Mastering the Financial Aspects of Divorce with Lisa Ziderman

Welcome to today's episode on the Wealthy After 40 podcast. My guest is Lisa Ziderman. She is a managing partner at Miller Ziderman LLP based in New York, a matrimonial attorney, CFL, and certified divorce financial analyst. She regularly handles complex financial and financial and custody divorce matters, as well as pre and post nuptial agreements for the high net worth individuals. Lisa is a founding member of the American Academy of Certified Financial Litigators, a member of the Panel for Attorneys for Children, and a member of the Forbes Business Council. She is here to share her expertise on divorce and finances. So I just want to say thank you for joining us today, Lisa. Thank you so much for having me. I'm so excited to be having this discussion and conversation with you. Yes, I think it'll be very beneficial for our listeners. Either they've been in one, maybe they are in one, maybe they know somebody who's, you know, going through one and they're able to put, you know, pass on your expertise to somebody else. So I want to start off with how can an individual prepare for the best financial outcome in divorce? So it's interesting that you ask that question. So because I think that the most important part of doing well in your divorce is preparation. It means being prepared in terms of getting your documentation together, making sure that you have the right attorney and frankly the right team put together. And we can talk a little bit about what that team might look like. But the most important first step is to start to gather information and to be familiar or as familiar as you can be about your finances. Now, that doesn't mean that everybody's going to going to be familiar because Believe me, we have plenty of clients who come to us who really don't have either the background, the knowledge, or even the opportunity sometimes to understand their finances. Perhaps it's someone who isn't actually even permitted to look at the financial documents. And so that person is going to be coming to us, perhaps without any financial information or very little. But as much as you can start putting together tax returns and bank statements and credit card statements and, you know, all the little bits and pieces so that you are creating sort of those breadcrumbs, that will be the most helpful thing you can do for yourself. Yeah, very, very good. So you answered the next question. I was going to ask about key financial documents. Is there anything beyond the ones you've already mentioned that individuals should look at? You know, I, I think that any business, so if your, if your spouse, your husband or your wife owns a business, key documents will be those business tax returns. If you, if there are such a thing any documents that are getting sent to the accountant, for example, you might share an accounting firm account. Although maybe you don't don't even have access to the accountant, but those documents that backup those backup documents, those are really important. And I think that if you start with the tax returns and the bank statements and the credit card statements, you'll have a good base for your attorney to start to look through documentation. How much, like print wise? One year? Do you need more than that? It's a great question. If you can go back five years, that's ideal. Some people cannot do that. And then, there is that other piece, which is separate property. So, if you came into the marriage, or if you inherited the property certain assets during the marriage, you want to make sure that you have the documentation to prove your separate property claims. So that may mean many, many, many years of statements. And I know that some of you who are listening have said, well, I threw those out a long time ago. And so you're going to go back to your financial institutions or back to your family members or back to any place that you think those documents might be and collect as much of you that you can to prove your what is might be your separate property, because that could be a large amount of money for you. Wow. Yes. It's, it's quite entailing and can be quite a bit. So I love how you say, just start with the bank statements, the credit cards, the tax statements, right? And even looking at your taxes you can reflect back on what was going on. If there was anything that was not just usual income, if there was, you know, something like you said, early breadcrumb, that's what I'm thinking. I'm like, okay, go look through those. And then, you know, go down that trail and go see. So love that. Love that. So an attorney starts off with the financial documents with you. What's next? What's the next step? So I think before you even get to, you know, the, to who is going to be looking through them, you need to first pick your attorney, right? And I think that that's part of preparing for your divorce is Getting to the right person who is going to be able to take you through the divorce from beginning to end. And that may mean either settlement or litigation, somebody who actually is going to be able to negotiate the best agreement for you or the best deal for you, or if there is no deal for some reason, who is going to be able to take it to court if necessary. So, you know, it's, it's gathering names. It is you know, asking friends, it's asking the professionals in your life. So for example, if you have a trusted therapist, they may know of a great attorney because they probably have other patients who actually have gone through divorces. And that's a great source for you to actually ask. You know, other people who are in your neighborhood who, you know, have gone through divorce, who you may be friendly with you might ask those people or just hear what they have to say. These are all ways to figure out who those professionals are. For referrals. And then once you have found that trusted attorney, you need to figure out what are the other professionals who you may need in your case. So, you know, we talked a little bit a few minutes ago about business valuation. So if there's a business, it may need to be valued