Why you need a financial advisor for your divorce

Making Smart Decisions with Josh Tirado

Josh Tirado: [00:00:20] Welcome to the making smart decisions podcast. I'm your host, Josh Toronto. And today, we're gonna touch on the importance of a financial advisor. If you're getting divorced now, this advice applies equally to both men and women, but in my 22 years of experience, I believe that men need to heed this advice even more.

[00:01:25]So the divorce process is often awful and draining and takes too long. Whether that takes too long, the six months, or whether that takes too long is three years until everything is resolved. Whatever it is, it generally takes too long and feels way too long, and is draining at that point. You have many other things going on, and you may not be making the smartest decisions.

[00:01:45] I'm talking about one for your current money and investments and to whatever's going to happen with assets being divided up through the divorce. I've personally worked with some people where there's a big discussion about what they're gonna do with the house. And it really came down to one person, loved the house, one of the house, the person didn't want it, which is great.

[00:02:03]But the person that wants to stay in the house was like, okay, I where'd, I get the money from, to pay off the equity in the house to the other person. They thought they were gonna have to sell the house individually assets. I asked them. Do you really like the house? Their response was yes. I love the house.

[00:02:16] I want to stay here. Bearing in mind that this is the man in the relationship, I showed him a way to use money from a different source to give the property the proper amount of equity. To his wife so she could get a different property. And he was able to maintain the house, and it was affordable. He was thrilled because he thought he had to sell the house and lose the house that he works so hard to remodel and get the way he wanted, and he loved it, and she did not, and she wanted to move on, and he thought he was gonna have to lose it.

[00:02:43]He did not. I've also run into people that through the divorce, if I'm divorced, the decree said one partner or the other partner, a set amount of money. It never said where that money had to come from or what form it was in. And in talking to partner one, they just wanted to write a check from the first available thing to give it to partner, to make the whole thing go away.

[00:02:59]But in hindsight, that would have cost them a lot of money in taxes and penalties and put them in an inferior position. So we were able to discuss, okay, here's where we should pull the money from. And we did it in a systematic, intelligent way. And it's saved partner, number one, quite a bit of money in taxes and potential penalties partner.

[00:03:18] Number two, they got everything they were owed and in a timely fashion. And we're happy with getting the money, and partner one realized that if they'd done the way they were going to do it without first consulting with me, it would have cost them far more in taxes and penalties. And we were able to avoid that.

[00:03:33]really. Work with a financial advisor. It could be that depending on the relationship, both parties may want to keep the same financial advisor, or you might want to find somebody else. I see pros and cons to both or the past several years of my clients. Some clients have gotten a divorce.

[00:03:47]They both retained me. We had a relationship, though. Going back to the prior one case, 10 years, the other case, 15 years, we worked together before the divorce. And they both knew that no one knew the situations better than I did. And they both hired me separately. And we split up the relationship and the contract so that each in our separate contracts, I couldn't divulge Anthony on either side.

[00:04:07]And I worked with both sides. I knew the kids. I knew the husband and wife. I knew what they wanted to accomplish, and we worked together, which helped make it more amicable, and everyone got what they needed. And we were able to work with both sides. Now, the attorneys, still two separate attorneys, got their fees.

[00:04:22]And it still dragged on longer than it needed to. But when the rubber met the road of where money was coming from, what was going here, what was going there, we were able to work together, sorted out, and it worked very well. I spoke to the clients that have also divorced the same thing I worked with both sides.

[00:04:35] And some of them were a couple of years removed from divorce now, and both sides continue to work with me. And it goes smoothly. If the divorce is much more contentious or much angrier, it doesn't hurt that one side. It's a different advisor, but I really think that both people should have some advice.

[00:04:51] So it's handled properly. And honestly, especially when the divorce decree comes down from the court and says, X number of dollars needs to change hands. And it doesn't say where it's from. It gives us a great amount of planning to do to protect both parties. And oftentimes, to the divorce decree, we need to get X number of dollars in insurance.

[00:05:08]Life insurance in place to support the divorce decree. At that point, we take a look at, okay, what sort of insurance do we already have? What sort of insurance do we have from work? And what are the most cost-effective options? If we have to add more in what type of insurance do we have to add to the portfolio to fulfill those obligations w we can set that up and make that happen as well, instead of the person who's trying to.

[00:05:28]Shop around on their own online. We were able to do it in a much more systematic, intelligent, and cost-saving manner. The reason I want to focus on men is this isn't necessarily reflective of my client base. But nationally, the number I see is that oftentimes the man leads the financial discussions with the advisor.

[00:05:47]when the divorce occurs, the wife will often get thrown adviser, but the men tend to circle the wagons and internalize and don't reach out to their advisor for help. And I think they really need to reach out to their advisor for help, or if they're advisory to someone who helps them manage some money or make some investments.

[00:06:03] And I don't have a true relationship where they're meeting with the person several times a year and doing the planning. They need to start that you need to find someone who can do true planning and work with them to help them through that process. So men don't. If you're going through a divorce, please don't ignore that.

[00:06:16]Take care of your own mental health and take care of your financial health. And consults and professionals. And anybody going through a divorce should have a professional. I see it where the men often neglect that aspect, and it's not good financially for anyone involved. So that's my 2 cents on the divorce.