Welcome and Introduction to Building Stability

Speaker 1 0:08

Good afternoon everybody . My name is Alex Hunt and I'm the managing attorney of Hunt Law Firm . We're a law firm dedicated to family law and our family law clients . We serve clients throughout the greater Houston area . I'd like to welcome everybody to today's live chat Building Stability for Women Property and Financial Guidance After Divorce , which is also being recorded for our podcast , the Texas Family Lawyer Podcast . When this episode is published , it'll be our one year anniversary since we started the podcast , and it has been an incredible experience being able to have these really deep conversations on the podcast every month with attorneys and financial analysts other experts in their field about how regular people , whether they have experience in the family law system or not , can approach family law , divorce , child custody , estate planning issues in the most effective and cost-effective way possible .

Speaker 1 1:05

If you're watching this live on YouTube or Facebook or LinkedIn , please join our conversation . Take a minute to look up the podcast . Wherever you listen , it's called the Texas Family Lawyer Podcast and if you are watching on one of those platforms , please send us in your comments . We'll be able to ask our experts those questions at the very end of our one-hour seminar Today . We have assembled a very special panel of experts for our conversation and I'm really looking forward to the conversation . And to help moderate our conversation , I'll hand the reins to Hunt Law Firm Senior Attorney Melissa Massou . Thanks , everybody .

Speaker 2 1:47

Thank you , alex . Good afternoon and welcome to those of you who are joining us today . My name is Melissa Massou and , as Alex mentioned , I am one of the two senior attorneys here at Hunt Law Firm . I've been at Hunt Law Firm for about seven years now , and today's subject matter is something I've been wanting to present on for years . I started as a family lawyer , primarily helping women in difficult situations involving physical abuse , financial abuse and or emotional abuse .

Understanding the Role of Divorce Financial Analysts

Speaker 2 2:27

There are just so many women in these abusive or just financially disadvantaged situations who just don't know what they can or cannot do in a divorce , what their rights are or who even to speak to . So that is the goal for today . I want to give the audience members some crucial information that will help you all understand your rights , your options and what you can do in a divorce and what you can't do in a divorce , and maybe give you just a little bit more peace of mind after all of this is done With that being said , let me introduce you to our expert panelists today .

Speaker 2 3:00

So thank you , ladies , first of all , for taking the time to join us today . First we have the lovely Elizabeth Love Morrison of Love Financial Group . She is a certified divorce financial analyst , or CDFA . We also have the incredible Jennifer Francois of Keller Williams , our certified divorce real estate expert , or CDRE . We have the brilliant Shelly Mitchell of Divorce Equity Solutions , who is a certified divorce real estate expert , or CDRE . We have the brilliant Shelly Mitchell of Divorce Equity Solutions , who is a certified divorce lending professional , or CDLP . And last but certainly not least , we're joined by Brie Holcomb . She is Hunt Law Firm's lead attorney of estate planning and probate . Welcome , ladies . So I want to start with Elizabeth . Welcome , ladies . So I want to start with Elizabeth . Elizabeth , this is a question that I get a lot when I recommend people talk to a certified divorce financial analyst . When should a woman seeking a divorce speak to a certified divorce financial analyst ? What part of the process ?

Speaker 3 4:03

Hi , thank you for having me today , melissa . Let me start by explaining what a CDFA is . A CDFA is a financial professional who specializes in divorce-related financial matters , so most CDFAs are financial advisors like me who are also experts in financial planning and personal finance . Many divorcing people are in a highly anxious state because they don't know where to start , and a CDFA can tell you what information you need to get the financial piece of your divorce organized and ready for settlement or trial . This can bring comfort to clients who feel buried in numbers or not sure where to start , or are wondering if they will be able to financially live on their own . Several people stay in an unhealthy marriage because they fear that financially they will not be able to support their lifestyle . Meeting with a CDFA even before you file can help ease those concerns or fears .

Speaker 2 5:16

Excellent . Thank you , elizabeth . Yes , oftentimes in my consultations with women who are nervous about their financial situation , I tell them to go ahead and contact a CDFA ASAP , even if they're not ready to file with us , so they can ease their minds a little bit . Get prepared , elizabeth . I think a common misconception about speaking to a financial analyst is that you have to have a large number of assets to speak to one , but that's simply not true . Can you tell the audience what you would do first ? Say a woman walks in to your office and she's contemplating divorce or already in the divorce process . What would you ?

Speaker 3 5:57

tell them ? Yeah . So that's another great question , melissa . I want to start by addressing the comment on maybe not having enough assets . So there's a difference between CDFA work and investing assets in the market , and most CDFAs don't have any sort of minimum for assets .

Speaker 3 6:19

We're here to help you through that divorce process . Help you through that divorce process . So some things that I really make sure to address . First one is a budget , so making sure that my client has an idea of what their budget is before they get divorced and after , and so there's usually a little bit of a shift because now it's just you and maybe children , but knowing what those big expenses are is a good place to start . Sometimes I say the word budget and it can be overwhelming , but most CDFAs will have a template for you to be able to use and have that , and knowing what sort of income you're going to need to maintain that same lifestyle is important .

