Transcript

Intro: Welcome to the life unlimited podcast with Larry Heller. You deserve complete financial advice, so you can confidently live your life, your way for life. Now let’s get into this week’s podcast episode.

Aric: Hello, and welcome to life unlimited with Larry Heller from Heller wealth management. I’m Larry’s producer, Aric, and I’m here to learn along with you, the listening audience. And Larry has given me the honor of introducing the guests today and reading her bio, which is awesome. So here we go. Lisa Ziderman is a highly respected managing partner at Miller Ziderman LLP in New York. As a matrimonial attorney, CFL and certified divorce financial analyst, she specializes in complex financial and custody divorce cases for high net worth individuals with multiple prestigious awards and memberships, including being named a notable woman attorney. And a notable diverse lawyer by Cranes, New York. Lisa is a trusted expert in her field. She has been featured in renowned publications like [00:01:00] Psychology Today and Financial Advisor Magazine. Larry, you brought another guest, great guest. Thank you so much. What’s going on today? What are you guys talking about?

Larry: We’re going to talk about divorce today, Aric. So the bio kind of pointed to that. So yes, it is. And we’re going to talk a little bit about if you’re contemplating divorce and some of the things you should think about and talk about, especially if you’re getting divorced later in life, which is one of the things we specialize in.

So, Lisa, thank you so much for joining us today, and why don’t we kind of get right to it. So if you are contemplating divorce, especially divorce later in life, and there’s a plethora of matrimonial attorneys there and, you’re going through something emotional. So what should you be asking a question of a potential divorce attorney?

Lisa: So why don’t we start with maybe three questions that somebody should ask?

Larry: Sure.

Lisa: So, first of all, thank you so much for having me. It’s a delight to be speaking to you today. I would say that you need to be, first of all, [00:02:00] if you’re speaking to a divorce attorney, you need to be asking about what their experience is in the area that you are focused on.

So, for example, if you’re going through divorce later in life, you want to make sure that your attorney is well acquainted with the imputation of income issues with that. Dealing with a vocational expert. It may be that you haven’t worked out there for a long time or that you have worked out there and that your spouse hasn’t.

And so you’re going to need to know about imputation of income. Obviously, you also want someone who is very familiar and you should be asking that. About dealing with assets, liabilities, equitable distribution and what the maintenance laws are now in New York state, what that looks like. So I would say those are the questions that you want to be asking about.

Larry: Yes. And I guess there’s some other specifics that even come into play, later in life, especially if they have a higher. A higher amount in their [00:03:00] retirement accounts, or they’re a business owner and either the spouse of a business owner or the business owner that it may be more significant assets. So what are your thoughts on both of those?

Lisa: So in terms of if you’re a business owner or you’re married to a business owner, you need to make sure that you have an attorney who is understanding of the valuation of those businesses. That’s going to be first and foremost, what you’re going to have to deal with is valuing a business.

And you’re going to need to know if there’s partners involved and how to deal with the forensic accountant and which accountant you might be looking at, and whether you should have a neutral accountant or whether you might want to have your own expert.

Is the business very complex or is it a very straightforward business where you don’t have For example, expenses being paid from the business that really may be more personal expenses that have to be adjusted.

So there, there’s lots of information about businesses and you want to [00:04:00] be able to ask those questions. You want to also make sure that you tell your attorney and ask your attorney how you deal with things like. Maybe there’s a cash business and things aren’t being properly reported on income tax returns.

How will your attorney deal with that particular issue? So for sure, those, those are issues that you want to talk about. As to the retirement accounts, most retirement accounts are going to be divided via quadro. which is a qualified domestic relations order. And you can talk to your attorney and ask questions about, for example, if there’s a Roth IRA that needs to be divided versus other IRAs. What are the tax implications? How is that dealt with? Because Roths are definitely dealt with differently than a regular IRA. So those might be all You know, issues there. The other issue is that sometimes people have separate property claims. They’ve either inherited money. And we see this particularly with dealing with people who are going to divorce through [00:05:00] divorce and older, you know, in an old and older, older ages because they may have inherited from either parents or grandparents during the marriage.

