parent and you need to dress differently. So those are all things that need to be taken into consideration. I think that's a really big question. It's not something that I can answer in a short soundbite. All right.
Speaker 2:So this person asks I have a terminal illness and my spouse is divorcing me. How will that affect my settlement?
Speaker 1:terminal illness and my spouse is divorcing me, how will that affect my settlement? Wow, this is a tough question. Okay, so, of course, my fallback is you need to have an attorney. This is really, again, a question that I would absolutely recommend that somebody ask a qualified attorney, meaning someone who has, who lives in the county that you live in or the jurisdiction that you live in, has a lot of experience in family law and hopefully has had experience with gray divorce or elder divorce cases, where they where this might have come up. It's. This is a tricky one.
Speaker 1:There's so many different aspects to this question too. You know, even in terms of, it might be a good idea, if you're thinking about getting divorced and you have a terminal illness, reaching out to a probate attorney in addition to a family law attorney, someone that can educate you on Medicare look-back rules. Those are things that I know enough about to be dangerous. I don't know enough about to really give advice, but I know that there's some planning in terms of splitting up assets when you get divorced and then, if you were to die shortly thereafter, whether or not the assets, how that is handled with your heirs, needs to be looked at. So that's one layer of complication. Another important aspect about that is if you have a terminal illness and you're getting divorced, you might be willing to give up certain things in a settlement as a trade-off for other things that might impact you more in the short term. So, for example, maybe it's not a good case for spousal support, but maybe you need spousal support to pay your medical bills right now and you might be willing to give up interest in a pension or something in the future that you're not going to be around to benefit from. So you know, I think that there's some opportunity to be creative in a settlement like that, where you've got one person with dramatically different short-term financial needs than the other person, but it's a situation that you know you really need to have communication with your ex of a case would really be a good case for what's called collaborative law, where you've got a group of professionals that are all working together for the family to get the best settlement for the family, and in a collaborative case, both parties have their own attorney, there's a financial neutral and a mental health professional that's there for team meetings. This kind of a scenario might be best suited for that, and also again bringing in some other experts that we don't normally bring in, like a probate and a state planning attorney.
Speaker 1:I'm really glad you raised that somebody sent in this question because this is it's an important topic and it's got to be very scary for the person in that situation. So my heart goes out to them and I hope that they get the resources and the help that they need to get them through it. If you have any burning questions that you would love for us to answer, please email them to us at divorcerichpod P-O-D at gmailcom, and maybe your question will be the next one that we talk about. 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.
.jpg)
