Don’t Overlook the Details in Your Divorce Agreement with Rosemarie Ferrante, Esq

In this episode of We Chat Divorce Podcast, Catherine and Karen have the privilege of chatting with Attorney Rosemarie Ferrante.

Rosemarie is an attorney licensed in New York and Connecticut, who focuses her practice on non-adversarial divorce through mediation and the collaborative divorce process.

Rosemarie believes one of the most important factors for couples who are contemplating divorce is to understand that there are many professionals who are available to assist them through the process. The professionals needed, are specific to your family.

REMEMBER: Somebody’s mediation might not be the same as yours, and the professional best suited for you might be different based on your specific needs and the needs of your family.

Let’s Chat… Details In Your Divorce Agreement:

• Divorce is NOT One Size Fits ALL
• Make Sure Specific Financial Details are Spelled Out
• Know the Financial Impact Before Signing
• Utilize a Reviewing Attorney

Resources:

https://www.divorcemediationct.com/attorneys/rosemarie-ferrante/

 

If you have questions for us or a topic you’d like us to cover, contact us at hello@mydivorcesolution.com or visit MyDivorceSolution.com 

Karen Chellew:

Welcome to We Chat Divorce podcast. In this episode, we have the privilege of introducing attorney Rosemarie Ferrante. She’s an attorney licensed in New York and Connecticut, who focuses her practice on non-adversarial divorce through mediation and the collaborative divorce process. Welcome, Rosemarie.

Rosemarie Ferrante:

Hi, lady. [crosstalk 00:00:00:25].

Catherine Shanahan:

Hello. [crosstalk 00:00:30] to see you.

Rosemarie Ferrante:

Me too.

Karen Chellew:

Happy you’re here. I feel like we have a lot to talk about today, but first, why don’t you give us a little bit of background on how you ended up where you are today and focusing on non-adversarial divorce?

Rosemarie Ferrante:

Sure. Again, my name is Rosemarie Ferrante and I’m an attorney licensed in New York and Connecticut. I began litigating many, many years ago and quickly realized that it was not the best process for families to transition through the divorce process. I chose to focus solely on non adversarial divorce, mediation, and collaborative divorce. My practice is in Connecticut. I one of, one of the most important things I think for people who are contemplating divorce should understand is that there are many professionals who are available to assist them through the process. The professionals needed, are really specific to your family. Somebody’s mediation might not be the same as yours and the professionals there to assist you might be different based on your specific needs and the needs of your family. I do try to help people identify those resources and professionals to better assist them through the process and to help them make the best decisions they can for themselves and their family.

Catherine Shanahan:

That’s great. That’s really an important point. It’s not one size fits all, but one thing that’s really common in all of them is making sure the details in your agreement are sound, which is why we always love, Karen and I, we did the financial portrait, so we don’t give legal advice nor do we suggest to give legal advice in any way, but we always say, go get your agreement reviewed before you sign it and maybe bring it back to us to review the financial component, because we even always see agreements come up when the financial piece is not even written correctly, which can really impact them in the future. Do you see that often?

Rosemarie Ferrante:

Often. The assistance of a CDFA, as you are, is so critical in divorces. That can come in a lot of different packages. Sometimes in a collaborative divorce, there’s a neutral financial professional who’s assisting the family as one neutral. Sometimes one spouse just needs assistance in understanding finances, understanding the decisions they’re going to make. Sometimes a CDFA can be working with one spouse outside of the mediation. Sometimes it’s a co-mediation with a mediator and a financial neutral. It looks different. It’s really, I just had a consultation with a family this morning and we were discussing that. It’s a family decision, but it’s also an individual decision. What help do you need so you can be prepared to make the best decisions to set up your post-divorce financial life. A real thorough understanding is important for, not only the mediator/attorney helping them through the process, but for the individuals themselves and your role is just critical.

