Seizing Financial Independence in the Aftermath of Divorce

When the dust of a divorce settles, the path to financial stability can seem shrouded in fog. Brianna Besky, a seasoned divorce financial advisor, joins us to illuminate that path with her blend of expert advice and personal insight, drawn from her own family's experiences. Together, we tackle the stigmas and uncover the strategic planning necessary to turn what appears to be an end into a new beginning. Our discussion ventures into the world of Second Saturday workshops and the instrumental knowledge they offer for those facing the seismic shifts of divorce.

Navigating the emotional aftermath of a relationship's close, the conversation shifts to the financial rebirth that awaits. I open up about my own brush with these hardships, underscoring the power of community and mindset in reinventing one's fiscal future. We delve into the importance of financial planning, exploring tools like 529 plans, and confront the challenges that arise when one partner's financial acumen is less developed. It's a candid look at how to seize control of your finances and construct a solid foundation for the wealth that lies ahead.

Throughout the episode, the spotlight shines on the value of specialized professionals in divorce proceedings. The expertise of a Certified Divorce Financial Analyst (CDFA) is juxtaposed with that of a traditional Financial Advisor (FA), highlighting the nuanced skills required to navigate asset division and complex financial instruments such as QDROs. Brianna Besky, with her nationwide reach, stands as a beacon for those in need of guidance, regardless of location, and her contact details are:

https://www.raymondjames.com/briannabeski/

brianna.beski@raymondjames.com

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Transcript

Speaker 1: 0:00

Hey there, everybody Never felt like you're nailing it and are totally having a tremendous career. However, when it comes to investing, it feels like you're reading a book upside down. Welcome to Breaking your Golden Handcuffs Podcast, where we educate, inspire and hopefully, along the way, assist you to transform those commission checks and bonus checks and every other check you get into financial freedom. Every week, we'll deep dive into the world of investing literacy. Being uninvolved in your investing life will not get you to financial independence, and I'm here to guide you step by step, from understanding the basics to mastering the advanced strategies. Stay informed, stay empowered, and I'll catch you on the next episode of Breaking your Golden Handcuffs. Hey everybody, david McElwain, today we've got it with us.

Speaker 1: 0:41

A unique person, breanna Besky, is joining us today. She's actually a certified divorce financial advisor and while we talk about breaking your golden handcuffs in a bunch of different ways on this podcast, today I think we talk about something a little bit different, which is the cost of divorce and breaking your golden handcuffs. If you're in a marriage, that's really expensive, you don't want to stay there and you're contemplating divorce. It's an interesting topic Marriage one and two marriages end in divorce, but we don't talk about it enough. So today I'm really excited to have with me Breanna Besky.

Speaker 1: 1:22

She began her career in financial services in 2010 and previously spent four years with TUO Price and eight years with Jackson. She provides financial and estate planning through the use of equities, fixed income, securities, managed money and more through Raymond James. Breanna has the accumulated knowledge and perspective to help you with your financial goals. Breanna understands the dynamics of wealth, how to balance the complex forces at work and how to adapt intelligently as conditions change. Breanna resides in Colorado and is a member of the Junior League of Colorado Springs, a leader for Second Saturday of Colorado Springs. Away from the office, she also enjoys spending time with her family, photography and fun runs. Breanna, welcome to the show.

Speaker 2: 2:03

Thank you for having me.

Speaker 1: 2:05

Excited to have you here, so I met you through a Second Saturday workshop a long time ago, and for those of you that don't know, can you tell everybody what Second Saturday is?

Speaker 2: 2:13

I love Second Saturday. It is a workshop designed to help people understand the process of divorce in their communities. The goal of the nonprofit is to have a workshop within one hour of drive time everywhere in the United States. It hasn't happened yet, but it will soon. They are available both in person and via Zoom. And then, if you will give me another minute, I love chatting about how it started. It started in the 1980s from a woman out of California who got divorced. She was a financial professional like myself, and she walked out of the experience going like why, why didn't anybody tell me? And that's how the Second Saturday workshops were born. So the goal of them is to have a financial professional, a legal professional and a mental health professional there to help people know what they don't know and really get knowledge. And it's not specifically to say you should get divorced. It's Tim, how are you with information so you can make choices that are right for you?

