EP 129: Divorce Advice for Stay at Home Parents

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You’re listening to The Divorce and Your Money Show, the number one podcast that discusses the complex business of divorce. I’m your host, Shawn Leamon MBA and certified divorce financial analyst. You can visit us at divorceandyourmoney.com.

In this episode, I want to discuss some important information for stay-at-home moms, and this also applies to stay-at-home dads, but I’m going to talk in the context of stay-at-home moms only because it’s more common, and that’s where I’ve been getting a lot of questions from recently. And here’s a little life story is you get married, things are going well, you have kids. Oftentimes you’re working before you had the children, and so you stop to take care of the kids. The husband works. 5, 10, 20 years later, unfortunately, things aren’t working out and it’s time for the divorce. Could be from an affair, could be from abuse, it could be from any number of cases.

But oftentimes, what I see is because the husband was the earner and also, typically, controlled the money in this case when you’re getting divorced all of a sudden you realize something that you might not have thought about before. You’ll find out that most, if not all, of the assets are in your husband’s name. We mean the home, cash, bank accounts, investment accounts, and oftentimes he’ll give you access to nothing, or a very tight budget, so little money that you can barely afford to get by day-to-day. And, of course, even though you need more more money he’s very controlling, and you find out that when you’re getting divorced you’re at a pretty big disadvantage. A huge disadvantage because you probably don’t have access to enough money to get the help that you need. You’re probably wondering what assets really exist, if he’s got some secret stashes somewhere, and I imagine you feel lost on top of everything else. And you know you need help, but you don’t necessarily know where to start.

So, in this episode, I want to give you some tips because it’s not all bad news, and that’s something I want to talk about at the end of this episode. But, some tips for you as a stay-at-home mom, or a stay-at-home parent to help you navigate this process the best you can. And I’m going to talk about four specific points. The first is to get organized, the second is get access to funds, the third is build your team, and the fourth is think offensively.

The first thing you have to do is get organized, and that’s just one of the most important steps regardless of who you are when you’re going through the divorce process. Now, as a stay-at-home mom you might not have access to a lot of the information that you need. Now, if you listen to some of the other episodes that I have, I have some pretty clever ways to get access to some information that might be useful to you, so you need to look back in some of the other episodes to try and sneakily get access, legally of course, but to that information that you might not have known existed. But, if you’re not able to pursue some of those methods it’s okay that you don’t have access to everything because you might have access and know a lot more than you think you do.

The first thing you should check out for when you’re getting organized is get your tax returns. Now, most likely most people file joint tax returns when they’re married, and even if you don’t know what’s in those tax returns well, guess what? You can get a copy of them from the IRS. So, if you go to the IRS website you request a transcript, if you get a transcript from the IRS you can get access to, I think, somewhere from 5 to 10 years of your tax returns.

And why that’s important is almost every account that you have, or every asset, or at least a large chunk of them will show up on that tax return. Sometimes in very small single line items in a big tax return, but that tax return has a lot of information on it that you might not have known to look for, so get your tax return. You can go to the IRS office if you live near one, they’re all over the place. Or, you can go online and type in ‘get your tax transcript’ and you can find it, and that will show you interest from bank accounts, investment accounts, how much you made from them, real estate. A lot of different things show up on that report.

Now, outside of the tax transcript I actually have a divorce checklist. So, if you go to divorceandyourmoney.com, or you email me directly at shawn@divorceandyourmoney.com I can give you the divorce checklist. And it gives you a comprehensive guide of lots of documents that you should just be looking for, get access to. A lot of things you’ll probably have, or have inclinations about. Even if you don’t know the specifics, or have access to something specific just write it down and say, “Hey, there’s a bank account here I don’t know about.” Or, “I bought this car, but I can’t find the whatever.” Or, “I know we got the mortgage in this year, or bought the house. I’m not sure if my name’s on it,” or whatever else. It’s okay if you have a question, but if you get that checklist it’ll walk you through a lot of the key items that you need.

So that’s step number one. Get organized as soon as you can. If you haven’t filed yet, great. If you’re already in the process just spend an afternoon, or spend a weekend, and just gather up as much of the information. Put it in binders, folders, highlight, copy it, all of that stuff because your attorney’s going to ask for it, I’m going to ask for it. Any sort of financial expert and accountant, whatever is going to need that information and supporting documentation. And if you don’t have to tell your attorney because there are other ways to subpoena that information.

Number two, get access to funds. If you have not already you need to make sure you set up a bank account, a separate account in your name. Now, you need to have an account that you have only access to. Preferably even at a different bank. I know of a lot of bank tellers who are a little too cozy with your spouse, and they might divulge information that they should not divulge otherwise. So, if you can go to a different bank that you don’t normally bank in and open up a separate account that is a good way to pay for divorce expenses.

If you can take money from a joint account and put it there, and if not another option too, which I know a lot of you are facing, is get a credit card that is a joint … or, excuse me, that is a credit card in your name only to at least give you a few thousand dollars of expenses, so you can get the divorce process started. If you have a good attorney you can also find a way to get your husband to pay for some of the divorce expenses. That is, I will say, very common. I don’t want to provide any false hope for you, but I know in many of the cases particularly in a stay-at-home mom situation where your attorney can request that the working spouse pays for the legal fees. And even if you have a part-time job and your spouse makes the majority of the money you can still request that he pays those legal fees.