Speaker 3 7:06

Another key thing that we discuss is knowing your assets . So if there's an asset that you don't understand , or maybe there's an asset that you have questions on , make a point to try to understand that . If you haven't filed yet , I would start making a list of what you know , and even if you have filed , but maybe you're in the early stages and you haven't met with a team yet , it's important to know what your assets are and if there's any debts that are linked to those assets . And then the third thing is setting goals . So sometimes that can seem kind of overwhelming to think about what a financial goal may be after or post divorce . That that will help you as you're moving through this process , to know what you're working towards is building your team , whether that's your attorney or maybe a friend , a counselor , a CDFA . Have a team around you that's helping support those goals and needs that you have .

Speaker 2 8:12

Thank you . Yes , budgeting is a very scary word for a lot of our clients and you know . Budgeting with a CDFA or budgeting period before even walking into a divorce attorney's office or filing for divorce is so important because we will need that information and we'll need to know , well , are we going to

Financial Challenges Women Face During Divorce

Speaker 2 8:37

try and go for a spousal support or temporary support of some kind right away because our client needs it , or are we okay , moving forward and it'll help establish the goals for your divorce sooner rather than later ? So budgeting is just really , really important . So , elizabeth , what are some things you , as a CDF , face as challenges for women in the divorce process ?

Speaker 3 9:02

Yep , that's another good question . I think there's a couple of things that really come to mind . The first thing is a lack of knowledge or maybe just being really unsure of the questions that they need to ask . It's common for women to have to learn a whole new set of financial skills after divorce . Maybe they weren't in charge of the finances or they just didn't pay as much attention to some of the details . I come across this a lot , with women feeling like they should already know the answer or be embarrassed to ask . My goal is to help empower women to understand their current situation better and the skills that they need in a nurturing way where they feel empowered .

Speaker 3 9:52

Another one is maybe lack of resources . A woman may walk away with you know , quote half of the assets , but her earning power might be different because she stayed at home with the kids or has always had a lower paid employment . So sometimes that means a lifestyle change is needed , and sometimes that just means some careful planning . So my job as a CDFA is to help women navigate this and make choices that fit the lifestyle that she's wanting and accustomed to .

Speaker 3 10:28

A third challenge that I see sometimes is a settlement that doesn't fit . So if the settlement wasn't carefully crafted . A woman may walk away with assets that she can't afford to maintain , like a house , or assets that she can't access like a 401k or a pension , but sometimes that may set her up for failure in the future . But I hope to prevent that kind of thing from happening . And the last thing that I see that's somewhat common is becoming fixated on one particular asset . I see that a lot with the marital home and women in particular becoming afraid that they will lose their home or be unable to afford it after divorce .

Speaker 2 11:13

Yes . So we , as the divorce attorneys you know , have to deal with , you know , all of these assets , and the biggest asset in most divorces is the marital home . Like steps do they need to take to figure out their options and avoid making emotional or financial missteps ?

Speaker 4 11:50

So , as a certified divorce lending professional , I specialize in guiding divorcing homeowners women through divorce , property division and mortgage solutions . And one of the biggest mistakes I see is people fighting to keep the marital home without fully understanding that they can afford to keep it and even qualifying for the mortgage on their own . And unfortunately , many women come to me after the divorce is finalized and I have to deliver bad news . You know that they can't qualify to keep the home or maybe they're going to do an equity buyout to buy out their spouse and they now can't qualify . So this is why I offer a free divorce mortgage planning consultation where I analyze the home with what I call a real property report , and this report helps divorcing homeowners determine if they can afford to keep the home , buy out their spouse or if maybe selling and purchasing a new home is a better option . And I review income , assets , debts , any maybe child support they're going to be receiving in the future once the divorce is final and any spousal support you know we don't see a whole lot of spousal support in Texas , but sometimes maybe maintenance support Create a realistic financial plan .

Speaker 4 13:15

And for women that are unsure if they can keep the home , the key is really planning early , getting with me before they're heading to mediation , before the divorce is final . First , they want to really understand the financial picture , gather financial documents , including mortgage statements and tax returns , credit reports , things like that . Secondly , determine the home's equity

Navigating Mortgage Options Post-Divorce

Speaker 4 13:40

and whether an equity buyout is going to work or refinancing is even an option . And thirdly , work with professionals you know whether it's a CDLP like me or a CDFA to ensure keeping the home even fits in the long-term financial goals . So most importantly is don't let emotions drive the decision . So while you know the home may hold sentimental value , you need to consider whether it truly is affordable post-divorce . And starting the divorce mortgage planning process early ensures they're going to make informed decisions before finding the final divorce decree . And so you know just really needing guidance and that's what I'm here for and helping put a solid plan in place before the divorce is final . Thank you , shelly .

Speaker 2 14:27

And Shelly , as a CDLP , have you had people come to you thinking that they absolutely cannot afford to keep the home ? But they came to talk to you , just to talk to you , and they realized they can in fact keep the home if they wanted to .