Speaker 1: 3:15

Yeah, and that's so powerful. If you have been listening to this for a while, know I got divorced, should know I got divorced. It's been, it's going to be 10 years 10 years this year but we really separated 12 years ago and had a tumultuous divorce, extremely expensive, and six figures in legal fees. And when I got divorced, there was I didn't find any resource like this, and so one of the reasons my legal fees were so high was I had to learn a great deal. Fast forward a decade and life's really good.

Speaker 1: 3:47

But you know, it's fascinating when people go through divorce, they don't realize what it impacts in their life, and this podcast has been focused on alternative investments to the stock market, but I've got a person who makes their living selling stocks in the stock market. So bear with me, listeners. The reason for this is that I've always said there's diversity and keep to diversity, and one of the things is you've got to have a team in your corner, and financial planners are definitely a member of that team. So tell me, breonna, what? What about divorce? Do you think are the biggest misnomers from a financial point of view?

Speaker 2: 4:28

I'd say the biggest one I read into is that it's the end. It's. You know, this is the worst case scenario and I guess it's better if I start with why I'm in a CDFA, a Certified Divorce Financial Analyst. So when I was in my 20s ironically I think the timeline matches up really closely to your divorce my parents got divorced. I was out of the house, I had my own job, so it didn't affect me financially, but the emotional toll it was real. And what made a bad situation worse is my brother and I witnessed both my mom and dad making questionable financial decisions during an arguably very emotional time for everybody.

Speaker 2: 5:11

And I don't know about you or your listeners, but I feel very strongly the complex or the financial services world can be complex and confusing. On a good day you add a life-changing emotional event to the mix and it's impossible. So because of that experience, I like to work with my clients to understand where they are and then to articulate where they want to be and then, based off of that information, we put together a plan to help them get there. And when I found with my clients that are going through divorce, so they meet me either contemplating or going through divorce, it's so upsetting, like there is a loss of life that people thought they were going to have, there's a loss of community and there's so much emotion and it's upsetting and we work through that, we talk about it. I'm not a mental health professional. I prefer that out, but I'm happy to be empathetic and chat with people where they are.

Speaker 2: 6:15

But what I see time and time again is you can't think past this exact moment in time.

Speaker 2: 6:20

It's just too much, it's too upsetting and visualizing a future where you might be happier. It's really hard and what I found with my clients because I've got a couple that I actually met when they were in the middle of divorce and I now know them past divorce life happens after divorce and you can. There's light at the end telling you can be happy, you can get another life, you can rebuild. I mean, no, it's not easy because, quite frankly, with the clients I'm thinking of, they literally gave away half their net worth and they're not happy about that and now they're rebuilding it, but they're rebuilding it towards a vision they have for themselves and I can tell you that even though the net worth is lower and it's growing, thank God they're at a piece.

Speaker 2: 7:10

And David I know I chatted with you about a project I'm working on where I'm interviewing people that are successful post-divorce, aimed at people that are contemplating going through divorce, and what I found really is it is a lot of how you look at things in your emotion. But I'd say back to your first question the biggest misnomer I see with divorce is it's the end. You can't get past it, and I'm here to tell you yes, yes, you can.

Speaker 1: 7:40

That's fascinating. So there's so much in there I want to dive into.

Speaker 1: 7:43

My first thought was they only gave away half, congratulations. Every state has its own divorce laws and nothing we're talking about today is legal advice. Nothing we're talking about today is a counting device or CPA device, and we're talking about our experience, our knowledge. We're not giving any professional advice in this conversation, true? Yes, so the disclosure out of the way. This is designed around the idea of how do we regrow, and a lot of our listeners are creditors and investors, and so obviously giving away half becomes really expensive, really fast.