Karen Chellew:

Yeah. Having that knowledge and understanding of the finances before mediation is just so critical. I believe, because I’m guessing I tell our clients the first thing a mediator or an attorney starting to ask, when you sit in front of them is, what do you want? Where do we start? Where are we going from here, so that you can understand generally where their position and having that financial clarity to start with is just extremely beneficial, talking about details. I would think that’s the first detail everyone should be able to [crosstalk 00:04:29].

Rosemarie Ferrante:

Of course, and some people, it works better for their family to work with the CDFA initially, the financial professionals initially, and then you’re starting mediation sort of at square D or F or P as opposed to A. You’re not just hiring professionals to hire professionals and doing the same thing with each of them. Making the process more efficient if you’re working with a financial professionals in A, preparing what ultimately the court requires with regards to your financial affidavit and B, understanding as a family, what are these decisions and how do they impact our future? What are the best decisions we can be making? Are there refinance issues, identifying what the issues are and together, understanding them. Together in the mediation, we can make the best decisions.

Catherine Shanahan:

Yeah. We love that our portrait does do that for you as the mediator. It outlines all these things to consider. We have that recommendations and consideration with each of your assets, but how do we prevent those recommendations and considerations in your agreement from being written properly? How do you know when you have a really well-written agreement, because most people at the end, they’re like, “Yay, we’re here. We did it. I’m done. I never have to speak to you again.” We’re relying on the professional to just drop my paperwork. When you read it, it might seem, okay, so you just sign off or you don’t read it, you sign off because you’re trusting everyone. Let’s talk about some common mistakes that you see. I know you write really good agreements, but I know you’re a reviewing attorney as well. I know that we wrote a blog together, which we were really excited to write with you. What are some common mistakes that you see?

Rosemarie Ferrante:

Yeah. We had a lot of fun. I had a lot of fun with you ladies writing that article because it did identify the things that we all as professionals see. After going through hopefully, a conscientious and deliberate mediation process, the last thing you want is six months later to try to divide an asset and realize there was a mistake or your agreement doesn’t have the proper language to effectuate whatever your intention might have been. We see this time and time again, and language is critical. What attorneys should recognize is you don’t know what you don’t know. Sometimes that’s a hard pill for attorneys to swallow, but work with the financial professionals. Before I draft off in time, the tax provisions in an agreement, I want to talk to the family CPA, or I want to talk to a neutral financial and make sure that that language is appropriate because how often have we, as divorced professionals, seen an agreements that says, so-and-so will refinance the house within three months, four months [crosstalk 00:07:35], and they never spoke to a mortgage professional. Come to find out they’re not going to be approved.

Rosemarie Ferrante:

They can be in contempt of that agreement by no fault of their own. Why aren’t we talking to the financial professionals before we’re signing our agreements or holding people up to a standard they can’t meet?

Karen Chellew:

That’s so good. If the standard is not met, then what? We run into that a lot. One spouse or the other has agreed to refinance within six months, even if they know they’re going to be approved, but they don’t do it, then what? I know in a lot of attorneys minds as well, they’ll file a petition for contempt. They don’t have another $10,000 to spend to enforce the agreement. I think there are provisions in the agreement that can be spelled out to prevent that really expensive step.

Rosemarie Ferrante:

Yeah. Absolutely. Those frameworks are so important because life happens and things change. Whether it’s an income provision about child support, you know your kids are four and five and your income is X today. Well, who knows what your income’s going to be in five years? Would you like to just in five years say, “Something’s changed. What do we do about it now, when your agreement gives you no direction?” Or would you prefer to have had those discussions and say, “Our agreement says every two years where, every year we’re going to exchange income information and every two years we’re going to revisit, and this is how we’re going to take step A, step B, and step C, so you have a framework because life changes. Certainly, on things like income provisions, you want to provide a framework so that people have a direction when something happens. They’re not just saying, “Great. We have to call the lawyers again.”

Karen Chellew:

Right, and disrupt the whole family unit again, because somebody didn’t do what they were supposed to do and the other one doesn’t want to be on the hook for it. Yeah. That’s a big deal. I think another really big issue is the division of pensions and 401ks and how that plays out and IRAs, post the divorce agreement. Again, to Catherine’s point [inaudible 00:09:59] saying the percentage is one of the easier parts of that category.