who is going to be the accounting firm and perhaps the forensic accounting firm who's going to do that. Valuation that's going to be important. It makes a difference. Who does your attorney recommend that you utilize? There may be several you know, we have certainly several accounting firms that we work with and that we think are reliable and thorough. And competent and frankly credible. Also really important. Who is going to evaluate the real estate? Do the real estate appraisals? Who's going to do the you know, the division of retirement accounts? All of these things are so important. Do you have a trusted therapist that you're going to work with? Who are you going to work with to figure out co parenting strategies and how you were able to co parent with your, your other parent? There is really a team that needs to be put together to get through a divorce. Sometimes people don't realize that you need all the components usually. Yeah, that makes sense. I always share how I have my financial team and I'm talking. I have a lender, my realtor who helps me buy and sell, you know, all of those things. So it's, it is important to get people in your, you know, your corner of the ring. So yes, very, very good. Very, very important. All right. So what is the next step for somebody? So the next step is actually that we do is actually for someone to fill out what's called the statement of net worth. That is the most important document and that document is going to follow you through. And so remember, I talked about all those account statements, those tax returns, all of that, you're going to need to figure out what is your lifestyle, what is your burn rate every month that you have have to meet in order to pay your expenses either your necessary expenses or your luxury expenses, whichever they are, right? And, and which are the luxury expenses and which are the necessary expenses, but that's your burn rate. You know, you put it all together. That's your burn rate. And you need to understand what that lifestyle is that you either have to pay for or that you need funds for to support. What are your children's expenses? Are they going to go off to college? Are there 529 accounts? You know, what, what is there? In order to fund all of this, what are the various incomes for you, for your spouse and you need to start to think if you're not working, perhaps you need to start to think about what's your path that you're going to utilize to find work, because eventually it's very likely that you will need to have two incomes if you don't already. Yeah, so true. I had an earlier podcast with a divorce coach Former attorney and she was expressing that a lot of a lot of people don't evaluate that need to get back into the workforce. And I think we discussed like it don't fret it. Just start carving out that path and start taking that direction. So I love that. What is what do they do from this point? There's a lot going on here. So after we do the net worth statement, and we put that together, and that is a big job, frankly, it is not a small endeavor, and you need to be patient, but you need to work through it after the net worth statement that what we start to do is. Obviously we file, you know, we may file for divorce or we may just send a letter and everybody starts to collaborate and work together both sides. But once we start to go down that path, there's going to be the discovery piece of this. And that's the part that we, where we are getting documents, sending out documents, reviewing documents perhaps, you know, sending documents to the accounting firm and starting to build what we call the marital estate chart. So that we know what all the assets are. And trust me, that's a big job sometimes, particularly if your spouse is not forthcoming about that. So, you know, we're on a case right now. We're discovering cryptocurrency. We're discovering that there are, there's life insurance and it's not just term insurance. You know, and, and we are seeing all these different accounts, credit cards that were not credit card accounts, statements that for accounts that were not even revealed and, you know, The nice thing about discovery is that usually one thing leads to the next, right? So you can see, for example if there was a credit card that somebody did not reveal, but there's a payment to that credit card, all of a sudden we know that we have to now subpoena that credit card company. And so your attorney should be actually going through all the statements. I think sometimes It's an interesting thing. Sometimes attorneys love the hunt, but they actually do not look through the documents. And it's very important that both you and your attorney are looking through the documents that you're receiving because it's not just hunting for the documents and getting them in. It's actually going through them. And then when you actually get your documents, you may actually have questions which can be answered sometimes under oath in a deposition. In your attorney's office. And perhaps, you know, you will have a deposition. Perhaps your spouse will have a deposition, but that will help solidify the components of the marital estate chart and also help also solidify perhaps separate property claims that somebody has as well. And so that would be the next step. It's discovery and then depositions and then hopefully settlement, right? Putting together that proposal. And figuring out what that proposal is and what you can live with and what you actually would like to do to in order to settle your case. And I always say that is the client who has to decide that, right? We decide strategy, but the client decides settlement. Yes, very, very important. Okay, so I want to go back, but there's two different things I want to ask. The first thing is, you said attorneys love the hunt and they don't love to look through. You're a certified divorce financial analyst. Can you explain that, and maybe is that a benefit for somebody to look for who may have this need of looking through a ton of documents? So I think that first of all, anybody who has a financial background is a great person to utilize as an attorney in a