And you want to find out was that inheritance. Was it kept separate and apart? Was it commingled? How is that inheritance going to be treated? Perhaps somebody was married before and had assets and premarital property and came into the marriage. This may be a second or third marriage. So there’s so many different types of questions that certainly can be asked and that are important to the client.

Larry: Yeah. One of the things you mentioned was, you know, maintenance and now that kind of a little bit more of guidelines here in New York. But if you are getting divorced later in life, how does that impact you if someone’s looking to retire? Not now, but, you know, in a shorter time frame.

Lisa: You know, it’s a balancing act to some degree because although long marriages[00:06:00] allow under the statute to go up to 50 percent of the length of the marriage you still may be in a situation perhaps where your spouse is in their 70s or perhaps even older and even if they’re in their 60s, at some point, maybe the plan was to retire.

So are there sufficient assets, and this is important, are there sufficient assets that are going to give off income? And when you divide up those assets, is there sufficient income that’s going to come off of those assets each year to pay for all of the expenses and the lifestyle that you both have led?

And sometimes there is, because if somebody is planning to retire. Then that might mean that there are sufficient assets and that there would be sufficient income to do that. And perhaps maintenance will be cut short in that particular situation. But, you know, it is fact dependent on the case and on what type of career somebody is actually working in. Look, lawyers work sometimes through their eighties. So it just depends. Right.

Larry: So [00:07:00] it’s 50, it’s usually 50% in New York of the length of the marriage.

Lisa: If it’s a long marriage, a very long marriage, it could also be 15%. It could also be zero or, you know, two to 5%. So it’s going to depend, the duration of the maintenance depends on the length of the marriage.

The longer the marriage, the longer the maintenance that likely will be paid. But again, that’s going to depend on all the facts. Because perhaps there’s someone who hasn’t worked in a while, but could just, you know, get their career started again and very easily. And that’s going to go back to what I had discussed originally with you, which is this idea that perhaps a vocational analyst will be important to be able to evaluate what somebody’s earning potential actually is.

Larry: Great. We’ve talked about a few different things. Are there any other, few other issues you should consider when contemplating divorce and how it’s going to affect your finances?

Lisa: So, so other issues that you’re going to have to obviously [00:08:00] contemplate is, are there, is there deferred compensation that somebody is owed?

And is that deferred compensation going to be something that is going to be completely marital and divided on a 50/50 basis, or is it going to be treated under a different type of formula, whereby you’re going to be talking about perhaps some sort of a formula called a day who sues formula, whereby On the day who says formula, it is based upon work to be performed.

And there’s a calculation and that calculation has to be done. So is it essentially is it work? That’s already been performed and this is more like, you know, you’ve done the work and now you’re going to get the payout at some point in the future or. You have to stay and it’s like golden handcuffs. You have to stay and you have to continue performing.

And then that may be a different calculation. So that’s something as well to consider.

Larry: Yeah. On, on before you mention some others. So on that, I, I guess if [00:09:00] somebody is a corporate executive and later in life and it’s got stock options and restricted RSUs, that working with an attorney that’s familiar with that would be kind of important.

Lisa: Yes, you need to have an attorney who is familiar with that. If that is what you have, you also, one of the questions that people ask during the first consultation sometimes is whether they should file for divorce or not. That’s a very good question. It’s about sometimes timing. Is it the right time to file?

And it may not be the right time to file or maybe you should have filed, you know, years ago and you better hurry up and file and that may be dependent upon whether there’s a bonus or is there a big deal that’s going to close or is there going to be some sort of a job change or is there a health issue that’s involved?

There are various reasons why perhaps filing is or is not the right time. And that is something to definitely discuss with your attorney.