Catherine Shanahan:

What was that? I missed you on there. Saying of what?

Karen Chellew:

I said the percentages is probably an easier conversation to have then the implementation of it, post the divorce agreement. I think, Rosemarie, you were talking about that before we hopped on here about a conversation you had recently had.

Rosemarie Ferrante:

Yeah. Yeah. I had a call from a woman who was divorced just a few months ago. The agreement said that these certain assets were 401ks and would be divided via quadros. She went to the time and expense of meeting with an attorney who is a Quadri drafter, and come to find out that not only are those two 401ks, not 401ks, but IRAs. They don’t need quadros and they could do direct rollovers. By the way, there was a third account, a third IRA, that was never mentioned in the divorce. It’s not in [crosstalk 00:11:09] payments. There’s a level of due diligence that mediators and attorneys assisting families need to do. If they’re unable to, then involve financial professionals, so now this poor woman does not know what to do, and there’s no framework like we were just talking about, to get her ex-husband back to say the mediation table or some process other than having to file a motion.

Catherine Shanahan:

No one’s coming back. They’re not coming back. [inaudible 00:11:47] there. We had the same thing happen. We had a client and in our recommendations considerations, we said, “Your IRA does not need to be split by a Quadri. It could just be transferred through your financial planner, with the proper paperwork.” Well, their mediator is telling them, I’m spending all this time and I’m doing you a favor and I’m going to figure out how we could not have this quadroed. Well, he’s billing are for doing something that he should have known. An IRA does not need to use Quadro paperwork. If you’re listening, that’s the qualified domestic relations order. It’s the way that you transfer [inaudible 00:12:24] plans, which is not an IRA.

Catherine Shanahan:

Yeah. That’s very important to know because they are charged $450 and upwards to do a Quadri. It’s an expensive thing as well, but again, you can catch it. Karen catches a lot of, when you write these agreements up with the QDRO in that section, when you do need a Quadro, which a lot of accounts do, Karen gets all crazy because what happens if they die before this paperwork is even done? What are some of the other…

Karen Chellew:

I have a question.

Rosemarie Ferrante:

[crosstalk 00:12:58] of one that I see all the time is, whether people decided an agreed upon dollar amount and they don’t convert that to a percentage and they don’t deal with market fluctuations from the dates of the divorce until the date the Quadro is actually effectuated, until it’s actually entered. If you have a $500,000 401k and you agree at the time that you’re going to divide it 50/50. The agreement says the per the Quadro is going to reflect a $250,000 payment. Then guess what? It takes six months, the market tanks, it’s only worth 350 now, and now you just gave up much more than the 50% that was intended. That language is so critical.

Karen Chellew:

It’s so important. Another piece is making sure your accounts are properly identified. We see so many agreements come through where the parties have a… husband has a 401k plan, and they’ve agreed to divide it 50/50. Okay. That doesn’t get far with a plan administrator because it could be any 401k plan. They don’t even have verification that it’s yours, nor can they verify that the couple knew it was their plan. That’s a big deal, just not putting the entire account number because you want to be careful about your identifiers and public documents, but making sure that the agreement definitely describes the specific account that’s being referenced.

Catherine Shanahan:

Well, let’s imagine that. Imagine that if your agreement reads that, and then afterwards you have to rely on your ex spouse to get you a statement, to identify a 401k. Let’s just say, it’s a scenario like you mentioned, Rosemarie, and there’s other 401ks that they don’t want to mention. To get your spouse back to get that paperwork would be very costly rather than doing it during the process.

Karen Chellew:

Right. Yeah. There’s a lot of plans now, more and more, that I see where the plan administrator has a fee in addition to the Quadro preparer and making sure it’s understood, who’s paying for what, because that’s another hiccup down the road, when they’re arguing about who’s paying and I thought you were paying and we only agreed to pay this or that. Then again, to Rosemarie, your point, if there’s a delay and it’s a stalling point and the person who has the account, they don’t really have any incentive to make sure it gets divided. Yeah.

