Take Back Retirement
Episode 49
What Women Need to Know About Divorce from a Forensic Accountant with Tracy Coenen
Guest Name: Tracy Coenen
Visit Website: divorcemoneyguide.com
Today, Stephanie and Kevin are joined by Tracy Coenen, a renowned forensic accountant whose work involved fraud investigations on both a corporate level and in divorces. Kevin asks if Tracy’s work is as exciting as it seems in the movies. Her work, as she says, is to find the money and is exciting in a different way.
To kick off the Take Back Retirement divorce series of episodes, Stephanie inquires why forensic accounting is important in divorces. In many cases, one spouse has a clearer understanding of the state of their finances than the other, and for the spouse who is less involved, they can miss out on a significant amount of money in the division of the marital estate. Contrary to depictions in pop culture, offshore accounts and shell companies aren’t all that common. Additional bank accounts unknown to one spouse, however, are far more likely to emerge.
A forensic accountant isn’t always entirely necessary, Tracy explains, as much can be found by an individual, as outlined in her Divorce Money Guide. She emphasizes the importance of each spouse needing to have an adequate picture of finances to ensure a fair division of assets. She notes that sometimes, like with gambling or money spent on affairs, there is potential for money to be made back. It is not just money that is to be found in these investigations, but also debts that one spouse may not be aware of.
In an individual’s pursuit of information, Tracy advises, it is important to go through legal channels, and not give a judge reason to question your behavior. Hidden income also can emerge in these investigations, which can easily be found in tax returns. Tracy shares a story of success with a client, where she found utilities being paid on a property the wife was unaware of.
Most forensic accountants bill hourly, but Tracy charges a fixed fee. They discuss their estimates of the frequency in which money is hidden from a spouse, and possible gender imbalances in whom money is being hidden from. Regardless of prospective changes in marital status, Tracy encourages less financially savvy spouses to make an effort to be more involved, and suggests how to approach your savvy spouse with questions, something she plans to address in her forthcoming Marriage Money Guide. She also recommends, as she has done, for the financially involved partner to develop contingency plans in the event they can suddenly no longer care for finances.
In part, Tracy created the Divorce Money Guide to aid those unable to afford forensic accounting.
Resources:
Please listen and share with your friends who are in the same situation!
Key Topics
- Introducing Tracy Coenen (00:51)
- Is forensic accounting exciting? (02:44)
- Why is it important in divorce? (05:35)
- Where money is found (07:33)
- The Divorce Money Guide (09:03)
- Dividing assets (11:21)
- Retrieving missing money (12:31)
- Hidden debts (13:21)
- Keeping it legal (13:45)
- Hidden income (14:54)
- Anecdotal success story (16:43)
- Paying a forensic accountant (18:12)
- Building an understanding of finances (22:32)
- Expenses in divorce (29:50)
00:06
Stephanie McCullough: Welcome to Take Back Retirement, the show for women 50 and better, facing a financial future on their own. I’m Stephanie McCullough, and along with my fellow financial planner, Kevin Gaines, we’re going to tackle the myths and mysteries of “Retirement,” so you can make wise decisions toward a sustainable financial future. Through conversations and interviews, you’ll get the information and motivation you need, to move forward with confidence. And we’ll be sure to have some fun along the way. We’re so glad you’re here. Let’s dive in. Coming to you semi-live from the beautiful Westlakes Office Park in suburban Philadelphia, this is Stephanie McCullough and Kevin Gaines of Sofia Financial and American Financial Management Group. Say hello, Kevin.
Kevin Gaines: Hello, Kevin.
Stephanie: So, today we have an exciting guest. Tracy Coenen is a renowned forensic accountant. She has a big part of her practice that digs into helping people going through divorce, where there is suspicion of hidden money, for example. But she’s also created this great resource called the Divorce Money Guide, which helps people who maybe can’t afford a forensic accountant learn how to do some of the investigations on their own. And I think she’s got some great insights about money in general money and divorce money and relationships. So, I’m really excited to dig in today. Tracy Coenen, welcome to Take Back Retirement.
01:37
Tracy Coenen: Hey, thanks for having me.
01:39
Stephanie: I’m really excited to have you because I think this is a fascinating topic that a lot of people don’t know much about. So, let’s start with the basics. What is forensic accounting?
01:49
Tracy: Quite simply, it’s doing fraud investigations in a general sense. The work that I do and have been doing for the last 25 years involves doing things like looking for fraud on the corporate level, when an executive is suspected of stealing, or manipulating financial statements and things like that. About a third of what I do is in the divorce arena, looking for missing or hidden money, or just helping people sort out what has been happening with our money so, they can get a handle on what they have. So, they know what they have to split up in the divorce. And then the other third of the work that I do is in litigation context, companies fighting over contracts gone bad, or ‘You cause me to lose money, because you did this bad thing.’ And I come in to figure out how much money was lost and things like that. So, all of that falls under that umbrella of forensic accounting. So, you could call me a fraud investigator, or you could call me an investigative accountant, anything that works.
