160. Divorce Explored: Blindsided by Divorce: Why Financial Clarity Should Be Your First Move

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Welcome to WeChat Divorce, hosted by Karen Chalu, Legal Liaison and Catherine Shanahan, CDFA.

Each episode we sit down with divorced professionals and industry experts to provide insights and frank discussions about real people, real situations, and real divorce to help you achieve your best life post divorce.

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Welcome back to Divorce explored with WeChat Divorce, the podcast where we talk about all the financial realities of divorce, not the headlines.

Everybody knows too much about headlines anyways, but, and we’re all acutely aware of them, but we want to talk about the real life impacts you need to understand.

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And today we’re going to talk about blindsided by divorce and why financial clarity should be your first move.

A situation that’s all too common when a spouse is blindsided by infidelity or suddenly served with divorce papers.

It’s it’s shocking, Karen, I know.

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And it’s so emotional from everyone and it leaves people paralyzed.

But what should you actually do first?

You know, we keep hearing this and again, we mentioned the news and it’s been quite disturbing to keep seeing what happened at that concert and nobody really thinking about the effect on everybody involved.

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I feel like our our culture is just driven by sensationalism and people are are really experiencing that this situation.

And if I, if I were facing this myself, I would feel so disempowered and so dejected about how news of blindsided by divorce can just just be exploded and used for purposes other than, you know, understanding that it’s real people, real families involved.

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I know social media has been going crazy and they don’t even know the real story, right.

OK, we know what we saw and it’s disturbing.

I agree.

And it’s terrible to find out that you know your spouse is cheating on you.

And who knows if they’re cheating?

I don’t even know they read into it too much.

But there’s you know, we get a calls every day when we’re hearing about this stuff and there really is a trickle down effect to what’s happening.

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So imagine waking up every day and having to see this on social media.

Social media and divorce is just terrible.

Yeah, it is a traumatic emotional hit for sure, whether it’s portrayal, infidelity or or just the unexpected.

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I want a divorce that, you know, you may have been dreading, may have you know that news may be coming.

It’s still devastating.

But acting purely on emotion can be financially dangerous.

And that’s what we’re about here at My Divorce Solution.

That’s so true because the first reaction is go call a lawyer and call a shark.

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You know, I just love that phrase.

Call a shark.

I don’t even know what a shark is.

And when it relates to a lawyer or even to retaliate.

You know, she, I saw a lot of posts.

Now she’s going to walk away with all his money and he’s going to lose all of his money.

Well, hello, it’s probably marital money.

She’s walking away with her own money, right?

3:22

But your first move isn’t necessarily always going to hire a lawyer.

It’s means get yourself prepared, get yourself the clarity you need, especially the financial clarity because the decisions made in the panic can cost you for years to come.

Exactly.

3:39

And you know an attorney is not going to solve all your problems.

They may help you understand how to protect yourself logistically and how things work.

That is good information to have.

But if you think they’re going to answer all your problems for you, especially your financial questions, they’re not.

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They’re going to ask what do you want?

And look, we respect attorneys.

They do play a vital role.

But when you’re in shock, a lawyer’s job is to protect you legally and not really to help you fully understand your finances.

That process is long and tedious, and that’s where too many people get lost and end up racking up attorneys fees that sometimes are more than half of the marital estate.

4:25

Yeah, which is why we created the divorce financial portrait to be that first step that gives you the confidence before you ever step into a lawyer’s office is ideally the best way to do it.

It helps you understand what you own, what you owe, and what your financial picture really is.

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And that, Karen, is like probably the most scary part for a lot of people because they don’t really know what the picture is, right?

They’re they’re caught up in these emotions of what’s happening and it’s so tolling to go through the emotional part of it to understand what the financial picture looks like almost becomes a back burner because people are saying just get the most you can take them for everything they’ve got.

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You know, what does that mean?

What does that even look like?

Yeah, and I, I know from experience and you probably have stories just like this, but I was speaking with a client yesterday and, you know, we were talking about an upcoming mediation and all the numbers are out on the table.

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She’s she’s acutely aware of the numbers, but not necessarily settled in on what she wants.