Rosemarie Ferrante:

[inaudible 00:15:47] the place that we’re talking about, when we were talking about something you had said earlier about the refinance, or whether it’s an IRA or an IRA not requiring a Quadro. To me, that’s sort of divorced 101. All attorneys and mediators should know that, but now, when you’re talking about pensions, pension plans are not for normal people to read. They are so hard to understand. In that aspect, when you’re getting to things that are much more complex or have different survivor benefit, what’s the [crosstalk 00:16:27].

Catherine Shanahan:

Options?

Rosemarie Ferrante:

Yeah, options. You really need to have somebody explaining that to people going through the process in layman’s terms, so they can really understand what does that mean? What happens if somebody dies and those are not identified in your agreement and/or your Quadro.

Karen Chellew:

Yeah. Yeah.

Catherine Shanahan:

What happens if the pension is in payout mode and that option was already declared. What happens if that spouse dies within six months of you starting to receive it or a year? What happens to your income then? Is there any provision from his estate to get you some payments or her estate, whichever way it goes. There’s a lot. You have to have a lot of forward thinking with these options and the writing of how they write up your agreement.

Karen Chellew:

Absolutely. Is it a shared interest? Is it a separate interest? Those are very important components, to Rosemarie’s point, that need to be addressed and discussed with both parties. I know a lot of parties, they want to do so many things by themselves. They’ll take a model, a Quadro and say, “Oh, we only have to fill in the blanks.” That’s the worst thing you could possibly do because there’s so different components to a Quadro that you really have to understand. It could really leave you in a very difficult situation. Those model quadros are for reference points only. They’re not intended to be an entire agreement for any party.

Rosemarie Ferrante:

I’m so glad you thought of that because we did make note of that in our [inaudible 00:18:12]. If we had 30 more pages, we could have just written about that. I’m glad you raised that because many people just think and many attorneys think the fallback is the model. We’ll just use the model. [crosstalk 00:18:29].

Catherine Shanahan:

When I see someone with a really nice outfit on it and I get it in my size and it doesn’t look as nice.

Rosemarie Ferrante:

Exactly.

Catherine Shanahan:

Oh, it’s awful.

Karen Chellew:

There’s something else that we discussed in the article, was the retirement loans, investment gains and losses.

Catherine Shanahan:

Yeah. A lot of times people don’t consider that there’s a loan on the 401k. They’ll look at a current value, which is not stating what the loan is and just say, okay, or they’ll say, okay, they’re splitting the 401k 50/50, or however they’re splitting it. Then it comes down to the division and the loan has to be taken care of. Well, it was never addressed. Well, who’s taking care of that loan. How do you distribute the other assets in accordance with that loan? It’s messy if you don’t address that from the beginning.

Rosemarie Ferrante:

Yeah. Absolutely. We haven’t even really touched on our favorite, RSU is my favorite. Is that your favorite?

Catherine Shanahan:

Yes.

Karen Chellew:

Not mine. I don’t know anything about it.

Catherine Shanahan:

Most times the spouse who owns them, says they’re not eligible. “You’re not getting them,” or, “This is all I have,” or, “You know what I have,” or, “We spent what you have.” Nobody thinks to get the ledger or to learn the difference between the grant price and the exercise price. If you sold it, if there’s still shares, people leave shares remaining to be sold that are marital without even knowing it. Then we see agreements, Karen, remember the last agreement we saw. We have people come to us, ask us to review the agreements on the financial piece. This is a huge section. It just said, what did it say? Husband and wife have RSUs. Husband has RSUs to be divided at retirement or something. We’re like what? [crosstalk 00:20:29]. Who’s ever going to come… Yeah.

Karen Chellew:

[crosstalk 00:20:34] worry about.