divorce situation because it is largely about finances. You're going to have two issues, custody and finances. Those are the two components, right? And you know, it is very important that somebody have the practical, reasonable approach in terms of what to do with your children. Right. And how you're going to co parent. And if co parenting is not possible for some reason, how that attorney is going to deal with that issue. Perhaps co parenting is not in the cards because you may have a spouse or another parent who just is incapable of co parenting. And you need to be able to deal with that and perhaps make the decisions for your, your child. Because perhaps that is in your child's best interest. So you need somebody who understands that. You also need somebody who understands the finances. So, for example, as a certified financial divorce analyst you know, that person has been trained and understands the difference between trading, let's say, retirement accounts for cash accounts, retirement accounts for Perhaps, you know, equity in a home. You know, what executive compensation is all about, how to divide up restricted stock units, vesting, unvesting, you know, all of those are complicated issues and your attorney should be well versed in them. Some attorneys are very well versed in them, but some attorneys are not. And it's important because If they overlook those really important components, if they overlook the tax consequences that are associated with some of these particular assets, then you're going to end up in a situation where the deal is very lopsided. And that could be a real problem. Yeah. Oh, so good to know. As somebody who's dealt with finances on a government level and even personal, It takes a lot. It takes a lot to learn and understand and so yeah, definitely look for somebody with that. I think that is key. Thank you for sharing that. All right, so then we're talking about deposition. So what is a deposition and why is it important in the divorce process? It's such a great question. So, you know, so many people get all of this information and they, they don't as clients understand what these components actually are. The first time they've ever heard these words, which is understandable, right? If I was a patient of a doctor, I'm not going to understand all of the different instruments or all of the different operations. So a deposition is an opportunity for your attorney to ask questions under oath of your spouse. And it is an important question because sometimes, you know, you'll be looking, for example, at credit card statements, but you won't know what is this expense or what is that expense or why was there, you know, a transfer of 100, 000 from this account to where, like it just disappeared. And where it where did it go? Those are important questions. Why are you know, and we've seen this sometimes. Why are like literally millions of dollars getting transferred from one account to the other account? And why are they going from one business to the other business? These are questions that need to be answered and they need to be answered, frankly, under oath so that you can preserve the testimony and it's important to do that because if you don't settle your case, And sometimes it happens if you don't settle your case, you may end up in court and you may end up in a situation where there literally is a hearing or a trial and you can utilize that testimony if someone says something different at the trial or the hearing to impeach credibility, for example, and so. You know, there's there's a saying that you never want to ask a question at trial that you don't know the answer to. Well, if you've done your depositions, you won't be asking a question that you don't know the answer to because you will have asked it at the deposition. So it sometimes takes, you know, a full day, maybe longer. And you're you have your attorney and your spouse's attorney and your spouse and maybe four or six of you are in the room with other attorneys and a reporter. Who is literally taking down every word that is said, and you're asking questions. So I might ask, for example you know, how did you arrive at this particular number on your net worth statement? Or you know, is your net worth statement accurate? Or did you what is this document? Why is this statement accurate? This particular asset not listed on your net worth statement. Sometimes people leave things out on their net worth statement, either by mistake or purposely, and this is the opportunity to find out what has gone on here with it. So it, it's, it's an important vehicle to learn more about the finances. Yeah, amazing. And I think a lot of people, they hear the word deposition and they are scared by it. So I think that's great to learn. So how does one prepare for a deposition? So if you are being deposed, you want to work with your attorney to learn to answer the questions that are being asked. So, you know, I tell this to people all the time. You need to listen to the question and you need to respond to the question. To the question. This is not a place to tell your story. It's not your your day to give your narrative. You might give your narrative at a trial someday, but you're not going to be giving your narrative in a deposition. In a deposition, it's your time to listen to what is being asked by the attorney and to answer the question. And, you know, it's and take a pause. It's not a race to the end, right? Take a pause. Think about what the question is. Answer the question truthfully. That's the most important piece. But make sure that if I ask you, what time is it? Don't tell me how the weather is, because that's not the same response that we're looking for here. And it's important that that people understand that sometimes you learn a lot in a deposition because somebody has decided they're going to actually give you their narrative of what they want you to hear. And that From my point of view is a mistake because it, it, it, you may be giving too much information, information that is not even helpful to your case. So you have to both learn to take a deposition. And you also should be participating