02:44
Kevin: Is it as exciting as the movies make it seem to be? Or at least how I think it is.
02:50
Tracy: It is exciting in a different way. It’s interesting when I have college students who say, ‘Can I come shadow you for a day?’ No, thank you, you’re going to be bored to tears. A lot of it is literally sitting at my desk, digging through 1000s and 1000s of transactions, trying to find that one little piece to the puzzle that’s going to be that smoking gun. So, the exciting part is finding that smoking gun, but also, I get jazzed by the intricacy of tracing the money and you go down all these different rabbit holes, and you got to kind of keep track of where you’re on, remember to come back to that one and go down that rabbit hole. Because right now, it’s choose my own adventure, I’m going down this way. So, intellectually, it’s super interesting. But if you were to watch me for a day, you’d be bored to tears.
03:38
Kevin: I guess I’ve always been intrigued. Ever since Hal Holbrook told Robert Redford to follow the money in All the President’s Men. I’ve always gravitated towards the type of scams and criminal stuff and pop culture references. And I always found it interesting. I’m excited to be talking to you today, to somebody who actually does it.
04:01
Tracy: So, my little unofficial tagline is, ‘I find money.’ That’s a good tagline. And then, because I found that, it’s a super easy way to let people know what I do. Now, I don’t get it back for you. That’s what the attorneys are for, but I can tell you where it went.
04:13
Stephanie: And how did you come to be doing this work?
04:15
Tracy: I was a criminology major in college with the intention of becoming a prison warden. One day, that was my ultimate career goal. And my sophomore year of the criminology program, I took a special class that they only offered once every few years called financial crime investigation. I just thought, that sounds interesting. I’ll get one of my electives done. This class only comes around once every so often. And I really enjoyed it. And so, I kind of made the shift right then and there. I said, ‘I’m going to go take an accounting class and an economics class and see how I do in this stuff. And if I’m good at it, I’ll be a forensic accountant.’ Except, what was interesting was we didn’t call it a forensic accountant then. I know that forensic accountants existed because I have access to the internet and all the information in the world is there. And it tells me that forensic accountants existed 30 years ago, which was even before I was in college, we didn’t call it that then. I took some accounting classes, I was great at it, and I started to kind of change my career trajectory. And the rest is history.
05:17
Stephanie: When I think forensics, I think the evidence and the fingerprints, or the blood traces and DNA and that kind of stuff. Are there parallels in the money side?
05:27
Tracy: Well, so, forensics, you can think of as investigating. So, yes, we’re just investigating different things. Putting all the clues together.
05:35
Stephanie: And why is it important in divorce? That’s the topic we want to focus on today. It’s the topic that affects lots of our listeners. Why is this an important topic in divorce?
05:45
Tracy: Well, as you know, from working with divorcing parties, there’s very often suspicions about money. One of the biggest arguments in marriage is disagreements about money. And so, I find that especially when you get to the point of divorce, there often becomes suspicions as to what has been happening with the money. And this is especially true if you have one spouse who has been primarily or solely responsible for managing the family’s finances. But even if you don’t suspect that there has been something wrong with the money, if you just haven’t been involved, you might be sitting there saying to yourself, ‘I need to get a handle on where our money’s been going. I just want to know.’ And you don’t know where to start. Forensic accounting is a place to start with that, although it’s expensive. And so, I’m typically only brought in on the cases where there are some significant issues. And I mean significant in terms of the amount of money at stake, or the kind of scheme that might be involved, or what if one spouse is suspected of maybe some tax fraud, or some money laundering, crimes, things like that. Now, those aren’t the most typical case really, the most typical case for me is, ‘Hey, we’ve got a pretty significant marital estate that we’re dividing, but I’m thinking there may be tens of thousands of dollars missing, or hundreds of thousands, or millions of dollars missing.’ Those are the kinds of things that are more likely to be involved in.
07:14
Kevin: How often do you stumble across a Swiss bank account? Or something in Panama, or some other offshore? Or shell companies on top of shell companies? The movie plot stuff?