Speaker 1: 8:27

And generally speaking, in a divorce, the net worth is halved, just in general, and in some places it changes, in some places it's greater and there's some are false dates, some are no false dates and I don't want to get into any of that, but what you mentioned mindset. So when someone has a $5 million net worth and the next day they have a $2.5 million net worth, what's a good piece of advice on that?

Speaker 2: 8:52

I would say think towards the future, have a vision of where you want to be and think about the fact that when you got there once, you can get there again and you can be bigger, you can be better. Your experience has helped you get to where you were in the first place. You just went through a really crummy, traumatic experience typically, and then it can happen again. I mean so. I've worked with people where they're going through a divorce and they're looking to split their assets tax efficiently or they're looking to understand, if I take this deal versus that deal, what does it mean? Going forward?

Speaker 1: 9:33

Yeah, one of the implications of A versus B in a settlement, because people may not realize this, but if you're contemplating a divorce, it's a lawsuit.

Speaker 2: 9:43

It's a business transaction very often, and sometimes there are businesses involved. It sucks, but anyway. So let's say that you have a $5 million network that splits to 2.5. Now you're looking to say I want to get back up to that $5 million to reach this goal and you got to think about it. Do you want to go the way you did? Will it take you as long? Do you want to go a different way? I do have clients that very often say you know what I always wanted? To start a business, this is my opportunity. And they go that way, whether it's through themselves, with the business plan, with the franchise, with the partner. There are a variety of ways, but I'd say the best thing for people going through that is to recognize it's not a fixed moment in time. Maybe you can move forward.

Speaker 1: 10:34

I love that. I will tell you that from personal experience. When I was going through mine, I did not believe the world was going to be the same. I did have that mentality that I made it once. I'll make it again. And that proved out over time. But it's a challenging time, to say the least it is, and to think about it as a moment in time is really powerful.

Speaker 1: 10:56

Especially when, at that moment in time, everything is coming in on you and you feel like the world's falling apart. Recognize people have been there before and they've survived.

Speaker 2: 11:06

I mean I'd say if you're going not financial advice, the biggest piece of advice they've gotten from both attorneys and mental health professionals is find a community. Find a community as fast as you can If your old community has gone. You know I send my feelings towards you, but I've had clients as simple as going to a divorce group in their local church. I'm not advocating one religion or divorce group, but I am saying like, find a community, find a group people, find your tribe Because, as you said, you're not the first person to get divorced. It really sucks and I might feel really really bad, but find people who get you and understand you and that will help with the mindset. And from all of my conversations and all of my clients I can tell you that mindset makes a huge difference in how you're feeling and how your future is going to look post divorce.

Speaker 1: 12:04

Yeah, I couldn't agree more. If there is a mindset that turns you toward what you've lost, it's really hard to get over. Yeah, and my experience is that once the mind shift occurs that says, OK, my handcuffs are broken. I was in this place that was bad. Where I was in a place that I wasn't completely joyful, where I was in a place where my partner wasn't happy. There is more life out there. Regardless of the circumstance, there is a chance to start a fresh and rebuild. Which takes me to this idea of financial planning. One of the things during my divorce that we were able to leave unscathed was our kids college accounts. Congratulations, they will end their college careers with money left in the bank probably Pretty good investments.

Speaker 1: 12:55

So there is pros to 529 plans, guys. Don't ignore them. And looking back on it now, my plan when I went through the divorce was just to weather the storm and then make it all back. I assume that's a fairly common plan.

Speaker 2: 13:15

Yes and no. I work with people. So what I've found is, in a lot of the conversations I have, there's one partner in the couple that is handling all the finances every single bit, like they pay the bills, they budget, they do all that jobs. And then there's another person that you know trusts the other partner and then, when they're in a circumstance where divorce hits, they're like oh my god, what am I going to do? I never did this before. So, yes, it's awesome when you have the mindset I'm just going to make it all back. I applaud you.