Speaker 4 14:41

Absolutely All the time actually . They wanted to Absolutely All the time actually . So I've had many clients come to me thinking they can't afford to keep the home , only to realize that with the right strategy they actually can keep the home . So a big part of my job as a CDLP is helping homeowners see the full financial picture , not just what's in front of them at that time . And so many assume , you know , they can't qualify for a mortgage on their own .

Speaker 4 15:08

But once we factor in income sources , you know whether it maybe be like child support , maybe maintenance support or even creative financing solutions . The numbers can really tell a different story and that's another reason getting with someone you know a CDLP or CDFA early in the game is really important . So , for example , I had a recently I worked with a woman who was ready to sell because she assumed she wouldn't qualify for a mortgage after her divorce . But after reviewing her income and her assets and just structuring all of her documentation of her divorce settlement , we found a way to use her support payments as qualifying income and with a refinance and some smart debt restructuring she was able actually to keep her home without overextending herself . So you know , that's why it's so important to consult with a CDLP before finalizing the divorce and we can structure the settlement in a way that improves mortgage eligibility and financial stability .

Speaker 4 16:14

Sometimes it's not about whether you can afford to keep the home , it's about having the right financial strategy in place to make it happen . So for anyone on this podcast with us today , if you're unsure , you know let's have a talk . You know it's free to have that free consultation , and a divorce mortgage planning consultation can give you a lot of clarity and help make the right decision for your future . Thank you .

Speaker 2 16:39

And I believe Elizabeth mentioned this and then you know seeing the connection having a team right , because if you talk to Elizabeth early in the process , when you talk to Shelly now , you have all your resources and budget run and now you're talking to Shelly to get an idea of what you know your options are , and your divorce attorney can also step into that conversation and figure out the legal strategy of how we're going to get those assets . So , working as a team which we do do at Hunt Law Firm , these are all women that we work with . You know to make sure that our clients are taken care of from every single perspective financially . So say , someone comes to you , shelly , and has done all that work and you realize that refinancing or a buyout is an option for this client . How long does this process usually take ?

Speaker 4 17:41

So the process is going to . You know it depends Are they going to do a buyout or are they going to purchase . A buyout typically is going to take about 30 to 45 days , depending on if we've started the process early , before the divorce was final . So I say 30 to 45 days . There's a pre-qualification process , there's an application process . You know an appraisal needs to be ordered . We've got underwriting , got your final approval , you've got closing , you closing some legal steps and so forth . But you could be looking at some potential delays can come from waiting for finalized divorce decree , support payment documentation . When you're waiting for , maybe , child support to kick in . There is a three-month waiting period on something like that . Maybe you know you could have some title issues , but for the most part 30 to 45 days for a buyout and that's why starting early is always the key part of it , before the divorce is final .

Speaker 2 18:43

It helps to prevent any type of stress and then it's going to ensure smooth transaction of stress and then it's going to ensure a smooth transaction Right , and it also helps if you are sitting in a mediation , like you're divorce determining , knowing you know what that timeline is . So we don't go ahead and agree . You know , sometimes the other side will push for a 30 day buyout situation and if I'm talking to you , shelly , I know well that's not possible , so we're not going to agree to that , and it helps a lot . Thank you so much , shelly . So , jennifer ,

The Critical Role of Divorce Real Estate Experts

Speaker 2 19:19

I kind of want to go to you next . So many people in our audience and I get this question a lot when I talk about , you know , talking to a CDRE when there is a marital home evolved , what is a CDRE and why are CDREs so valuable during a divorce ?

Speaker 5 19:38

Thanks for having me . By the way , I'm happy to be here . I've been in real estate for 22 years and I've always sold different types of housing . So over the years I run into many families , women who are going through the most difficult time in their lives and it became apparent to me that if I was going to provide the highest level of service , I needed to increase my education , which it was then that I decided to pursue the designation in divorce real estate .

Speaker 5 20:04

And what makes us different is a CDRE is trained extensively on selling real property and family law cases and to do so as a neutral , unbiased third-party expert . We're also required to adhere to a stringent code of ethics to ensure a smooth and successful transaction , supporting all the parties equally and ensuring that the orders of the court are followed . We also act as a witness in court and we're trained to testify when needed . So frequently divorce real estate sales they're highly emotional and ensuring that everybody feels fully supported through the time and , with a neutral , unbiased third party , it ensures that we have a smooth and successful transaction .

Speaker 2 20:51

Great and you mentioned being involved , very involved , in the process of divorce , being a witness and all of that . I know from talking and working with Elizabeth and Shelly . Y'all also can be a part of the mediation process and a part of all of that as well . So it's like I said , it's just so important , if you're talking about financial stability and divorce and what you can and can't do , to have that team around you so that every step of the way you have you know this great team that can even sit on in mediations with your attorney , so that you're getting the absolute best you know possible deal and you're you're sitting there knowledgeable and not kind of in the dark . So , jennifer , if someone comes to you wanting to buy a new home without their spouse on the paperwork so we're going through a divorce , or they haven't quite even filed for divorce what do you tell them ?

Speaker 5 21:56

Yeah , so this happens fairly regularly . Everybody's trying to make plans for their future and there's just a process involved , right ? So first and foremost , I want to understand at what phase they are in the divorce . Have they even filed ? Did they purchase the home ? If we're selling a home and they want to sell before we file for divorce , did they purchase the home jointly ?