07:33
Tracy: It’s not that often. That’s the sexy stuff to talk about. People always want to talk about offshore bank accounts. And that’s not that common. I mean, you’re going to run into the offshore bank accounts, probably when you’ve got parties who are very wealthy, and would normally have done business overseas. Anyway, what we’re more likely to see is the Wells Fargo bank account that the wife never knew existed. A domestic bank account or the credit card that someone didn’t know about. I love telling the story of a situation where the husband and wife had a Citibank credit card, and that was their main credit card that they both had access to. And the wife wasn’t involved in looking at the bank statements on a regular basis. But we get to the point of divorce. And now we have to start looking at stuff. And there’s a payment to Citibank. That’s our credit card. She’s fine with it. Well, you look a little closer. And you see every month, there’s two payments to Citibank. Do you guys know what that means? Two cards being paid. Clever husband, he knew that if the wife saw Citibank, she wouldn’t think anything of it. Because that’s their credit card. He had a second credit card that he was using for his extracurricular activities, if you know what I mean. Yes, wink, wink, nudge, nudge.
08:55
Kevin: Nice.
08:57
Stephanie: No, not nice.
09:03
Tracy: It’s so interesting. When you talk about helping people and empowering people to do their own forensic accounting. Nobody’s going to become a forensic accountant overnight. But I want to help people know what to look for in their stuff. And people say, ‘Oh, gosh, I’m not a numbers person. This sounds too hard.’ How simple would it be for you to go through a year’s worth of bank statements and count up how many payments there were to your credit card company? Super easy. Anybody can do that.
09:31
Stephanie: And that’s what I wanted to ask you about. I know you’re on a mission to make this type of information available to more people. Can you talk a little bit more about that?
09:40
Tracy: You must be talking about the Divorce Money Guide. So, a few months ago, I was sitting in my office, thinking about my work, and the fact that there are a lot of people who don’t have access to forensic accounting because it’s too expensive. To put it in perspective, if you’re thinking you need a forensic accountant plan on plunking down $10,000 to get started. And depending on how complicated your situation is, the fees just go up from there. And that’s just not accessible to the average person. And in many, many cases, it’s not even warranted, but you have some suspicions. And I said, ‘How can I help people to give them some tools where they could, on their own, look into their finances and have a starting point to get some comfort with what’s been going on?’ And so, I came up with the idea for the Divorce Money Guide. It’s an online handbook, 10 steps, super easy, believe it or not. You don’t have to do all the steps. You don’t have to do them in order, but I walk you through the financial part of your divorce so you can understand exactly what’s going to go on. Then we talked about what documents you need, great, great checklists for you to use with all the kinds of things that you might have to get for your divorce those copies of loan documents, copies of account statements, life insurance policies, things like that. So, you don’t miss any of that. And then we get into bank statements, credit card statements and tax returns. And those are where I want people to focus if they are questioning what’s been going on with the money. And I walk them through, how do we get this stuff? How do we organize it? And what do we do with that once we have it so, that you can dig in and find some real information about what’s been happening to your money, even though you’re not an accountant or a forensic accountant?
11:21
Stephanie: That’s so, amazing. Let’s back up for a minute. Why is it important for both parties to know where the assets are, what the assets are, what the cash flow is, where the debt is, in a divorce?
11:37
Tracy: I don’t want anyone agreeing to a divorce settlement without feeling like they know everything they need to know. Now, being realistic, there are times where you might not know 100%, of that information. We might dig in, look at all this stuff. And the wife says, I still feel like there’s some stuff we don’t know, and you can get to a point in your divorce where we say, there might be something, but we’ve done a lot of work and we feel pretty comfortable with captured most of it. I want someone to be in a position of knowledge like that before they would go into any sort of divorce agreement. You can’t agree to divide assets that you don’t know about. So, we’re going to divide these bank accounts. But we don’t know if there’s another bank account out there. Well, let’s do a little work and figure that out before we make that agreement.
12:24
Stephanie: And to be explicit about it. If you’re dividing the assets, and some of the assets aren’t on the table, you could get shortchanged.
12:31
Tracy: Or the other piece is if your spouse has been wasting money on an affair are gambling on electronics or other toys that you didn’t know about anything that they could have been wasting money on, we want to know what the totality of that is. And in because let’s say your husband wasted $50,000 on an affair over the last year, hey, half of that was your money. And when we are settling this divorce, we want to get a credit back for that half. I always say to clients, if there is money missing, do you have a way of getting that money back? Somebody gambled it all away. How are we going to get it back? Well, maybe there’s a retirement account that we’re splitting, you can potentially get a little more of that retirement account to make up for what was wasted out of your bank account.
13:19
Stephanie: Got it.
13:21
Kevin: Now, we talked about assets. But what about hidden debts? Does it make sense to do something as simple as checking your own credit report to see if there’s something on there that your name got assigned to?