with your attorney and putting together the questions to be asked of your spouse by your attorney. So you may have a whole list of things that you want to be asked and you can give those questions to your attorney to ask at the deposition. Perhaps some of them will be relevant. Some of them may be irrelevant. It's going to be up to your attorney to decide that and you have to trust your attorney to do that. Oh, wow. Wow. Yeah. Very good. Okay, so we work through the deposition. We head to litigation. What does somebody expect? What are the stages? What should they plan for? You know, mentally, emotionally, and anything else? So I think everybody really wants to, for the most part, to, to resolve their case. And that's what we try to do is to resolve somebody's case without litigation. But many times it's just not possible. And I think that you have to work with your attorney to figure out what is possible and what is not possible. Now, attorneys should not be just arguing amongst themselves just to argue amongst themselves. That's not helpful to your case. But they may be arguing, for example, about documents that aren't produced, or they may be getting documents to be produced, or they may be arguing about What support should be or or alimony should be or how assets should be split up and all of these are important issues that are that that need to happen. Sometimes you can't reach a resolution and that's why you have judges. And that is what litigation unfortunately is about. Sometimes you need a judge to tell you what to do. I was, I was just in court just 20 minutes ago and literally, and, and the both parties could not come to an agreement. We've been there probably three times on this particular issue. And finally Both of both attorneys said, you know what judge, we just need you to weigh in. We just need you to tell us what, what your view is so that you can tell the clients what they're going to do. And it was a very simple situation. It wasn't a difficult question that we were asking, but each person had their own position and the judge was able to listen to it and, and make a decision and say, this is what we're going to do. And this is what I expect the parties to do. And guess what? It was much faster than arguing about it for months and months and months, frankly, and getting nowhere. So sometimes you just have to understand that although I know people want to avoid litigation at all costs, sometimes you just can't do it. There's a reason that you're getting divorced and it's not necessarily because you agree on everything. Yeah. Okay. So I, I want to ask a question about, you know, you, you gather the documents, you do the depositions. You try to work it out. How long should somebody expect, you know, and then maybe should it be on them to ask this to go to litigation to have the judge help resolve or how does that process flow and work? It's a good question. So I would say that for the most part, you're going to be guided by your attorney as to when you're going to be in litigation versus settlement mode. You can always say to your attorney. You know what? I just do not want to be in litigation and this is how I want to settle my case, but the other side has to want to settle it. Okay. And if all you're doing is spinning your wheels. And, and frankly, your attorney is just not able to get the other side to come to the table because frankly, you can't force somebody to come to the table. Then you need to start preparing for the other part of this, which is the litigation. You need to make sure your filings are in. You need to make sure if you're not getting the proper support or if you're, or if somebody is over spending on credit cards. If work in both directions, that you are dealing with that properly in, in perhaps before a judge, perhaps an emotion that needs to be submitted so that a judge can actually make a decision and an order. If your children are not actually being dealt with properly, if there's abuse of some sort, if there's alcohol issues or addiction issues, or you're not getting the decision, That you are supposed to be getting, or you can't do the valuations because the documents won't be forthcoming because your spouse is not giving them up. And likely you're going to need a judge and that's going to be litigation. And you have to be prepared for that because If you, if you need to pivot to that, you need to make sure that you have an attorney that can do both. And you need to be able to pivot in your mind because sometimes you just can't get the other side to come to the table. Oh, yes. I, I thank you for walking us. I think, I know this is such a big subject, we've just skimmed the surface, but we've kind of walked from beginning to end with probably several questions people might have in between. How can individuals connect with you or what would they need to do if they have certain questions? So they can definitely go to my blog, which is LisaZiderman. com. And there's a place to contact me through the blog. And there's a lot of information on the blog. They can also call me at 914 455 1000. Or they could actually reach me by email at LZ, my initials, LZ at MZW law. com. All of these are great ways. To actually contact me and I am also going to say if there are, and I know you are actually out of Utah. So if there are questions that people have about financial issues, there's also a free helpline. I'm on a board called Savvy Ladies, and it is a free helpline that that people can call into women particularly can call into. And get free financial advice through being teamed with one on one with a financial professional. And it's SavvyLadies. org. It's a great way to get some information. And we do divorce seminars actually at the very beginning of January. We do a five part series usually with lots of professionals who are part of it. And it's very useful. Oh, great. Thank you for sharing those. I'll make sure those are down in the show notes. And I thank you for your time today and being on the episode and giving all of our listeners such great advice and guidance. Thank you so much. Thank you. And listeners, we'll see you next week.