Speaker 5 22:19

A lot of times I have to educate on community property and what that means . As Texas is a community property state , it means that all assets obtained during the marriage would be subject to joint ownership . So if you purchase a home prior to finalizing your divorce , that could definitely cause some challenges . So I work to gain knowledge . I like to engage the attorney and understand if there are court orders regarding the marital property , regarding future housing requirements , if there's children involved and where those homes may need to be . So usually , the best next step really is to meet with a CDFA and a CDLP to evaluate what the available options are and ensure that we're following the right process , because we don't want to put the cart before the horse and get ourselves into a sticky situation where there's an asset obtained during a marriage that wasn't obtained in the correct manner , and protect the client from that .

Speaker 2 23:16

Right and we always Brie will attest to this as well we always advise our clients not to buy that home or try and buy a home during the divorce , unless it's absolutely necessary , unless the other side is 100% on board , unless we have an agreement on paper that how it's going to be divided , et cetera , because it does create so many issues .

Speaker 5 23:45

It can be done , but not well and not easily . So it's just it's smarter to wait for sure .

Speaker 2 23:52

Now , as a CDRE , can you give the audience some tips as to what someone who needs to sell a home should be doing to maximize that home's ?

Speaker 5 24:00

value Absolutely . So , most importantly , the best first step is really to conduct a home visit so that I can , or another CDRE can , evaluate the condition of the property and make recommendations , because what we don't want is you to go and spend a bunch of money or time on something that will not provide a returnable value in the marketplace If the client is not ready for a home visit . Best first steps always include performing general maintenance on the property . Things that I see that are often not done are performing regular AC and roof maintenance . Those can be very expensive repairs that could become a problem during a sale . So making sure those maintenance items are done and that we know of any existing situations ahead of time and then addressing them , repairing any known defects or things that the family knows don't function before going on the market is absolutely the best step as well .

Speaker 5 25:05

So then you have things like decluttering , depersonalizing as well . So then you have things like decluttering , depersonalizing , doing a really good , deep , clean , power washing driveways and back patios . Anything that you can do to improve the physical condition of the property is ideal , because that's going to allow us to maximize what we can get when we sell the property . So , as I mentioned , I don't recommend investing in any upgrades or updates before a property visit , as I want to make sure that my clients are spending their money wisely . That will improve the value and the resale potential of the property . And then if there are , if there is work or repairs that need to be made or items that we could do that would improve the value and there's not funds available for that , then we do also have some resources available or we could get creative when needed , so those are always an option .

Speaker 2 25:55

Great , thank you . So in today's market which has been a little bit crazy what would you say to someone who's looking for a realistic timeline as to selling or buying a home ?

Speaker 5 26:08

Yeah , so , as with every real estate market , it ebbs and flows , right . We've seen a lot of changes since COVID and the market's kind of had a lot of shifting , but it typically always has a cycle right . So , and we're in coming into the spring cycle , so right now is a great . If people are considering selling . This is when we start to pick up for the year and we're really seeing that happen . So homes that are in excellent condition are actually selling really well , and so it's important that we prepare for either scenario for buying or selling , but understanding , you know , what's happening in that neighborhood , in that home type .

Speaker 5 26:47

Every neighborhood is very different .

Speaker 5 26:49

So it's important that we do a really deep dive and analysis on what's happening in that specific neighborhood , in that market , because every submarket within our , within our area , sells differently . So we and we do this by utilizing our resources with our partners , with our CDFA , our CDLP and your attorney and the four of us , as we mentioned , kind of act as a hub of a wheel . Any missing part of the hub would not allow the wheel to function at its highest , at its highest output . So having your team and ensuring that we're all together and communicating correctly will make sure we know what the ideal timeline is , but once we get a clear picture and we're ready to list the home or to purchase a home , a good expectation is usually anywhere from 45 to 90 days , depending on where we are in the approval process . Have we established our budgets already ? Do we know what our assets look like , you know ? Do we have our divorce decree finalized and know what our , what our budget's going to be ? Once we're really solidly ready , 45

Common Financial Mistakes in Divorce Settlements

Speaker 5 27:48

to 90 days is a good timeline .

Speaker 2 27:49

Great , and so say the parties . Go through , shelly and Jennifer and both of y'all , and maybe they've spoken to me as their divorce attorney and now we're ready to negotiate their actual divorce terms in a mediation . Elizabeth , I'm going to come back to you . What are some common mistakes you see your clients making when finalizing those terms of the divorce ?

Speaker 3 28:16

So I think the most common thing that I see is not asking questions . I touched on this before , but as you're going through the divorce process , you want to make sure that you're understanding exactly what you need to live off of and what the settlement is going to be . A lot of times , like I mentioned earlier , women may feel embarrassed or like they should already know the information , but knowledge is so important as you are dividing up your family assets . So ask questions and if you're in a situation where you maybe have a team and you don't feel comfortable asking questions , then find somebody that you do feel comfortable asking questions . I try to make a point of doing that with my clients and having check-ins and making sure that they're understanding what we're talking about .