In terms of amount of money that you should have saved up, if I were in an ideal world I would say you have about $10,000 set aside in your own account should you need to proceed for the divorce process because an attorney’s retainer by itself can go anywhere from 3 to $10,000 you’ll need. If you’re in a situation where you’ll need additional financial help that’ll be several thousand dollars. If you need an accountant, if you need a therapist all of those expenses add up very quickly, and that doesn’t include all of the day-to-day life expenses. I know this is a lot of money to have set aside. And for some of you I know that it’s not realistic just to toss $10,000 in a bank account. For some of you I know that’s not a burden at all, but if you’re not in a position to take care of that $10,000 at least try and get as close as you can to have that cushion. That’s my recommendation that I see from dealing with this all the time.

Now, number three is build your team. I’m going to keep this short, but you should definitely get an attorney. You have to get an attorney, and you need an attorney that’s going to advocate for you. And also getting financial help, I always recommend hiring a certified divorce financial analyst like myself, particularly for something like this where there’s a lot that you might not know the details of, but I can help you ask the right questions. Or, help you figure out the right information and find a way to get that information that you need because oftentimes you know a lot more than you give yourself credit for you just don’t realize it. And sometimes I’ll be speaking with you on the phone, and we’ll be talking and you say, “Yeah, I remember this account and that account and I think I saw a statement from this 1.2 years ago.” And all of a sudden we realize that you have 90% of the information, or 95% of the information you just didn’t realize that it was in your head or you had it around the house. And so that’s why getting additional financial help can be helpful.

And then the fourth one, this fourth point is think offensively. And this is a very important point for me that I want to get into for a moment is when you’re in a situation like this, you have a spouse that’s controlling, you can often feel like you’re on the defensive and you are. And you’ve probably been down emotionally, and hopefully not physically, but in some cases that’s the case. And most of the time you just want to get out in decent shape. And most of the stay-at-home parents I deal with you’re not greedy, you’re not asking for too much. You just want what’s yours and want compensation for all the sacrifices you’ve made, and you want to be secure for your future. And all of a sudden, you found yourself in this bad situation, and going through this divorce process, and all of the emotions and stuff that come with it. But one thing I want you to keep in mind is you can’t just take the punches. I’m not going to say that you have to fight back, but you do. You have to advocate for yourself, and fight for what’s right, and not take any threats from a spouse, and leverage what you have to your advantage.

If you’ve been married for 5 years, or 10 years, or 20 years, or 30 years, or whatever the case may be, and now you find yourself in this process you’re entitled to a lot. And actually you need to realize is regardless of what your spouse says is that all 50 states divorce laws are written mainly to protect you from this situation. The divorce laws are written in a way to protect the spouse who made the family sacrifices who might not be bringing in a lot of income, but raised a family, and they don’t want you to be out in the dust left alone for the rest of your life in the poorhouse. Your lifestyle might not be the same, but the laws are there to protect you from just being left destitute just because you hadn’t worked for the last 10, or 20 years, or whatever the case may be.

So, if you have a threatening husband don’t capitulate to the threats. Get yourself a good team to support you, and leverage this to your advantage. You are actually, oftentimes, in a much better position than you think you are because you’ve been in this … even though you don’t have the information necessarily at the tip of your fingertips the laws are there to protect you for this very case. And actually, if you ask a lot of men they will tell you the exact opposite thing, is they will say, “Ah man, my wife is taking everything from me.” Well, that’s not quite the case. The case is the laws are written as such, because many of these laws are pretty antiquated, but in a time where the husband was the only one who provided an income in a family well, the laws were written in a way that yeah, the husband’s got to pay up. And so things are changing changing slowly, and there’s a little bit more equity, but you are in a much better position than you think you are, and you need to fight for everything that you are entitled to. And you have to prepare yourself emotionally, you have to be aggressive, you can’t be a little mouse during this process and continually take the punches.

It’s the hardest thing that I have to try and convey to people is when I speak with you, you sound just deflated like you have no energy, you’re exhausted. This is, unfortunately, not the time to be exhausted. You got to get that out of the way either before you file or get a therapist to help you work through this, but when it comes to getting to that settlement and planning for the rest of your life I’m going to be pushing you, is I want you to make sure that you get everything you’re entitled to and then some. Or at least advocate for it because if you don’t advocate for it you’re not going to get close to it.

I don’t want you to undersell yourself in this process because this is a business deal. This is not an emotional deal. Once you sign that paperwork you got the rest of your life to prepare for, and this is not a time to just take it by the side, and to get beat up a little bit more. This is a time to take charge of the rest of your life. And so, there’s things like temporary spousal support, child support that you can fight for. Making sure you get all of the assets that are entitled to and structuring them in a way that’s advantageous to you from a tax perspective, from a legal perspective, and making sure you do your own research. I hear almost every day is, “Well, my spouse said he’s going to do this if I,” blah, blah, blah. I say, “Yeah okay, good luck with that to him. Here’s the deal for you is this is what the law says. You should tell your attorney these three things and this is what should be communicated because if you don’t do that you’re going to fall victim to those threats, and I don’t want that to happen to you.”

So, four key tips for a stay-at-home mom. First is get organized. Second is get access to the money you need, I said around $10,000. And hey, one thing, I have a lot of good episodes on how to pay for divorce so be sure to check because I have lots of creative ways how to get to that dollar amount. Or at least get close to it, so that you can get the funds that you need. The third step is to make sure you build a team, and a team that’s going to advocate for you. And fourth is to think offensively. If you do those steps, if you take care of those steps even though this process is rough, I can’t imagine what you’re going through right now, but you will look back on this confidently, and satisfied with what you got out of it if you advocate for yourself and don’t just take the first deal that comes by, but really fight for what you deserve in this process.