Catherine Shanahan:

No taxes. Who’s determining when they’re being sold. How are you balancing out the taxes? Where’s an exhibit? Who’s keeping track it for you. How do you know when it’s being sold? How do you know he or she’s going to tell you when they sell them. It has to be really formerly written out. We like exhibits. We like everything in an exhibit in the financial world.

Rosemarie Ferrante:

[crosstalk 00:21:03]. when you’re talking about granting schedules, vesting schedules and things like that, it doesn’t even fit into your typical financial affidavit form. You know what I mean? It’s very challenging to just in a logistical sense, make sure that that’s all properly stated. Everything has to be disclosed and has to be disclosed properly. The last thing anybody wants is situation like this, that I was talking about before, an IRA is not disclosed and now post divorce, you’re talking about opening a judgment. You need to understand the importance of those documents and own it yourself as a participant in the divorce process and your divorce and your family. You’ve got to use the professionals you need, but you also have to do your own work. You can’t just put it in other professionals hands and raise your hands to it, as easy as that may be, because you’re emotionally exhausted, nervous, all of those things. You have to really be your own best advocate and you’re providing yourself with whatever support you need.

Catherine Shanahan:

Well, good news for all of you listening, that’s why we have the MDS financial portrait. Imagine, Rosemarie, you have your new client and you get delivered this portrait and has the exhibit of all the RSUs and the whole vesting schedule, because it allows you to do your job as well with them much easier, because they are, like you said, they have their self-information that they’ve obtained and they’re able to maybe not comprehend it all, but understand what’s outlaid there. Then they’ll be more in tune to listening to how you can guide them to divide these assets, because it’s already outlaid. They’re not questioning and wondering and just scurrying away because you don’t understand what the word means. It’s so important to have that knowledge and that clarity so that you can make good decisions, because I’m guessing the person who is not informed in this scenario probably has children. They’re more concerned about how you’re going to help them split a 50/50 custody, they don’t want to do so.

Catherine Shanahan:

It’s nice to have this information right there in front of you so that you can have them. Then you can write up a better agreement with that information.

Rosemarie Ferrante:

Absolutely.

Catherine Shanahan:

Which is really important for them.

Rosemarie Ferrante:

It’s so critical. There’s never really an instance where that sort of financial homework getting done before the process, is really the first step. It really is. Identifying those financial issues so that you are primed and ready to have the discussions you need to have to make good decisions.

Catherine Shanahan:

Another big one I always see with taxes, making sure that your past taxes were paid and that you have some kind of writing that if there are any past tax issues, especially if you have a couple that owns a business together or separately, that any tax liabilities that would come up post divorce from the past, what if it’s not covered in the agreement?

Rosemarie Ferrante:

Yeah. That’s a very, very normal provision to talk about the past, but what a lot of people don’t even recognize in their own instance is, how much information is in that tax return. A lot of people will just simply think about who’s going to get the exemptions for the children, which is relatively, almost meaningless at this point. We have tax credits, perhaps head of household. They can talk about that forever. What about that big carry loss forward? Has nobody thought about talking about that? These are big issues. You leave some asset like that on the table, that can really hurt somebody. On the other hand, it might be given the structure of their financial agreement that it makes perfect sense for one party, could presumably the one with the higher income or the business or whatever it is, to keep that, but offset it with another assets.

Catherine Shanahan:

Right, right. Don’t forget offsetting.

Karen Chellew:

I think that’s a very important component, because I think a lot of couples will be advised that during the year they get divorced, to go ahead and file jointly, even if they’re separated. The wage earner gets a huge benefit, sometimes upwards of 50, 60, $70,000. I think that’s what you’re talking about. That offset that there’s some kind of a reconciliation to go there, because if you’re filing jointly post separation like that, you are taking on some risks of liability. There is a component of reconciliation that you can have on the table. I think a lot of professionals may overlook that. It’s good that you don’t. You’re very detailed, personally.

