Managing Divorce Panic - How to Think Long-Term Settlements with CDFAs Scott Levin and Tatiana Sunik

Hey everyone, this is Scott Levin, Chief Peacekeeper. I'm a mediator and attorney in, in California. I'm here with Tatiana Sunik. Hi Tatiana, how are you?

Hello there, how are you? Nice to see you.

Yes, nice to see you. Tatiana had a really, really good idea for a topic to talk about, so that's what we're going to talk about. And it is basically, um, the short-term panic that people feel when they first are starting the divorce process. And versus like the long-term possibility that comes from careful planning during the divorce process when you're negotiating a settlement. So a lot of clients that I work with, um, you know, at the very beginning, they're like, one, they might be really focused on the home. I just need the home. If I get the home, that will be really important. That's all I want. And they're really like hyper-focused, and they're not taking the time necessarily to take a breath and to look at how that decision or whatever decisions they're making would affect them and their children long-term, not just at month 1, but at year 5. And Tatiana, that's kind of a niche that Tatiana has in helping people. And Tatiana, like, how do you see that place versus where people have those short-term goals, but you encourage and they need to focus on the long-term? What are your thoughts?

Right. So I think that short-term panic is very natural in divorce, right? But it's dangerous. So mediation certainly comes to conflict and, you know, lets you think clearly. So like, kind of that's where you step in. We took a pause and we're going to negotiate this, right? And the financial guidance gives you like ability to step in and create a roadmap and turning this unknown into more of informed, confident decisions. And what are we contemplating here? How's this going to serve you long term? So we are doing this one time. We want to make sure we have a good aim and to take our shot. And I think And a lot of times people are just so focused on that immediate gratification, and they tend to not put the patience into really seeing through what is this going to look like. And I think a lot of it is scary also too, if you think about it, like, what's the future going to look like? A lot of times it looks looked upon negative, like, oh, I'm going to not be set for life or whatever. I'm not going to have enough to even start somewhere because I'm not earning as much. But I encourage people to look at it From the fear, really, like perspective to the strategy. All right, the fear is fear. How much of it real and how much of it is not? And let's create a strategy. How are we going to rebuild? And I think taking that positive view really does help to really bring the strategies, right? For example, like home. Is home a good asset to keep? Is this the liquidity issue for us? Or how is the alimony going to look over time? And for some individuals who have young kids and they have Sort of these long marriages, and they're still gonna be in the house somehow, right? To get these kids out in the school districts. So okay, child support—that's given. But what about like maintaining that house and the caretaker comfortable so she can do her duty for the kids? And sometimes, you know, I work with high net worth individuals, and they work a lot, and they want fifty-fifty custody. Well. Let's get real, like, you are gonna have it, but you are understanding that the hours that you work and the time you're putting in the career is gonna really sort of— the caretaking part is gonna fall more on the spouse, right? So yes, let's negotiate like that, but we also want to be realistic and fair. And I think also, I know the financial world. I've been in this industry for 23 years. You know, expectation that somebody who's high net worth executives or that sort is gonna be working and earning the amount of money they're earning till 65 is really unrealistic. And having someone like an expert to really testify that during divorce is very important because, um, you know, there's infidelity, you sort of don't believe anything they say. But like, I, I know that the tenure for executives, for example, mid-50s, after that they get pushed out. So like, don't expect your husband to be this couple million dollar earner, you know, for the 65 age. Like, this is just the reality of it. And when you have, again, a professional really testifying the way where you really know the space, I think puts a little bit of a pause in the perspective and that sort of renegotiation angle where, like, now I got that spoonful of honesty. Let me go home and think on it and sit on it. And actually, let's take back the emotions and let's really do this right.

Yeah, I mean, taking back emotions is really important, especially when there's not a lot of trust between spouses. In mediating, that, that's quite— that happens all the time. So there's not trust, but they want to get through the process in an amicable, you know, fair way, and then not to spend, you know, exorbitant amounts of money.

You probably do something more of a collaboration, right? Instead of like winning today approach, I would think.

Yeah, no, absolutely. It's, it's, it's all about like give and take. And I have a client right now that's really interesting. What you said is that There's also a math answer to a lot of these questions. And if you take a breath and you allow that math to be written out— so I have a client right now where the higher-earning spouse, the one that's that executive type that you just mentioned, in their early 50s, they want to do a buyout of spousal support. So they want to give all the money upfront. And, and the other spouse doesn't. trust anything that they have to offer, so they immediately reject it. But if you do the math on what was actually offered, if they would allow that, if they would allow— like, they won't take it. They won't allow that math to, like, enter their brain. It's just an emotional response. But that math shows that this is why this would be better for you long term based on the— based on, you know, what the reality is in their situation. And emotions come into this, but you also, you know, So working with someone like you that not only can help them understand, like, you've been there, you've done that, you have this experience, um, and you're, and you're on their side. But in a mediation, really, it's a delicate balance. It's really helping them let, like, you run the numbers, you show them long-term what's happening, and, um, and avoid those short-term decisions. Like, I hate, I hate what structuring settlements. Where one person gives up all the cash that they could possibly give up in exchange for the home. And it just always makes me so nervous. Definitely couldn't afford that, you know, long term. That just is not a— it doesn't usually work out financially. What are your thoughts about that? Just that one issue?