And so to listen to her talk about, you know, whether it’s this real estate or whether it’s a cryptocurrency or whatever the, IT may be, it was interesting that she was still struggling with the emotional connection to a home, to a business that she helped develop, to cryptocurrency.

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That has been the the bang of this divorce.

You know, do I want half of it because I fought so hard to even get it valued.

So all of these emotions are running around even when you have financial clarity.

Imagine if you didn’t have the values and you were still having to figure out what you want.

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That’s tough because mediation is set up to settle.

And most, most of the time people go to mediation without, you know, all of the full information and data.

Yeah.

You know, you bring up that emotional part and even though you may have some financial clarity, it’s hard to unravel that emotional part.

6:28

And I think a lot of that has to do with long term marriages.

You know, whether you’re blindsided or you were the one that decided you wanted a divorce, it doesn’t really matter.

Even if everyone says your spouse is a horrible or you, you’ll be better off without them.

6:43

You know, that’s another big one.

Although that may all be true, it’s still really hard to end a marriage.

You know, it’s hard to cut off those accounts and know that you’re separating them and walking away.

And even if you’re financially clear, you you should still give yourself the space to say, OK, this is going to be a new me.

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And you know, this is then when you hire a financial planner, when you know what you’re going to walk away with so that you’re set up and you can understand the impact to anything that you do financially moving forward.

So it it, it doesn’t just happen overnight.

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It really does take a lot of time.

And that’s why I get a little frustrated when I see these sensationalism of these social media posts because it’s for a minute in time of somebody’s life that they could have had 20-30 year marriage to or kids or, you know, it’s portraying something and you don’t know the whole story.

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So even with financial clarity, you’re right, there is that emotional component always.

And so without financial clarity, you’re just forever living in a fog.

That’s so true.

And you know, the, the space allowed when you’re getting financial clarity really helps to neutralize or balance out the trauma, the emotion and your ability to make good decisions.

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Because in the beginning, you just want it to be over.

You’re, you’re upended.

Everything is trauma.

And you tend to talk to a lot of people and ask a lot of questions and give your power over to a lot of people.

And if you just give yourself some space, you can make much better informed decisions once you understand and know and you have the space.

8:31

Yeah.

So there, that brings me to the client yesterday.

I’m sure you’re going to remember this message in our portal.

And she was almost apologizing for not having all of her data uploaded yet.

And, you know, she works full time and she has to make a decision about a pension payout, but all her data isn’t in.

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So we can’t even really sort through all that until it is and it is in.

And she was apologizing at how hard it is to get the information together.

And we have a system that it’s pretty detailed.

It helps you.

So imagine if you’re not going through our system, how overwhelming it is, you know, and our point to her was, listen, you’re doing a great job.

9:10

Take your time.

You know you will.

You are getting yourself organized.

It just doesn’t happen overnight, you know?

So if she wasn’t going through our process, she would start making these other decisions about her pension and anything else without being organized.

And you don’t know how that’s going to bite you in the ass moving forward, right?

9:26

So I’m just so proud that she’s taking this time to acknowledge that this is hard, it takes a lot, and and that she’s doing it the best that she can.

And our process is set up that there’s no time frame.

We’ll move at your pace or we’ll move faster if we have to, right?

9:43

So her getting that clarity is the best gift she’s giving herself and that space that you mentioned to take the time to get that in.

And and she, she also made a phone call, you know, because we said we need more information.

She’s like, OK, I feel better.

I don’t need to make this decision until September.

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So at least it gave her that breathing room to say I don’t need to make these decisions today that will impact my life forever.

Just because you got a request, right?

Yeah.

And that’s the point with being blindsided, you know, blindsided is giving, most people give a knee jerk reaction to that, right?

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Because they’re angry or there’s just sad or whatever it is.

And so they start moving forward in directions that they don’t even know that they want to move forward in those directions.

So coming through our process, another thing I love about it, it gives you that space and that time to kind of align your feelings with with what is actually going to going to happen and give yourself that time to get prepared to make decisions.

10:45

Yeah, exactly.

So our process at My Divorce Solution includes that financial clarity phase combined with a legal liaison, meaning we work with attorneys to make sure you’re protected while you get clear on your financial reality.