Speaker 2: 13:53

But there are other people where they literally have to start from zero and kind of build their confidence up in terms of, you know, will I make the mortgage this month?

Speaker 2: 14:01

Like I had a circumstance of the highly educated individual that was making a solid amount of money in the high six figures you know, annually, and she was worried can I pay my mortgage? Like you probably know, and I know like, yeah, yeah, you can, it's okay. But literally sitting down and walking through, okay, this is what you're bringing in monthly, this is what you pay monthly, like sometimes that happens, so you'd be shocked where there are people that have to rebuild it and part of the value I thankfully am able to bring is like hey, did you think about this or that? And let's work through this, let's talk through this. Oh, you know what you should talk to. Maybe this person who specializes in helping executives, you know, do this and they can do a strengths based finder. So, yeah, I applaud the people that say let's make it all back, but recognize there's also another half the population that seems to say I need to start from ground zero and it's very interesting to see how that works.

Speaker 1: 15:05

Yeah, I'm sure it is. So for the people that say I've got to start from ground zero, it's like anything else that you almost have to. Why wipe the slate clean, I would assume and you talked about comparing revenue versus debits on a monthly basis just to think about okay, can I cover my bills? Yeah, from a from a structural point of view, how do people design wealth plans as they're going through and contemplating divorce?

Speaker 2: 15:37

Oh, that's intense. So usually the people who design wealth plans are the people that are in the partnership, taking care of all the bills. The people who are starting from ground zero, they don't. I usually meet them after they meet with the lawyers and they're like Okay, how am I going to survive?

Speaker 1: 15:56

So hang on a second. So you've got two different dichotomies here.

Speaker 2: 16:00

The person is very proactive.

Speaker 1: 16:03

The person is very reactive.

Speaker 2: 16:05

Yes.

Speaker 1: 16:06

Is that a fair way to say it?

Speaker 2: 16:09

Yeah, I didn't think about it that way. But when you say yes and it's interesting because the people who are proactive that find me first, they're, they care about their soon to be acts and they want their soon to be acts to be okay and they're like hey, can you help me organize this? So here are all my assets, here are all of my debts, let's do this. And like can we talk through ways this can be split up? That that is a conversation people want to have From there.

Speaker 2: 16:43

If you're starting from ground zero, usually it's after lawyers have been engaged and they're they're reactive. And it's usually because someone else has said like hey, you really need to talk to somebody about getting a solid plan. And with that it is literally looking at option a versus B, versus C and settlement options and saying, okay, this is what right now looks like, this is what you need to make your life work. How are we going to get there? And I've I've had scenarios where people will structure it with like, I'm getting this spousal maintenance more so upfront, so I can go, go back to school, or I can take this risk or name it, and then it tapers off because they're planning for this and then part of my value is we meet annually and say, all right, how are we doing on plan, how, where do we need to pivot, where do we need to tweak? And that actually that conversation happens with both people that are proactive and reactive.

Speaker 1: 17:48

Fascinating so helpful.

Speaker 2: 17:50

Is that what you wanted? It's just it's sure.

Speaker 1: 17:54

So when I think about a CDFA, I had never heard of a CDFA. Tire went through the second Saturday workshop and kind of doing some learning, and I actually on a real estate brokerage as well, so I was going in there to work with some possible transactions on the residential real estate side. But what is the difference with a CDFA versus a traditional FA? You know, certified divorce, financial advisor versus just a financial advisor, right? What's the difference?

Speaker 2: 18:24

So I got to go through some more training. I get to take some continuing education that is required but ultimately I have a lot more experience in what happens in divorce. So example that legit happened a couple months ago is working with an FA where the FA is helping one party, I'm helping the other party and the attorneys bring up and down we need a quadro and the other like the other phase, looking me like do we actually like this the type of investment? It was an IRA. Now you don't need a quadra. I don't know why they're saying this.

Speaker 1: 19:02

So just a second, a quadro, guys, in case you don't know what that is, is a qualified rollover disbursement of a 401k program.