Larry: But I guess it depends upon [00:10:00] which side you’re, which side you’re on and the time, you know, the timing of the timing of that.

Lisa: Yes. And of course there are other concerns, right? Sometimes people just want to get on with their lives because life is short and they may just want to start the process so that they can move on and do other things in their lives.

Larry: Any other issues that, um, that you should think about when, thinking about divorce? You’ve mentioned a few very important ones.

Lisa: Well, obviously you’re going to also think about custody of your children. And that is an important issue. And you also may be thinking about addiction issues. You could be thinking about different styles of parenting that you each have and whether you can co-parent together, how that’s going to work, whether you can make decisions together.

Custody is one of the most important pieces of any divorce because it’s about your children. And so it’s really important that you think that out and you need to ask your attorney what some of the choices are. for access schedules for [00:11:00] making major decisions such as health decisions for your children, educational decisions for the children and other decisions. So all of that is very important.

Larry: So when, when trying to find the right attorney to, to use as a really more of a comfort level, obviously an experience level how do you know that this attorney, maybe yourself or somebody else is going to be a good fit for them?

Lisa: So I think it one way is to get a referral from someone who’s actually utilized the attorney.

We have clients who come to us most of the time through referral sources. Another is certainly to look at some of the sites AVO and some of the other sites have referrals, recommendations, et cetera. And that would be important as well. And then you have to use your gut. Do you click with this person? Is this person going to protect your back? What is the story in terms of that?

Larry: Absolutely. So the, one of the, some of the other things, especially when you’re getting divorced later in life is sometimes, you know, [00:12:00] estate tax issues. So, divorce can affect that in a, in a big way. So what are some of the tips to ensure that you’re thinking through all these issues before getting a divorce?

Lisa: Well, so in terms of the state tax, remember equitable distribution has no tax, right? I mean, you’re going to have other taxes. You may have capital gains taxes. You may have transfer taxes there. There may be other taxes that are related to either property, stock, et cetera, but equitable distribution does not have a tax. However, when you’re passing it to your children, you will then have. Some sort of a tax. And the question is how you want to deal with that with your spouse and whether or not you are going to, I would say negotiate, that certain assets are going to go to your children after the, after someone is deceased.

That’s another question. And whether there’s some remarriage that’s contemplated, how is that going to be treated in the future in terms of assets? So estate taxes are going to [00:13:00] really relate to the children at that point and how to, how to essentially protect them as much as you can. You know, one way that people do that sometimes is to put monies or find or some of the assets in trust. But that is a question for a trust and estate attorney and people should be guided by their trust and estates attorneys.

Larry: Yeah, absolutely. But it, you know, you bring it up and I’m sure a lot of attorneys don’t even think that, but that way, but just even addressing it to see if there’s something that could be done now that can save significant amounts of money down the road to their heirs.

Lisa: Absolutely. The other thing is to make sure that there’s life insurance to cover somebody’s financial responsibilities. So that would also be a very important piece of this as well as how income tax refunds from prior joint tax returns are going to be covered and any future joint tax returns that you might still execute while you’re still married.

Because until there’s a judgment of divorce in a particular year you can still actually file jointly.

Larry: Right. And [00:14:00] one of the things that we see coming up is a big asset is the home and what happens if one wants to stay in the home and one wants to stay in the homes, long periods of time, and how could that tax issue.Be in play there. So I’m guessing you get into all those conversations as well.

Lisa: We do. We get into those conversations because we have a lot of people who do want to stay in the home. You know, the home is an emotional issue as well as a financial issue. And sometimes it is. Because there is a primary caregiver and they want to keep the home so that the children could stay in the home.

Sometimes it’s frankly, it’s not advisable to stay in the home because you’re tying up a lot of equity that can be utilized actually to produce income. Remember, we talked about income earlier. You know, if you’re staying in a home that has a lot of equity. That equity, particularly these days you know, you can put it into T bills and it will actually produce income, which could be used for other things.

Larry: And good income these days.