Rosemarie Ferrante:

You have to be, and you need to be, and if you’re not, then you’ve got to make sure that again, as a person going through the divorce, that your professionals working are all working together. Potentially you have a mediator who might not be. Hopefully you’ve got people like you two, who are reviewing the financial provision and making sure that those pieces are outlined clearly. Yeah.

Catherine Shanahan:

We hold them to doing the homework beforehand. We love doing that.

Karen Chellew:

Absolutely, and to asking really good questions. Sometimes to your point, Rosemarie, clients want to say, “All right. I’m just going to give it to you and you’re going to take care of it for me.” No, that’s the time to get engaged. Our portrait does have all of these, what we call considerations, laid out in the document. A lot of couples, if they don’t have this, let’s just say, if they don’t have an MDS financial portrait. They’re coming in and they’re going to be dividing all of their assets, but they don’t know to ask about market fluctuations or loans on the accounts and so forth and all the unique questions they should be asking. Let’s just say they did.

Karen Chellew:

You would be able to address that in the mediation process, because a lot of those topics, or a lot of those questions or concerns don’t come up until they get to the reviewing attorney and then the entire agreement falls apart because it wasn’t discussed. That can be a really big deal. Just the concept of the pension, going back to that, is it separate interest or shared interest? That’s a huge issue and a lot of pensions and it can make everything… It could just blow up your entire agreement.

Rosemarie Ferrante:

Yeah. There’s not enough that can be said about that. The dynamic of mediation process is so important. You don’t want surprises at the end. That’s the last thing you want. Certainly, rather have it at the end then six months post divorce, however, to have a good mediation process and to have it efficient and to have everybody feel like it was fair and they were heard and they understood, and they made good decisions, but it’s not easy. Believe me, I don’t know any clients who want to have a long discussion about shared versus separate interests. I don’t really want to have that conversation. [crosstalk 00:28:41] uncomfortable, tedious conversations, you have to get through the process and feel good about it. Again, making sure that you made the good decisions that you need to make.

Karen Chellew:

You learn so much then moving forward. You feel like you’re more in control of where you’re going and how you’re positioning yourself and what it will mean to you, if you’re having those conversations with Rosemarie during mediation, instead of being blindsided with a review attorney back on your heels, because then the emotion is more, who’s going to get upset? How upset are they going to get? Is this card important enough to play? Or is this issue important enough to bring up, to blow up our entire agreement?

Rosemarie Ferrante:

That’s a mess [inaudible 00:29:33] so then eventually you have a judge writing this decision that you had no part of. How disempowering is that? Now you’ve got to live by it. Now you’ve got to live by something you weren’t even a part of discovering, understanding and involved in the decision-making process. A good mediation or collaborative divorce with the right professionals and the right financial professionals can greatly change the whole experience of divorce. It doesn’t have to be scary and nerve wracking. Well, it probably always will be, but much less though. It does set up your post-divorce life for a positive post-divorce life because you owned it, you were a part of it and it’s empowering. Now, you can start that post-divorce life knowing you made the decisions and they were good decisions.

Catherine Shanahan:

The more details you have the better off you are. Even for little things like you have a joint checking account together. Yes. A husband’s keeping that account or wife is keeping that account, but who’s re-registering that account so it’s only in that individual’s name? or you have a joint credit card. Yes. You’re taking one person off, but are you taking yourself off as a authorized user as well so you’re not responsible or that you can’t charge on that account? There’s so many little things to think about that really, if you have this detailed in your agreement, you don’t have to think about it. You just follow the instructions.

Rosemarie Ferrante:

I agree.

Karen Chellew:

I think we have many more blogs to write and podcasts to have. There are so many very detailed topics that need to be discussed and addressed. We look forward to doing more of that with you, Rosemarie.

Rosemarie Ferrante:

Definitely.

Karen Chellew:

Yeah. This concludes this episode of We Chat Divorce. Details, details, and look for more episodes. You can find us on Podbean or wherever you listen to your podcast. Thank you for being with us.

Rosemarie Ferrante:

Bye, ladies.

Catherine Shanahan:

Thank you.