Speaker 3 29:15

The second thing is and I know this has been touched on today too is letting emotions cloud your judgment .

Speaker 3 29:23

Divorce is a highly emotional time , so it's natural to have those ebbs and flows of emotions , but making sure that you have a team that's supporting you to help you see logically and long term , which is the next thing that I see a lot of is failure to think long term . It's very tempting to just try to get to the settlement and have it over with , but you want to make sure , especially as you're putting together your financial future , that you're looking at well , just do division of assets , for example , and making sure that those are going to be able to last you past the settlement date , that you're able to have the income that you need to support those expenses that you're going to have . And , lastly , not getting help , not reaching out . I've worked with a lot of women and after the divorce they just kind of spin out emotionally and a divorce is a massive change and it can be very hard to navigate alone . So just realize that and know that there are people here , like the people in this podcast , that are here to help you throughout that process .

Speaker 2 30:45

Thank you , Elizabeth . I'm going to go to you , Shelly , and kind of ask you the same question what are some of the most costly mistakes you've seen clients make in their final settlement ?

Speaker 4 30:56

Sure . So one of the biggest mistakes I see in divorce divorcing homeowners is keeping the home without confirming affordability . So I see so many fight to keep a home without confirming that they actually qualify for a mortgage , leading to financial strain or even foreclosure . Or they fight to keep the home and within six months to a year later they're selling their home because they realize they cannot qualify for equity buyout or it's too much house and they should actually be selling the home and not have retained the home . The other thing that I see is not refinancing to remove an ex-spouse and that ex-spouse that has moved on . They don't realize that it is still affecting their credit . And so the spouse that has retained the home , if they for some reason do not make timely payments on the home , it actually affects the spouse that if their name is still on the mortgage , it will affect their credit , and so there's some misconception about that , and so that is something as well . And then relying on child support , and so lenders require proof of consistency of payments for three to six months before even being able to use the and count it as as income for qualification purposes . And so you know , divorcing parents homeowners will come out of a divorce and immediately want to qualify to either one keep the home for an equity buyout or want to purchase a home immediately , and they are relying on child support payments and they have not received it for three to six months yet and so they cannot qualify for a mortgage loan .

Speaker 4 32:44

And then overlooking hidden cost of home ownership . You know it's not just about a principal and home ownership . You know it's not just about a principal and interest payment . You know there's property taxes and homeowners insurance , which we all know have increased quite a bit over the years , and maintenance costs and homeowners or HOA dues . And that just needs to be taken into consideration when you know someone wants to keep a home . So just fully evaluate the cost before deciding to keep the home and then splitting up equity and considering taxes . People overlook capital gains taxes and so of course I'm not a tax accountant , I don't practice law , but I always say get with a CDFA or a tax accountant , speak to your attorney , because you know when you're splitting up multiple homes or maybe investment property , there could be capital gains and just proper planning , expert guidance and just avoid these costly mistakes .

Speaker 2 33:45

Thank you , shelly , and I also tell my clients I'm not a tax expert . You need to talk to somebody who is , and the tax impact of certain assets is something Elizabeth can help with . But certain assets , like a home or a IRA or whatever , have different tax consequences that people don't think about . So that's something that we try and think about as your divorce attorney when we're sitting in mediation , going okay , well , do you want this or this ? It's going to give you a different value . Really , I mean , on paper it looks like the same value , but the tax impact might actually change that value , right ? So yes , so thank you , shelly . Those were all excellent tips . So , jennifer , I'll go to you next . Any tips from a CDRE as to what the audience should be prepared with going into a final mediation from your perspective .

Speaker 5 34:43

Yeah . So a few items that come to mind is the biggest piece is having a solid expectations on the value of the marital property . Often getting a formal appraisal is helpful . It's not required , but it's helpful . I can also provide a market analysis reports , if they're accepted as means to the parties to establish value , so that way we know what that asset could potentially sell for . That way we know what that asset could potentially sell for Then be prepared to set a list price as part of the mediation , because those terms really do need to be in writing to avoid potential future conflict .

Speaker 5 35:20

Then and we want that written into the decree a firm decision on how the proceeds are to be split and if attorney's fees will be held from those proceeds , because it's important that we have a detailed decision as to how proceeds are going to be applied If the property hasn't been sold at the time .

Speaker 5 35:39

You want to write in the preferred CDRE's name into the decree hopefully me and we want to make sure that we make decisions on how personal property are to be split and how the outspouse will collect them , because those details are important for logistics , especially if there's conflict .

Speaker 5 35:58

Is there a required school system or county that the parties are required to live in for the children or distance away . Those are things that we need to know and if they're going to be written into that decree to ensure that we make those decisions so that I can have those in writing and be able to hold up the court orders , then , if we haven't sold the property at the time of the mediation , we'll want to know who's

Estate Planning After Divorce

Speaker 5 36:23

going to maintain the property If neither property is living there . Who's going to maintain utilities ? Who's going to do any necessary repairs while the property If neither property is living there , who's going to maintain utilities ? Who's going to do any necessary repairs while the property's on the market , if there is a property to sell ? So there's a lot of details that need to be worked out that get written into that decree to ensure that we don't miss anything and that we're able to get the property sold and make the most money for it .