Speaker 2: 19:09

It stands for qualified domestic relations order and it's required for anything that is ERISA. I'm sorry, use more acronyms, but if it's a retirement plan is under the ERISA guidelines, it requires a qualified domestic relations order.

Speaker 1: 19:30

Basically it's a quarter ordered sign piece of paper saying yes, you move this money from A to B. Both parties sign it. Not a big deal but it can be contentious at times and it just costs more money.

Speaker 2: 19:41

I was going to say. You're typically paying someone to prepare the paperwork and then, if you're doing it right, the person who prepares the paperwork is getting it pre-approved with the plan administrator. So again, if it's a 401k plan, they're calling the company up and saying, hey, I use this writing, are these words okay? And they're like yes, include this word, this word and that word too, and then you bring it to the courthouse, the judge signs it and it's a whole thing. But again, most financial advisors can say, oh, you don't need a quarter for this. But I can tell you very confidently you can't In these circumstances. This is where you can.

Speaker 2: 20:17

And then, how to split assets what do you different? Even though it was an IRA that didn't require a quadro Qualified Domestic Relations Order, it required both signatures of the person receiving the funds and the person who was giving the funds at the X, and that is something that they didn't know pre-divorce and they had to go back to the X and get the other signature and it was a whole thing. Thankfully, the financial advisor and I were on the same team. But you don't know what you don't know. And the value that ACDFA brings is I work in a number of divorces annually. I've seen this stuff before, so it might be your first divorce I've seen. Oh, this is how we disperse these assets here. Let me help you, let me guide you through the scenario.

Speaker 1: 21:10

Yeah, and when you're dispersing assets, it's also important to recognize that there's a whole team involved, and the attorneys sometimes don't pay attention to financial wealth planning. That depends on the attorney.

Speaker 2: 21:21

It's not their job. To be frank, the attorneys specialize in the law and the attorneys that call me typically recognize that and are looking either for well. They're always looking for a better client experience and they recognize this is not an area of strength, like let's get somebody who actually knows what's going on here.

Speaker 1: 21:39

Right and that's crucial. So I remember that when I was negotiating with mine, part of my settlement came through a quadra because it was a tax-free transaction and it was a simple way to ensure that my then wife, now former spouse, had retirement set up and secure. And it turns out I don't think she realized at the end of the day all of the implications of that so great illustration of where a CDFA might have come in.

Speaker 2: 22:16

Definitely, and I mean there's special rules around quadras.

Speaker 1: 22:20

Yeah, I don't know that for fact, but from some of our discussions thereafter I confer that she felt like she is bamboozled and we both actually were very proactive in our financial world. So she was not our novice by any means, but it's fascinating how one piece of information can really change the perception. It really does.

Speaker 1: 22:44

Yeah, I guess that is why the CDFAs exist, then, to be specialized in. Like anything else, a specialization skill set creates deeper knowledge of the subtleties involved. So what other specialties of people are contemplating divorce that people really need to explore before they make the final decision?

Speaker 2: 23:03

So when people come to me and they say they're looking at a divorce, my very first comment is have you chatted with a local attorney and you want a family law attorney, typically, or someone that specializes in domestic relations. You want someone who's local, that has familiarity with local legislation, and very often attorneys will do consultations where they will be straight up. They've got ethics so they have to be straight up whether or not they actually can help you in your circumstance. There are scenarios where attorneys will say no. There are scenarios where all say no. So that's my first thing. The second thing is, if you own a home or a home is going to be part of the conversation you might want to consider getting a certified divorce real estate expert, and I mean you definitely do.

Speaker 2: 23:54

I've had clients where the value of the house was a really big deal and the certified divorce real estate expert, or CDRE, walked in, did a market appraisal of the house, was able to give them a multi-page document that bullet points out here's where it's valued here. If you did this exact thing, this is what it would be valued then, or if you did this. So it was a really solid document. And then what made it more valuable for my client's case is the person was able to be an expert witness and walk in and do that. So explain to the judge. Here's this big report that the attorney submitted. This is what it means to you. This is what it means to this client and that party.