I’m on the, I’m one of the legal liaisons here and I’m on calls with attorneys almost every day of the week.

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And it’s helpful to the client to hear us ask questions very pertinent to their financial components, their marital components, so that the attorney can reply with answers.

It’s, it’s just a very helpful exercise because so many times the attorneys or the attorney’s team don’t go as deep as it needs to be for you to understand the financial impact of any of the decisions.

11:35

So you know, for instance, yesterday I was on a call and we were talking about the family business and we had seen an SBA loan people call them a pandemic loan.

And so we were talking about the, our clients exposure to a personal guarantee.

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Nobody had thought of that, but the loan was almost $1,000,000, right?

So that has to be factored in.

And so you just take one little question like that and multiply it by 1000.

That’s how we help our clients everyday get clear.

12:11

Yeah.

And it’s not about dragging things out.

It’s about knowing what to ask and how to ask it, which is very empowering.

So when you walk into the legal meetings, you’re informed, you’re prepared, you’re confident, and that’ll make the legal process smoother for you.

And it can reduce some of your costs and your anxiety.

12:26

So what, Karen?

What what you’re saying and what you should be hearing, is that just the way you phrase a question to an attorney can have three different answers to it.

So you have to know really what you’re asking so that you get the answers that you need to confidently move on to the next phase.

12:44

It’s so true.

You know, a lot of subpoenas go out in a divorce, right?

And then the responses come back, no records.

What do you mean no records?

I know there’s accounts that exist.

Well, a lot of times there’s no records because either the wrong entity was subpoenaed or the wrong information was asked.

13:04

Every single time we encounter that.

So it’s in that space of really understanding because a client wouldn’t have any ability to ask those types of questions.

They don’t even see the subpoenas that go out.

A lot of times the clients and then they get a bill that these subpoenas when it went out.

13:21

So they don’t even get to approve them because people don’t know to ask.

Let me see them before you send them out.

It’s your right to see them before they go out.

I mean, and that made me think of something.

Oh, talk about a couple of cases.

We, we discussed this morning in our morning meeting about, you know, forensics people go higher forensic.

13:39

We don’t know what the scope is.

Share the story about You know they need an additional fee.

Oh my goodness.

This has happened several times in just the past month.

We get these forensic reports in business valuations or whatever the IT may be, and the report ends.

13:56

We, we can’t have a conclusion here because we didn’t have enough data.

So this week I, I got a report in like that and even more egregious than a report that is meaningless to everybody that was written because mediation is coming up next week.

14:16

It’s still not a helpful report.

The report didn’t even identify what records they did have and what records they were able to review.

So that was $10,000 on a three page report that essentially said we looked at records based on the records, we’re missing records and so we need more records.

14:41

And because we need more records, we cannot give you a conclusive determination here, $10,000 and they will not pick up and look at more records until the client pays another $7500 in every team.

15:00

That’s why you have to know why you’re hiring a forensic or a business evaluator.

What is the scope of their work?

What do they need to get you what you need?

What is the deliverable you’re waiting on?

Like what is it?

Yeah.

And you know, I get the fact that if if you’re working with an attorney and it’s very, you know, adversarial and you may need a forensic, I understand paying the retainer because you want a forensic who works closely with your attorney and with the court.

15:29

But it doesn’t mean that they need to work ahead of documents being available.

And so that’s where things start coming off the rails.

Yeah, yeah.

So when you have your divorce financial portrait, you’re not just reacting, You’re making decisions based on facts, not fear.

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And that shift can really change everything in your divorce process.

And if you’re blindsided, this is the way you regain control.

Get clarity.

Financial clarity is so important to get protected and then make your legal moves.

So if this, if our discussion today resonates with you or someone you know who’s been blindsided, share it with them please, because the first step doesn’t have to be a panic call to a lawyer or multiple lawyers.

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It can be a smart move towards financial clarity.

And we’re here to help you make empowered decisions, even in the most shocking moments, because informed decisions protects you.

Thank you for joining us on The Divorce Explored today.

And remember, when divorce is unexpected, clarity is everything.

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Learn Learn more about us at My Divorce solution.com.

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We’ll see you back here for our next episode.