Speaker 2 36:46

Now let's pretend the audience has a final decree of divorce . We settled in mediation and we have a divorce decree in hand that's actually signed by a judge . It has the assets divided and the parties are now officially divorced . So , Elizabeth , what do you tell your clients to look out for as far as the financial issues after a divorce ?

Speaker 3 37:08

Yeah , so that's something really good to keep in mind . A lot of times you know you get to the end of the settlement and you think , yay , I'm done . But on the financial side there's still quite a few things to make sure are done and implemented before you can kind of rest easy . So one of those is if you are getting your ex-spouse's 401k or maybe a pension , you'll have what's called a qualified domestic relation order and you'll want to make sure that that gets processed . That's something that does not happen automatically at settlement . If you are getting an IRA from a spouse , you're going to want to make sure that you open up an IRA in your name and get that transferred . Again , that's something that I can help you with as a CDFA , but it's going to have to be done . It doesn't just automatically happen .

Speaker 3 38:03

A couple of other examples would be let's say you're getting a car and the title was in your ex-spouse's name . You're going to want to change that title . A checking account , I mean . I always recommend doing that before a settlement date . But if you don't have one , that's in your need to make sure that are handled properly after the divorce so that you can transfer those assets into your name the way that the settlement states that it should be . Oh and something else to keep in mind . It can seem like a lot , something that I recommend is just having . I have a list for for all my clients of things to go down , and so it can seem a little bit more manageable that way . Okay , I checked this one off , now this one , and so you're keeping a list of everything that needs to get done . Then , once you get to the bottom , then you can relax and celebrate .

Speaker 2 39:03

Thank you , elizabeth . So and you brought up a great point about transferring assets and making sure everything is under your name Sometimes our clients come out of a divorce and they have that divorce decree in hand and they've never had , you know , especially if they've been in a financially abusive situation where they had no control of their money and their assets . They've never had assets in their name . They've maybe never had a checking account in their name or a life insurance policy in their name or whatever . This is where I think estate planning I think everyone will agree estate planning is very , very important at the end of your divorce process . So I'll bring Brie Holcomb in to this conversation Now . Brie , you're the lead attorney of Hunt Law Firm's estate planning and probate section . How important is it for someone to do their estate planning after a divorce and why ?

Speaker 6 40:02

It's absolutely imperative . So when you go through a divorce , it's a life-changing and life-altering event . Many people compare losing a spouse even though they're still alive , almost to death . So just because a divorce has occurred , we want to make sure that our women are taking crucial steps to ensure that their new assets that they have are going to be protected . It's important to know kind of at the outset , though if you had an estate plan that named your former spouse as a beneficiary , as an executor , a trustee , an agent , under Texas law that individual that husband is going to automatically be precluded from serving in those capacities . There's a reason that divorce happened and that individual is not going to be allowed to serve in those positions anymore .

Speaker 6 40:49

The other things that I would encourage women to do I've got kind of four takeaways . First is to do an inventory of your estate . You know , coming out of a divorce , you may have done an inventory and appraisement , which is basically a fancy document that lists all of your assets and liabilities . That's kind of what we use as attorneys to help divide our estate in the midst of a divorce . In the event that you didn't do that , maybe you guys had a peaceful and amicable divorce resolution . What you can do is just kind of start to gather you can partner with a CDFA what assets do I have in my pot and just really inventory . These are all of the items that I have that I need to ensure are you know now in my estate and are going to the people that I want them to go to when I pass away . And that's going to help you identify your assets so that you're able to then .

Speaker 6 41:40

Step two update your beneficiaries . A lot of accounts that individuals have could be transferable or payable on death . So after a divorce , you certainly want to make sure that your beneficiaries are up to date and that the individuals that you want to inherit are able to inherit , and so if you work with a financial advisor , that person can certainly assist you in updating those beneficiaries . You may be able to do them on your own through the certain financial institutions that you have , and examples of those payable on death assets could be life insurance policies , retirement accounts , any other assets that are transferable or payable on death .

Speaker 6 42:20

Step three , I would say , is to create your will . You want to revise that will to ensure that your husband is now no longer a part of it , even though again automatically revoked after your divorce is finalized . But you've got to consider , you know , who are my new beneficiaries going to be ? If you don't have any children , who is going to inherit my estate ? If you do have children , who's the guardian of that child going to be if something happened to you and your former spouse ? Do I need a trust for these individuals that are going to be ? If something happened to you and your former spouse , do I need a trust for these individuals that are going to inherit from me and who do I want to be in charge if and when that time comes and I pass away and somebody is going to have to , you know , step in and facilitate the distribution of your estate ?

Speaker 6 43:01

And , lastly , I would say the fourth thing that women want to make sure they do is updating their plan for incapacitation .