13:35
Tracy: Well, Kevin, it’s almost as if you’ve read and worked through the Divorce Money Guide about getting credit reports so that you know what’s out there. Now, here’s the important thing. We want you to get divorced, not arrested. So, legally, you can only get your own credit report. To get your spouse’s credit report, you need their permission. And I know some attorneys, some people say screw it, go get your spouse’s credit report, just do what you need to. My advice is always don’t do that. You don’t want to ever have a chance that you’re going to look bad in front of the divorce judge, there is a legal way to get your spouse’s credit report through the divorce process if they won’t agree to let you do it. So, yes, go get your own credit report. That will give you most of what you’re looking for because spouse’s credit is tied together and there are accounts, if they have your name on them, they’re for sure going to show up on your credit report. Sometimes their accounts that might not have your name on, that will still show up on your credit report because your credit is tied together so closely. But yeah, we want to know what debts you might be on the hook for.
14:42
Kevin: And to that point, tax returns. If you don’t have your tax returns. Can you just reach out to the IRS and say can I get copies of my previous tax returns or anything like that?
14:54
Tracy: Absolutely. So, you can go online and get tax returns from the IRS. So, I have a couple of tutorial videos that walk you through exactly how you do it step by step. So, I do a screen share. I show you how you sign up for a username and password, but you have to get verified so they know what’s really you. So, there’s a video walking you through exactly how to do that, click here, click here. And then I walk you through another screen share on the IRS website of exactly where you’re going to go and what you’re going to click on and the things you’re going to download. And so, I recommend to people, everything that the IRS has on that website available to you, I’m going to suggest that you go ahead and download it, we may not end up using it in your case, but at least you have it.
15:37
Stephanie: And then talk to us about income. Do you ever see cases where there’s hidden income?
15:42
Tracy: Sure, if someone has, for example, an investment account that you never knew about. Yeah, there might be dividends and interest from that. And so, I talk in the Divorce Money Guide show you were on your income tax return to look for some evidence of that to see if we could find if there’s any accounts we didn’t know about, the side job where someone is getting paid cash, that’s hard to uncover. That’s kind of the most common thing that I would see. Because if someone has a second job where they’re getting a paycheck, that’s going to show itself on the tax return somehow. It’s going to show up there. So, it’s not necessarily that I see so much hidden income as I see the income that the spouse just didn’t know about because they weren’t looking at the tax returns or something like that.
16:33
Stephanie: Can you share with us a couple of interesting stories of ways you were able to help clients, through your investigative techniques get a better outcome?
16:43
Tracy: So, let me just give you one, I’ve got one that’s coming up to the top of my head. So, we were going through doing the whole forensic accounting, trying to see where money was spent, because she was worried that her husband was having an affair and spending money on that. And everything was looking pretty normal. And they were in Illinois. I found a check to a utility company in Arizona. And I said to her, ‘What is this for?’ And what I was expecting to hear is something typical in the cases that I work on, which might be, ‘We paid my in-laws’ bills for a month’ or something or there’s some situation where ‘We just paid someone else’s some family member’s bill for whatever reason.’ And she said, ‘No, I have no idea what that is. I don’t recognize that.’ As it turned out, her husband had purchased a condo that he called a rental property in Arizona. Now, once that property was uncovered, I wasn’t involved further to find out the details of the property. But let’s just say I don’t believe it was truly a rental property.
17:55
Stephanie: Not for investment income?
17:57
Tracy: No. I believe it was for extracurricular activities.
18:00
Stephanie: Yes, yes.
18:03
Tracy: So, there was a very valuable asset that she now had half of, that she wouldn’t have known about otherwise.
18:12
Kevin: How does a financial auditor, forensic accountant, anybody that you know, somebody would hire to uncover the stuff? How do you typically how do you guys get paid? You made a reference to the amount, but is it typically an hourly situation? Or is it a lump sum? Or do you get a percentage of what’s found?
18:35
Tracy: Oh, gosh, we never get a percentage of what’s found because that would taint our results. It would give me an incentive to potentially be dishonest and what I find so we would never want to do that. The vast majority of people in my industry bill hourly, I do not, I bill fixed fee only. And I’ve been doing that for 22 years. I love the fixed fee model. Because number one, I don’t want to get paid for my time, I want to get paid for what I know. And number two, I don’t like keeping track of my time, I don’t want to send you a bill for .1 hours to look at an email or respond to an email. It’s just an administrative nightmare. Nobody feels good when they get those bills and have to pay them and see how much time I spent on various things. So, for me, I love doing a fixed fee. So, the client sends me their financial documents, we talk about what needs to be done, I come up with a case plan for how I’m going to investigate it. And then I’m able to tell them here’s exactly what it’s going to cost you for me to do the investigation and issue you a report on my findings.