Speaker 2: 24:43

The other person you want to consider is a certified divorce lending professional. Again, if there is a house involved, sometimes you might have to refinance or buy a new house and with a certified divorce lending, there are subtleties involved. There are rules involved. I kind of going back to the conversation of the proactive versus reactive very often the reactive person who's doing everything from ground zero was a stay-at-home mom and they're like but you need two years of work history and the CDLP certified divorce lending professional can say, yes, but because you've had more than two years of being a stay-at-home mom, that counts and here's how it works and here's how we can structure it as compared to a regular lending professional who typically very awesome. They just may not have experienced that before, so they don't know that those rules exist.

Speaker 1: 25:38

Yeah, I think that's a great piece of learning here, which is that when you're going through a life change, whatever that life change might be my experience is you find the expert in that field because the general person doesn't know.

Speaker 1: 25:48

For example, I was working through some lending issues yesterday and I went to a banker that I know and we were pulling out different elements of my tax return to add back in deductions, and he said to me hey look, if you went to the guys in the front of the office, none of this would ever happen. And it's not a shot on somebody, it's just that they didn't understand that there's a cost-regulation depreciation off of K1 that I have and that doesn't make sense to them, and so it's crucial that you have people in your team that really do understand subtlety. So, brianna, we try to keep this into about half an hour. We're coming down to the little bit of the bottom. So tell me what's one piece of advice that you wish you had 10 years ago that you now have today, or something that you learned that you wish you had known a decade ago?

Speaker 2: 26:45

Have a solid vision for the future you want and then revisit it often. I wish I had known that a decade ago, yeah.

Speaker 1: 26:53

Tell me more about the revisiting and often part, because that vision part makes sense, right? Everybody says make a goal and if you don't plan to fail, you fail a plan. But what you're saying is you don't fail, you fail, you fail a plan. And then you have to modify your plan.

Speaker 2: 27:09

Exactly Now. You really do, and I'm biased because I do this professionally. But a good plan is all along good. But if you have a plan for 10 years ago and the world has changed your world has changed it may not be applicable. And having the flexibility to say, okay, this doesn't work, let's pivot, let's see where we can maneuver or be nimble, that's powerful. And, yes, everyone's like have a vision, go towards that. But no, really revisit that vision and see where you can go from right now and then revisit that going forward.

Speaker 1: 27:46

Yeah, I love that. I've been doing this once a year and I make economic goals for the year and I do those versus the plan so that if the plan is changing I change it. If I'm saying I'm going to go buy 10,000 apartment units and there's negative leverage from the Fed, that's not a rational plan.

Speaker 2: 28:02

Yeah.

Speaker 1: 28:03

Yeah, and I can give them their control over the Fed. Right, you control your control, so you can surrender what you can't control. So then is there a piece of advice that you followed that you wish you had ignored in your career.

Speaker 2: 28:14

There's a lot. Let me think I don't have a good one. Really I'm sorry. Yeah, I've had bad advice, but it comes out. Sorry, I don't have a good one.

Speaker 1: 28:33

Well, okay, the blank slate is great. So, as we wrap up, tell everybody what's the best way to get ahold of you, if they want to learn more about CDFAs or if they're contemplating this. And then, do you work nationwide or only in one little area?

Speaker 2: 28:48

So I do have clients across the country. I primarily work with people in Colorado, but if you're not in the great state of Colorado, I will work with you. Just call me up, and the easiest way to reach me really is by phone. My phone number is 303-200-1417. You can find me on LinkedIn, Brianna Besky, or you have a website All of the above. Please feel free to reach me.

Speaker 1: 29:14

Great, and we'll put all that in the show notes for everybody. So, brianna, thank you so much for joining us, and that brings us to another close of you've been listening to. It's easy for me to say today, guys. Anyway, that brings us to the end of another episode of Breaker Golden Handcuffs. Thanks for joining us and have a great day.