Well, I think that whole survival mode is very real. And, you know, I try to shift it to strategic planning. And actually, some people feel like they are strategically planning, but they're not. They're shooting just like arrows in the dark. And they say, well, I don't think it's enough. I don't think it's fair. But like, have you compared it to— have you done a financial plan? And a lot of times I hear like, he's going to take care of me. He said, like, what is the number to take care of you? Have you run a financial planning projection to understand what money do you need to endow your portfolio? I work with some clients who have some real estate and they say, well, I want to keep the house. He can have another property. Like, well, that property produces an income. It's an income-producing property. Are you taking the property that's you're gonna have to feed, right? You have to, you know, live there, you have to take care of the house, you have to pay the taxes. So you're having like that, you know, cash cow and he's having an income asset. So like that has to make sense. Then let's just structure it a little bit differently. If you feel like you need the house, then this is the consequences, maybe for immediate term for 5 years. But remember, if you sell the house before marriage, you could actually share a lot of costs and all the percentages that you have to do the fees, right? Before that, and it could be split between 2 parties. If you sell it after, then you are responsible for all of it. And they're like, oh, and, you know, in New Jersey, for example, a state, they have the sales tax right now, which is 17%, which the seller's paying. That's quite a hefty percentage for just, you know, just to give up. So make sure you really think about the strategy if you want to keep the house. Is the house going to get you bankrupt? Can you afford to keep the house?

If you keep the house in that sort of situation and And then 4 years later, you have to sell it. That's a huge, huge financial loss. Yeah. Yeah. No matter how much the house goes up, if it does, just because, just because those costs of the sale and the tax liability.

Yeah. Plus, like, you could have done with that money and put it somewhere else, and maybe it will make you a better return than that house. So, yeah, it's certainly interesting, but you can't look at the style just in the house. You really do want to see everything else. So it's like retirement, right? If there is not much room to work with, you have like a house and retirement assets. Like that's something creates for creative solutions or alimony is upfront better than in 10 years. Well, I've seen some people like, oh, I want to give her upfront everything. So that pauses me a little bit. Why do they want to give the alimony all at once? Is there something happening in the business down the line that they don't negotiate, which is fine, but we want to make sure then if we do, And there's a discount on the table to negotiate, you know, for her to take lump sum. What is the number we're using for discount? And is this fair? And you need to know the full story too. And sometimes—

There's lots of nuances. Yeah, lots of nuances. You know, I'm also, when someone's proposing a buyout and pushing for it, you know, the question is like the why. It's always important to know. And if the why is Um, that, um, and if they're being genuine, hopefully. But if they have to exchange funds on a monthly basis, they think that it will ruin their, the relationship that they have and their co-parenting versus if they could just get that off the table up front.

Oh.

I mean, I hear that sometimes, and that's a legitimate reason. Uh, but yeah, no, you have to, you have to definitely be on, uh, you know, your toes when you're doing any major decision. And one thing you said, Tatiana, is this is like a one-time decision. Like asset division is like, you got one shot at this unless it's a very rare case. So you have one chance. So don't rush through. Don't let your emotions take you through. Let your brain work and get help from a professional that can project forward and, and give you that, you know, that, that long-term expectation and that understanding. I think it's just hugely, hugely important and beneficial.

Yeah, yeah. And I'll also say the real estate market definitely is interesting and calls for creative solutions like refinancing mortgages. It becomes a whole new mortgage. It's expensive. And in some cases you have 4 or 5 years left on a mortgage. You can work something out, right? Then this money can go to kids than giving it to a big institution in the black hole. So like mindful of this, right? If you don't trust her to pay the mortgage but want to keep her, can you still get the second mortgage? When you say no, have you done the homework? Have you even tried? Like it's worth a try because then Her, her alimony that you're paying, half of it, a quarter of it will go to that mortgage that she's gonna assume, right? But why not have her do that for the kids, right? Something like that. Because it's all the, the money they've created over the long term in the family.

In the family. I love that. Exactly.

In the family. Don't, like, let it out to left and right mortgage companies.

And it's not just burning it on attorneys or professionals. I mean, look, that's, that's a— those are Valuable uses of money. I believe in mediation, but professionals during the divorce process, that's not burning money in my mind. What's burning money is not doing the planning. And like you said, why give Chase Bank, you know, over the course of 10 years, an additional $200 grand when you could keep it in the family?

Exactly.

So getting that expertise and that consultative— that someone on your side that can help you. Through that. And then, of course, they have to make, you know, mutual decisions to stay on a loan or to keep a loan intact and things like that. That's— those are always decisions that they have to come to together. So hopefully they have someone that's helping them work together, keep the family together just in a different way.

Yeah. Yeah. And I think you're doing a great job of that. So.

Yeah, this was great, though. Can you tell folks where you are, how you work, where you can work, all those details?

Yes. So I am in Metro Area, New York. I am a CFP, Certified Financial Planner, and I'm also CDFA, Certified Divorce Financial Analyst. I've been in wealth management space for 23 years, divorced myself for 11. I've helped numerous individuals and families through this process. This is not the only business sort of in my value proposition. I also work with normal intact families as well. I am for keeping the family, but if there's alternative of not to, you know, I tend to help as well. And I, I work with many states. It's not particularly bonded to New Jersey or New York or Connecticut because I am not an attorney. So I'm not licensed with my divorce consulting work just to one state. So I'm open to many states.

So someone in California could call you, someone in Florida?

I have some clients.

Okay, great. Yeah, I mean, I know Tatiana well. Just really, really a valuable resource, someone that's very genuine, very smart. So I can't say enough good things about you, and I love the topic, and I really hope that people, you know, really take the time to project forward. That's the key to a successful outcome. And then if you get that advice and you get that guidance and you make those decisions, then hopefully, you know, 11 years later, 9 years later, whatever it is, when you take that breath in, you don't have that regret that you didn't— what could have been or what should have been— that you've done your planning now. And, and, and you'll be able to live forward because, you know, that regret, that feeling is really— can eat away at people. So, you know, get the guidance while things are going on because it's a one-time shot at that asset division. But thank you so much, Tatiana.

Thank you, Scott, for having me. And great to be partnering with you.