19:45
Stephanie: And then I liked that too, because then the client maybe doesn’t feel as hesitant to reach out to you with questions or other issues because they’re like, ‘Oh, I’m on the clock. It’s gonna cost me this much money every time I pick up the phone to talk to Tracy.’
19:56
Tracy: And I also, think that they appreciate having certainty. So, if you’re in a situation where someone’s charging you hourly, what I often see is, well, we think this will cost around $12,000. And then the client gets a bill for $15,000. Well, they didn’t expect that. Yeah, sorry, there was an overage. I just don’t feel that’s fair to clients. I’d rather have it be all upfront, and they know exactly what it’s going to cost.
20:25
Stephanie: How often do you think people are out there trying to hide financial resources from their spouses?
20:32
Tracy: That’s a good question. I was going to say, well, by the time clients get to me, they’re pretty certain something has gone wrong. So, what I see is not a representative sample. Well, I don’t know. It’s hard to guess. 25% in divorces? I don’t know.
20:53
Stephanie: I mean, I’ve definitely heard stories. My friend’s mother, who, a lot of the money was gone by the time they were at the divorce table, because it went to the mistress slash secretary person that she didn’t know about for years.
21:08
Tracy: It’s paying someone’s rent for years, right?
21:11
Stephanie: And as the person in my household who does the finances right, I know that my husband has no idea. With all the different bills each month, I know that it’s often the other way around, that the male in a heterosexual couple is the one taking care of the money. And there’s a lot of implied trust there.
21:31
Kevin: For sure, let me make possibly a failed attempt to defend my gender. How often is it the dude doing the bad stuff, as opposed to the wife?
21:49
Tracy: But here’s what I think. I think there’s equal likelihood for doing the bad things between the genders. However, what we still see more often is the men being in control of the finances and the household. Because as much progress as we’ve made, more often the men are the major breadwinners, and along with that, many times control over the finances in the house. And so, because of those gender roles, I see women being taken advantage of more often, but I think if you strictly looked at who’s more likely to commit money, shenanigans, I think it’s equal.
22:28
Kevin: So, in other words, the more involved you are in your household finances, even if you’re not the primary bill payer, for example, you might be able to catch some of this stuff sooner or even prevent it from happening. Just been involved and having some knowledge of what’s going on.
22:53
Tracy: You’re right. And that’s why I am currently putting together the Marriage Money Guide to instruct women, this one is just for women, because I don’t think guys are going to buy it to instruct women on what their options are with the finances as they’re going into marriage. You could set things up where you each keep your money separate; you could pull your money together, you could sort of do a hybrid, but I want to walk them through what the pros and the cons are, how you can jointly manage things, and how you can look out for yourself. So, you can keep an eye on things no matter what you decide.
23:32
Stephanie: Oh, I love this. Because, you know, I so, often have people asking, and it’s completely normal to have a division of labor in a couple. My husband does the lawn and the outside stuff, I take care of the food, like that’s natural. And with the money stuff, it just feels so, fraught, and there’s so many potential minefields, but women asked me, ‘I’m 20 years into a marriage, 30 years in, how do I start now having those conversations without having my spouse think that I’m questioning his ability or trustworthiness? How do I start to be involved in the money stuff?’
24:08
Tracy: Right, well, one great place or great technique that I’ve suggested to clients, or, I suppose not clients, because they’re still staying married, but is to have a conversation like this. ‘I’m concerned, what would happen if you passed away? And I feel like I don’t know enough about our money situation.’ I want to know, before we’re in a crisis situation, or even not even pass away, what if the husband has been responsible for all the money and has a serious illness and is in a coma? The last thing the wife needs is to try to have to figure out how do I get into our bank accounts online? Where do I find this? I don’t even know how much money we have to go grocery shopping. And so, that’s a really non-confrontational way to have the conversation. Like I’m concerned what if something happens to you that I just don’t know what’s been going on? Could you show me where our money is? Could you show me how to get into these accounts?
25:04
Stephanie: I love that. And then I like that you portray different options of arranging your finances as a couple too, right? Because some people think you absolutely have to mingle all your money and have a joint account or no, there’s no way I’m ever mingling my money, I have to always have separate dollars. And to each their own, I think you just have to work something out that’s good for everybody.