Speaker 6 43:08

You know , oftentimes we're very focused on well , what happens when I pass away , but there could be many instances where you become incapacitated and cannot make decisions for yourself . If you are married , your spouse may be able to step in and take ownership and take action , but if you are divorced , we need to appoint individuals to ensure that you know a plan is going to be in place if something happened to you and you're alive , but you can't make decisions for yourself , so it's very important for women to consider all of those things . The other tidbit that I'll leave you with is you know , oftentimes women get remarried , and that's a wonderful and a beautiful thing , but when we're planning for our next estate and you've got blended families , we definitely want to take into consideration well , what separate property do I have ? What community property is going to be created ? Should I get a premarital agreement or a postmarital agreement ? Those are all things that we , as estate planning attorneys and family law attorneys , can certainly talk through to ensure that you are protected after divorce .

Speaker 2 44:08

Thank you , brie . So we have a couple of questions , so we're going to switch to the questions part of this , and so I will start with Elizabeth . This question is for you

Audience Q&A on Financial Planning

Speaker 2 44:22

how can I create a post-divorce budget that reflects my new financial reality ? What are some tips you have for that ?

Speaker 3 44:29

That's a good question .

Speaker 3 44:31

So I would start with expenses that you know you're going to have cell phone , eating you've got to eat , right and I would take a look at kind of what your budget is before the divorce so married I don't know if you have kids or not and kind of estimate what would that be on your own and these are estimates , right , because you don't know exactly what it's going to be until you're living on your own A CDFA , like myself , can give you some good guidelines and parameters , because we've seen people do it and we have pretty good estimates of , depending on where you are in life , kind of what those numbers would be .

Speaker 3 45:11

Another thing to consider is are you working or not ? If you are , what is that income going to be ? Are you going to need child care ? Are you going to have to go back to work after this ? Will you need child care ? Things like that . But that's where I would start is with things that you know and then work your way from there and , like I said , a CDFA is going to have the resources to be able to help you with sheets and templates and estimates that we've used with other clients .

Speaker 2 45:41

Great , thank you . Our next question and this can go to Jennifer are there strategies to make the home selling process easier if I have a reluctant spouse ? And this is something Jennifer's trained in as a CDRE . Jennifer , take it away .

Speaker 5 46:02

Yes . So that's a great question and that's definitely the most difficult part is when we're not in agreement on how to manage the marital property . First and foremost , it's super important to work through with your attorney to hopefully come to terms during mediation and gain agreement and get those agreements in writing Ways to make it easier . So I offer a consultation to all of my clients , whether it's going through a divorce or just a traditional sale . But I like to meet with each party separately . That way they have the ability to speak freely and I can help them through the decision and understand and really connect with them independently .

Speaker 5 46:54

As I mentioned , maintaining neutrality is absolutely the most important piece , because everybody wants to feel heard and understood . And when I'm able to hear all sides of what's going on and then really just look at the facts and the details and then have a conversation with the attorney to know where we are , what do we need to , what do we need to do , what steps do we need to take and ensure that we're all on the same page , then I will usually inspect the property as well with the in-spouse the person that's living there and then take some photos of the property , because sometimes there is the out-spouse that's not seen the property in a while and they may need to understand what the condition is , what the condition of the market is , and just really take time to educate , and usually , once you provide a high level of education and support , we're usually able to come to agreeable terms . It might take a few conversations , but we usually get there .

Speaker 2 47:53

Great , Thank you . The next question is how can I protect my credit during and after a divorce ? I think this could go to Elizabeth .

Speaker 3 48:11

I think this could go to Elizabeth . I got one . Go for it . So the first thing that I would say is I don't know what stage this person is in in the divorce , but even before you file , I would recommend having a separate credit card and opening up your own checking and savings accounts and having things in your name . Now , that is not going to necessarily help if you have a joint credit card , but I know on the legal side , I think once you file , those can be frozen and so hopefully they're not charging up the credit card after the filing has happened . But my biggest recommendation is to make sure that you're starting to transition things into your own name and you're building your own credit .

Speaker 2 48:59

Thank you . Thank you , elizabeth . Okay , the next and possibly last one we have is and I'll actually go to Brie for this one . I think it's a good one for Brie Do I have to live with my spouse while the divorce is pending ? Can I move out or force them out ? Brie , you can take it .

Speaker 6 49:23

That's a good one . So , first and foremost , it's really important to know that if you leave the marital residence , that does not mean that you are then precluded from taking that asset or you are giving up a portion of that asset . We oftentimes have clients leave the marital residence because they don't feel safe , and we're not going to penalize anybody for that . It's also important to know that when we're going through divorce , spouses oftentimes can't be in the same residence with each other because they're always bickering or fighting and it's just not good for mental health . So do you have to live with your spouse during the divorce ? The answer is no , and there's really not going to be some major consequence of I moved out of the house . Now I can't say I want it on a final order and I'd like to be awarded that . Can I move out or force them out ? Yes , you can certainly move out .

Speaker 6 50:14

The forethought is a little bit different . In you know family law , we oftentimes don't have major kickout orders where a spouse is completely removed from the residence , unless there's been some sort of major family violence . But what oftentimes happen is parties agree I'm going to be the spouse that's going to continue to reside in this marital residence during the dependency of our divorce . We confirm that in what's called a temporary order It'll also lay the terms out for who's paying the mortgage , who's paying the utilities , who's responsible for the upkeep of that residence . So we ensure that the home is going to be protected and preserved because if later on we want to sell it , we want to ensure that it's in a good condition and that people are doing what they're supposed to do in regards to bills and utilities .