Lisa: And good income. [00:15:00] Exactly. Now it’s really a real issue because sometimes people have and I was just speaking to a client the other day, who has a lot of equity in a home. And I said, this could really, give off a lot of income. And the question is your home going to actually go up in value?

And then when you sell your home in a few years, if you decide that you can’t afford it. Then you’re going to end up with a huge capital gains tax without the full deduction that you would have taken as a married couple, which is that 500, 000 deduction. All of a sudden, it’s cut to 250, 000.

And this, particularly for people who are older, who are in that gray divorce area, their homes may have appreciated quite a bit, and they may be hit very hard with some of these capital gains taxes.

Larry: Absolutely. So it’s a fine line. And the same thing, us, when we’re talking about financial planning and investments is the emotional impact. And people get so emotionally tied up with a specific investment, especially a house that can be, and how do you navigate, how do you navigate that, but showing them the right [00:16:00] way financially versus the emotional impact is. I’m sure you spend a lot of time having those conversations.

Lisa: Without a doubt. It is, it is a very, the, Marital home is a very difficult issue for people particularly when they have Children who are, you know, 15, 16 who, you know, are still in the home. They’re not yet in college. They want to stay in the home, perhaps while the child is certainly in high school, but perhaps even after that, so that they have a home base for the child. And it’s not always realistic.

Larry: A lot of great information here. Any final words that you want to share when somebody is kind of looking for a matrimonial attorney?

Lisa: I think the most important thing is you need to do your research. You need to make sure that you are doing your research, interviewing the attorney, making sure that you and the attorney click, that you feel like you’re going to be able to go the distance. Because what you don’t want is to hire an attorney and then switch over to another attorney and [00:17:00] then another attorney that becomes a big problem and you, I would say when you become a serial switcher, that becomes even more of a problem because I think that from the court’s perspective, they start to wonder why is that happening.

And so, you know, look, people do switch once or twice. But after that, you really need to look at why you are switching attorneys. Is it because each of these attorneys might be telling you something that you don’t want To hear perhaps. What you don’t want to hear is really the truth. And it may be actually the reality of the situation.

Maybe the reality isn’t what you want, but it is the actual reality. And I think one further thing is that I think people are. Generally need to be trustful of the process. They need to go through the process. Rushing the process is not always the best thing to do. And so sometimes people come to us and they really want to rush through that process and they haven’t given themselves enough time to make sure that their attorneys have evaluated the assets and the [00:18:00] liabilities and valued the businesses and they are uh, they’re unwilling to do that and they may be leaving quite a bit of money on the table.

Larry: Lisa, so much great advice here for somebody that’s contemplating a divorce. Thank you so much for, uh, for joining us today. If somebody wants to reach out and get in contact with you, where should they, uh, how should they do that?

Lisa: So they could go to my blog, which is lisa zeiderman. com or they can actually reach me by email at LZ at MZW.Dash law. com.

Larry: Great. Thanks so much for joining us today, Lisa. Thank you so much. This has been fantastic.

Aric: Great podcast. You both of you gave great information. Larry, folks are going through this and they want to talk to you. How do they get ahold of you?

Larry: Sure. They can reach out to our website at hellerwealthmanagement.com and they can click right there and schedule a free 20 minute call myself and one of the other financial planners on staff, or they can reach out to, uh, to us by phone at 631 248 3600. Great. [00:19:00] All right.

Aric: Thank you both again. And of course, our last thank you goes to you listening audience. Thank you so much for tuning in and listening to the life unlimited podcast with Larry Heller.

If you have not subscribed to the podcast yet, please click the subscribe now button below. This way, when Larry comes out with a new program, it’ll come out directly on your listening device. We also humbly ask that you’d share this podcast, rate it and leave a review as this actually does help others find the show again.

Thank you so much for listening today for everyone at Heller Wealth Management. This is Aric Johnson reminding you to live your best day every day, and we’ll see you next time.