25:24
Tracy: So, there’s a stigma with no matter what you choose, there will be people who criticize it. And for each of the ways that you could do it, there are pros and cons, none of the methods is perfect. So, I walked through what those pros and cons are. And then here’s how I recommend you set it up. And then here’s what I recommend you do on an ongoing basis to keep tabs on things. Because even if like, you know, some people say, ‘Well, we’re going to keep our money completely separate. And so, this is great, because I’ll always have some money.; Okay, here’s the drawback to that. What if he is wasting all his money, saving none of it, paycheck to paycheck, and you guys were supposed to be saving for a house that you were each going to put money in for? Well, that ain’t happening. Or what happens if you saved a bunch of money from your funds from your income and now you guys are getting divorced, that money that you saved isn’t going to only be designated for you most likely that money will need to get divided in the divorce. So, keeping that money completely separate does have some advantages, but it sure has some disadvantages as well. So, you still have to keep tabs on things.
26:32
Stephanie: So, anything going eyes wide open is beneficial. But if nobody talks to you about this stuff. We’re not in a society where people talk about money or teach us about money. So, I think this Marriage Money Guide is a great resource.
26:44
Tracy: It’s going to be so, later this year, late November, early December, it’s gonna be out.
26:49
Kevin: Well, I have a suggestion for a follow-up, maybe no more than a pamphlet. But I’ve actually had conversations with male clients. And this applies to my personal situation as well. I’ve tried to get my spouse interested in this stuff. She has no idea she has no desire to know this. If I get hit by the bus, her plan is to call Stephanie.
27:13
Stephanie: And I’ll be happy to talk to her.
27:14
Kevin: Yes, you will. But I don’t know where your banks are. Well, that’s why we’d have to actually hire Tracy to figure out where I put everything. Because she doesn’t know when you don’t know everyone’s part.
27:27
Tracy: You probably already thought about this. But I have a document, a lengthy document that I’ve put together that says where all the bank accounts are, what bills are auto-pay, what needs to be shut off, close this down, after I pass away, call this person. So, for my business, there is a person to call who has agreed to transition all of my client work. And that will be either taking over the cases, or helping facilitate getting materials back to the client so they can choose whoever they want. And so, that’s sort of my failsafe.
28:02
Stephanie: So, you’ve done the contingency planning, that’s a good thing.
28:05
Kevin: And also, on that list, even though it’s not pertinent to this conversation, don’t forget to put down the different accounts where you got usernames and passwords that you would need to get into. Because that’s actually a growing trend that most websites will not let the spouse get in the event of a death. So, I like the idea of having that list of a resource for the surviving spouse to be able to go to know what to do everything with. But there’s a lot more to that list than there was 20, 30 years ago, that’s for sure.
28:39
Tracy: So, I’ve got a password manager. And there’s the master super, super secret password on that. And so, my document, which is under lock and key gives the master password right along with the security code to my phone, because double factor authentication, they need to be able to receive the code to my phone. So, yeah, got all that setup.
29:02
Stephanie: Uff. That’s a lot of work, and easily-postponed type of work. Important but not urgent.
29:10
Kevin: And unfortunately, it tends to get postponed until it’s too late.
29:13
Stephanie: So, Tracy, we’ve been talking about situations where one spouse doesn’t know what’s going on, maybe their suspicions. Maybe there’s malfeasance. How is all that different from financial abuse?
29:28
Tracy: I think it’s all ties together really. When I think about financial abuse, I do think about hiding things, hiding money, hiding information. And then also, I think that it steps up a level at times where that financial abuse includes preventing the spouse from having access to money or using money as a weapon.
29:50
Stephanie: And then that’s a whole nother level of needing assistance. So, Tracy, one of the issues that a lot of women come up against is, maybe they’re in a marriage that they would like to get out of, but divorce is expensive. How can this resource that you’ve created, the Divorce Money Guide, how can it actually save people money?
30:12
Tracy: Well, you’re right, divorce is so expensive, and your biggest expense is going to be your divorce attorneys fees. You’re gonna put down your deposit, which you’re probably going to have to keep replenishing. A lot of people think when they put down that first deposit that’s going to carry them all the way through the divorce, and many times it does not. And so, one of the things I wanted to do with the Divorce Money Guide, is have consumers be able to use it to hopefully cut down on some of the divorce attorney’s fees. So, in many of the divorces, the attorney will help gather bank statements and organize them, help gather tax returns, and there’ll be this interactive process back and forth, where the divorce attorney’s saying get this for me and send it to me, and I’ll look at it and see if it’s what you need, and blah, blah, blah, and then ask you for more. We can short circuit that by having the person who’s getting divorced, get their own statements. So, the Divorce Money Guide walks you through exactly how to get your bank statements, your credit card statements, your income tax returns, your income tax information from the IRS. So, you could put that all together easily, save two to five hours of your divorce attorney’s time, if not more, and think about, the average divorce attorney charges $300 to $350 an hour, that’s some pretty significant savings there. And remember, your divorce attorney charges you for everything they do on your behalf. So, that email where you wrote to your divorce attorney saying remind me again, how far do I need to go back and then your divorce attorney responds to that, we’ll go back three years and make sure you get this, this and this, you’ve probably just been charged for a 10th of an hour $30, $35 for that. Okay, maybe that doesn’t sound like a lot as we sit here. But when you get that first bill and see every one of those entries adding up. You could save literally hundreds to thousands of dollars by getting your own financial documents and not having that dialogue with your divorce attorney about it as you’re going through and getting them.