Speaker 2 50:58

Great , yes , thank you , and we do get that question a lot . It is very difficult to live with someone you're divorcing , so I imagine . So we do , you know we do . We do deal with that a lot . Thank you , brie . We can take a few more . We're getting quite a few . I can take this one . It's what steps do you take when a spouse is reluctant to participate in the process of divorce or discovery ? Sorry , now , discovery is a process and you know we have lots of resources on our website at HuntLawTexascom if y'all need it .

Speaker 2 51:44

The process of discovery is very , very important in a divorce , especially if you are completely , you know not in the know about your financial assets and expenses etc . And so sometimes you know you want to go talk to a CDFA , like Elizabeth , but you might not even know what you're dealing with , and that's when you might need to take a step back and your divorce attorney needs to do what's called discovery , which is a formal way of asking your spouse for documents , and that's a question we get a lot . I don't know what assets we have , I don't know where to start , I don't know what he might be hiding or she might be hiding . So we like the discovery process a lot . I think pretty much every contested case needs to do it . It allows for us to get a good picture of the assets . But sometimes , oftentimes , we have spouses who decide that you know what , I'm just not going to give you everything . Or they take out certain months or they do something . They don't give a whole account , and sometimes they do that on purpose and sometimes they do it just out of laziness , right ?

Speaker 2 53:02

So there are certain things we do as attorneys to make sure that discovery is complete and we can see everything . The first thing we do is we do a very thorough review and we make sure we list everything and then sometimes , depending on the case , we reach out to the other attorney or the other side and tell them you know , we're missing quite a few documents here and your client's not complying , so please give that to us . And if that's not going to get anywhere we don't think that's going to get anywhere we send them a very formal letter and before we walk into court and ask the judge to order anything , we actually have to confer with the other side and try and resolve any kind of discovery issues . So we try and do that by picking up the phone , sending a letter and then we give them a deadline and if they're still not complying , if they're just deciding you know what I'm not going to give y'all anything because either they're hiding something or whatever they just don't want to be a part of the process well then we do have to take it to court . So we file something called a motion to compel and we ask for attorney's fees and sometimes even sanctions , which are a little bit harsher than just asking for attorney's fees , and we ask the courts . We show the court how much we've tried to work with them , we show the court what is missing and why it's important that we get it , and we ask the court to go ahead and give us the attorney's fees we've had to spend in order to try and track all these down and we try and get an order .

Speaker 2 54:46

We also can subpoena these documents ourselves . So if your spouse gave you or gave us one out of four of the Wells Fargo accounts they own , for instance , we can go ahead and subpoena Wells Fargo and tell them to give us everything possible and that takes some time to get and we do consider those expenses at the end and we can even , you know , ask a court to award that , if we , if we end up in court , any expenses that came with us having to subpoena documents instead of you know them , just giving it to us . We can do that to make sure we have a good idea of everything . But discovery is a very , very important process , so that's something we take pretty seriously here at Hot Law Firm when we do these divorces . The last question I think we can take is and it says , asking for a friend Can you make monthly withdrawals on your 401k after retirement ? Is it normal for the investor of your 401k to tell you how much you can take out every year ? I have no ideas , elizabeth , do you know ?

Speaker 3 56:14

I have no ideas , elizabeth , you know . So I guess my question on this would be is it the person asking the question or the spouses 401k ? So since we're talking about divorce , I'm going to say it's the spouses and answer it that way . So in the quadra that we mentioned earlier the qualified domestic relation order that will be spelled out on that legal form . So usually with a 401k or a pension , they're both treated the same way . It will be outlined what the spouse is supposed to receive . The spouse is supposed to receive , and once retirement hits , then they will start receiving those payments . And there are ways to ensure that you get those . Like , let's say , your spouse dies , there's life insurance policies that you can put in place to make sure that if they pass away or they get fired from their job or whatever the case may be that you're still going to be getting those payments . Do you mind putting the question back up there ? I was going to go to the second part of the question . Thank you .

Speaker 3 57:19

Is it normal for the investor of your 401k to tell you how much you can take out every year ? So that would be something a financial advisor like myself can tell you If you're at what we call required minimum distribution age , which is 73 or 75 , depending on the year of their birth . There's a certain amount that you are required to take out every year . Otherwise there can be penalties if you're under 59 and a half . If you're above 59 and a half but below that required minimum distribution age , you take it out and you're taxed at your income tax rate . It's counted as income , but you're not paying that penalty fee . So my advice to you would be definitely talk to a financial professional about withdrawals and how that may affect your tax in your particular situation .

Speaker 2 58:10

Thank you , elizabeth . Well , we've come to the end . This was great . Thank you so much , ladies . Y'all all had a lot of information , and I actually learned a lot too , so thank you for that that we have . We will be putting this , as Alex said at the beginning , out as a podcast . We will have this available afterwards , so we'll have all of that on our social media . So please look for that . But thank you everybody for joining us today and have a great rest of your day .