32:06
Stephanie: Oh, I’ve heard Philadelphia divorce attorneys charging 500 an hour for sure.
32:10
Tracy: Oh, yeah, easily. I had to come up with what’s an average around the country. And certainly, there are lower-cost areas where you might find a divorce attorney, maybe $150 to $250 an hour, if you’ve got that you’re lucky. Because in the bigger cities, when I was saying, $300 to$350 an hour as an average, they were laughing, They were like, ‘I wish.’
32:33
Stephanie: Remember the divorce lawyers, they went to law school, they didn’t go to business school, they’re not necessarily trained in the financial stuff.
32:40
Tracy: Well, and it was so interesting, as I had the concept for the Divorce Money Guide, and I was talking with divorce attorneys asking them, ‘What do you think about this concept?’ Because there was nothing out there like it, nothing. And I’m saying to them, ‘I think one of the selling points will be the ability to save some legal fees by dealing with these financial documents.’ But how do you feel about that? I don’t want to take food off your table. And every single one of the 20 divorce attorneys that I talked to about this said, ‘Oh my God, please, we don’t want to have anything to do with the bank statements and getting them the tax returns if we don’t have to. We would love it if our client came to us with all of that information ready and just handed it to us. And we didn’t have to fool around with it.’ So, it certainly was a desired thing on the part of the divorce lawyers.
33:29
Stephanie: That’s fascinating. So, don’t feel guilty people, your divorce attorney will still be able to make their mortgage payment.
33:33
Tracy: They want to spend their time lawyering not messing with financial documents.
33:40
Kevin: So, as much as you don’t like to track a 10th of an hour, some of these lawyers may not be all that excited as well.
33:49
Tracy: Who wants to bill their client for that email? But you have to or before you know it, you could spend all day doing quick emails to clients and never billing anything? And then how do you make a living?
34:03
Stephanie: So, I know in the Divorce Money Guide, you’ve got 10 core steps for finding the money, and you’ve shared a couple of them with us. Are there any other things you’d like to kind of just give a little preview of?
34:13
Tracy: There’s one great step towards the end where we talk about some issues that don’t occur for everyone, but they come up often enough like stock options. If your spouse is an upper-level executive at a company, then you might have some special forms of compensation like stock options, they might have some special perks like a company car that’s used for personal purposes. And so, we talk about things like that. So, if you have some special situations, there is a step just for you to know what to do about those types of things.
34:45
Stephanie: That’s excellent. And Tracy how can people find the Divorce Money Guide and you?
34:50
Tracy: They can find me on Instagram, my handle there is @divorcemoneyguide or they can find me at divorcemoneyguide.com That’s where they can get into the Divorce Money Guide, one of the things we can talk about is exactly what it is. It is videos, written materials, worksheets, checklists. And so, one of the things that was really important to me was that no matter your learning style, that you could have something there that works for you. So, if you’d like to read the written materials like chapters of books, you could do that. If you don’t care to read, you can go through the video guides. And so, it’s me walking through the materials, telling you exactly what to do, or if you’d like to do both, because that’s what I would do, I would have the written materials in front of me along with the video and I do it side by side. But super accessible, super easy. You can do any of the steps, you can do a couple of steps, in any order you want to do them.
35:43
Stephanie: That’s awesome. So, really a multimedia thing.
35:45
Tracy: Yes, ma’am.
35:47
Kevin: Real quick, is that what the coupon code is going to go for, the Divorce Money Guide? So, Tracy, I’m notoriously cheap. And this sounds like a really good idea. But is there any way I can get the divorce money guide a little bit cheaper?
36:04
Tracy: You can get it a little cheaper. So, here’s the deal. The divorce money guide is $697. So, if you save a couple of hours of your divorce attorney’s time, it’s paid for itself. So, I feel like that’s pretty exciting. It makes it pretty accessible to a lot of people. However, listeners of your podcast wait, there’s more. Can get $100 off with the coupon code. Takeback. All one word. Or takebackretirement also.
36:31
Stephanie: That’s so, generous of you. Thank you so, much, Tracy.
36:33
Tracy: You’re welcome.
36:34
Stephanie: All right. So, divorcemoneyguide.com, @divorcemoneyguide on Instagram. Give Tracy a follow. And thank you again for being with us today.
36:42
Tracy: Thanks for having me. It was so fun talking to you about all the money shenanigans that I see in my daily job.
36:50
Stephanie: And we are appreciative that you are willing to sift through all the mountains of data to find those nuggets of gold or smoking guns.
36:57
Tracy: Well, and I appreciate that you’re doing this divorce series because there is a lot of help needed out there. You know, divorce is a stressful, expensive process. And to the extent that we can make it just a little bit easier for people really makes me proud and happy.
37:13
Stephanie: That’s awesome. Yeah, for most people, it’s the first time they’re going through it right? I think the more information we can get out there, the better.
37:21
Kevin: And when the Marriage Money Guide comes out, we have to have you come back on and talk about that.
37:26
Tracy: I would love to. That’ll be exciting.
37:28
Stephanie: Awesome. All right. Thanks, Tracy we’ll see you later.
37:31
Tracy: Thanks for having me.
37:37
Stephanie: Well, Tracy is obviously very passionate about what she does. And I love talking to her and hearing some of her stories. But you know, my biggest kind of aha, from what she was saying is that a lot of this stuff is accessible. I love that she walks through how simple it is. Get your copies of your tax return, they can tell you a lot. It looks like gobbledygook to us, but she’s going to walk you through what you can actually see they’re getting the bank statements. Again, that might feel like a lot, but kind of it’s just logistics, and tracking down the bank statements. That’s not necessarily fun. And you might think I don’t know how to do this, but it’s not really hard once you get right down to it.
38:20
Kevin: On that note, also, tracking down these little things, you might be able to identify some problems earlier on, such as looking at your credit report once a year. I mean, we should be doing that anyway. But if your spouse is accumulating debts, and your name happens to be on those debts, your credit report is going to be screaming from the mountaintops, ‘Hey, look at us right here.’ And that might allow you to, like I said, maybe head off a few of these issues or confront them when they’re smaller, at least.
38:55
Stephanie: We’ve all heard some of the nightmare stories. And I imagine some of our listeners have heard them, hopefully not lived through them themselves. But people who are blindsided when the time comes time for a divorce by stuff that’s been going on the money shenanigans, as she called it. I think there’s an excellent place for the professional forensic accountant, but I have talked to women who have said, ‘I can’t afford to hire someone to do that.’ So, I do appreciate that she’s created the Divorce Money Guide and she’s given us a coupon for $100 off so, coupon takeback.
39:32
Kevin: I love the coupon. I have no problem with it. Yes, I am proud of it. Yet another reason to pity my wife.
39:45
Stephanie: We wanted to do this series on divorce because it’s just such a common topic and because it is intimidating, complicated, complex. So, hopefully this conversation with Tracy has helped to shed a little bit more light on other aspects of that.
40:00
Kevin: And let’s go with one other thing. There’s a recurring theme of awareness. The more you know, you don’t have to be involved day to day, but just the more you know, is going to make you feel more confident as you’re going through this process. And if you’re feeling more confident, you’re not going to have all these nagging doubts, insecurities, sleepless nights, you’re probably still going to have some, but it won’t be as many. And anything you can do to lower the stress level is going to allow you to get through this process faster and less scathed.
40:41
Stephanie: And for those of you not even considering divorce, her point of how to bring up the conversation to try to get more involved and increase your own awareness of the finances. I like that. We’re getting to the point where we have to acknowledge our mortality. It’s an age thing. It’s a COVID thing. And my parents are in their 80s, we all know that nobody lasts forever. So, saying to one spouse who might be the family CFO, ‘Hey, if at some point, you’re not around to do this, I don’t want to be going from zero to 60.’ I’d like to have some awareness and some information on how it all works. So, can we start those conversations today?
41:19
Kevin: Yeah, not all marriages end with divorce lawyers. Sadly, these will end with estate lawyers as well.
41:27
Stephanie: All right. Well, thanks so, much for being with us. We’ll talk to you next time. It’s goodbye from me.
41:32
Kevin: And it’s goodbye from her.
41:36
Stephanie: Be sure to subscribe to the show and please share it with your friends. Show notes and more information available at takebackretirement.com. Huge thanks for the original music by the one and only, Raymond Loewy through New Math in New York. See you next time.
41:51
Disclaimer: Investment advice offered through Private Advisor Group, LLC, a registered investment advisor. Private Advisor Group, American Financial Management Group, and Sofia Financial are separate entities. The opinions voiced in this material, are for general information only and are not intended to provide specific advice, or recommendations for any individual security. To determine which investments may be appropriate for you, consult your financial advisor, prior to investing. This information is not intended to be substitute for individualized tax advice. Please consult your tax advisor regarding your specific situation.
