Jessica: When you hear people talk about planning and preparing for divorce, do you get scared when they start getting into financial plans? And do you wonder where to even start in order to plan for your future? Well, we know how important the money aspect can be, as well as how comforting it is being led by a women-owned and operated financial firm. That’s exactly what and who we’re talking about in today’s episode of the Divorce etc… podcast. We’re the exEXPERTS, Jessica and T.H. We focus on helping you navigate your divorce and successfully move on with your life. Please follow us on all social media at exEXPERTS, and check out www.exexperts.com for tons of free divorce related resources. Let’s bring in today’s guest.

Lisa: Hello, how are you?  

T.H.: Hey everybody, we have Lisa Crosta here with us. She is the Director of Wealth Management at BPP Wealth Solutions. She is both a CPA and a CFP certified financial planner, and a recent sponsor of the Divorce etc… podcast. We are really going to talk about financial plans—how do I plan for my future, my financial future—with Lisa, and she’s going to give us some great tips today. Welcome to our show.

Lisa: Thank you for having me.

Jessica: I feel one of the great things for our audience, honestly, is the fact that it’s a women-owned and operated financial firm, which I feel unfortunately isn’t the norm. 

T.H.: It’s a little less scary that way.

Jessica: Yeah. But was that a very conscious decision that everybody there was going to be women and females for your targeted target audience?

Lisa: No, I mean, our founder’s female. I haven’t been around her the whole time, but she’s always hired more women. But it just worked that way. At one point, we needed one more position, and we interviewed all different people, and the woman was a better fit. We were like, “Okay, well, this works perfectly.”  

T.H.: I think it’s less intimidating, especially for women who just aren’t well versed in money and investing, and that wasn’t their role or their job in their marriage or their relationship. Look, women could be equally intimidating to some. But for me, having my ex always manage the investing and stuff like that, I would just default to him. Then that would hurt me because then I just didn’t learn. There’s nothing wrong with having those roles in your marriage. But when your marriage is over, you’re going to have to learn, and so back to women being less intimidating in my mind.

Lisa: Yeah.

Jessica: Lisa, for your divorce clients, of which I know you have many, give us an idea of what are some of the main questions, most common issues and fears that they come in talking to you about?

Lisa: I mean, I’d say number one is how much do I need? How much do I need on a month to month basis to survive? We’ve seen it from both sides, from women who are going to receive child support and alimony, and women that are going to have to pay. Both cases, they’re trying to figure out what number makes sense for them. Some cases, one woman recently, she was a little bit older, and she didn’t want any support. She just needed a piece of the assets. She wanted to make sure that if she got her 50% of the assets, that she could walk away clean. Her kids were fully grown; she wanted to know she could do it. We were able to run the numbers for her and go through it. But it happens from all different angles. You need to know your numbers. You just can’t guess.

Jessica: So talk to us about that.

T.H.: But what constitutes the numbers?

Jessica: Yeah.

T.H.: What are the numbers?

Lisa: So when we do a plan, and this is whether you’re getting divorced or not, but our financial plans start with the cash flow. It’s nitty gritty basics. It’s everything that comes in. So if you have a W-2 job, a regular job, maybe you have a side hustle, maybe you have some rental income, are you going to get child support or alimony, all the inflows, everything that’s on the plus side, and then what’s going to go out. With the divorce, we’re more projecting. With someone who’s already divorced, we’re talking about today’s world. So, well, what are you going to spend? Is it mortgage or rent, property taxes, insurance, food, groceries, hair? It’s so funny when sometimes people give me a number, I’m like, “Wait, don’t you get your hair done a few times a year?”

Jessica: That’s right.

Lisa: “Did you forget the clothing budget?” They’re like, “Oh, I didn’t think you needed that.” I’m like, “You can lump a lot of things together. I’m not here to judge. I don’t need to see everything. But I need you to think of everything, and then put it in categories for me.” It’s just funny the things people leave out. They’re like, “Oh, yeah, I have to do that,” or the dentist or getting your car fixed. It’s an exercise that I know isn’t the most fun, but I’ve never had somebody come to me and say, “What a waste of time.” Because it is eye opening to see the way you spend money. I want to say this again, we’re not here to judge. I’m not of the ilk—you read these in books—where it says, “Don’t get your coffee each day and you could be a millionaire.” No, we’re not going down that route. I’m going to get my coffee every day because I want it. If you can fit it in your budget, it’s fine. But we want to look at your inflows and your outflows, and where does that get you at the end of each month? That’s what you plan from. That’s where you start.

Jessica: When you talk about a financial plan, is that it in essence, it’s just knowing your inflows and outflows? Or is there more to it than that?  

Lisa: That’s the start. That’s the start. If you ever did one of these quick and dirty ones on a lot of the websites, they’ll ask you like two numbers, and it’ll be like, “How much have you saved?” They’re like, “Okay, you’re great,” or “You’re not great.” Ours is a little bit more detailed than that. Once we get all the numbers coming in, all the numbers going out, then we’re going to look at a long term plan. All our clients live to age 95, so that’s what we plan to.

Jessica: At least. 

Lisa: Right, at least. But in general, we’re going to make changes. The plan will help us make changes over the years. We’ll put inflation in. We may put changes, like in five years—not changes, additions. Five years, I have a child going to college, or five years, I want to do this big trip, or every three years, I buy a new car. I mean, it’s endless the iterations that people want us to put in the plan for them. When this cash flow is all put together, we then look at how does the end number, and really, the end of the year, affects your assets. Are you adding to your assets? Or are you taking away from them? Again, there’s no right answer, it depends where you are. If you’re 40, I really hope you’re adding to your assets. Are you adding them to the point that when you want to retire, it looks like there’s going to be enough? Because we know about what you spend, and we can adjust it for retirement, we can raise medical, we can raise travel and cut down commuting, and that’s how detailed we can get. If you’re 70 or 65, and you’re taking from them—okay, are they going to last for your whole lifetime? Those are just two—that’s just the goal of retirement, right? You know in life there’s a lot more goals than just retirement, we hope. So along the way, we may have college expenses in there. Then the kids taking the money to go to college, or a second home, a new car, a great trip, a downsize—all these things, we’re going to look at them and how they’re affecting over time with your portfolio assets. Can you afford to do what you want to do and live the life that you want to do? All of it may work, and the client may say, “But you know what? My dream is to retire five years early.” So, okay, let’s put five years early in. Let’s look. Okay, you’re about this short. So what can you do? We can play around with it. Well, if you get a $25,000 bonus, and you can make more every year and you can raise your commissions, or whatever it may be, we literally put the numbers in and go, “Okay, it looks like if you try to make $25,000 more a year, you can retire three years early.” I’m making up these scenarios, but we tie it all together. The cash flow is the foundation, but then we tie it into all your assets to see if you’re getting to where you want to be, whatever that may be.

T.H.: Then you guys also help people with the investing side of it. We’ve spoken with a bunch of different financial advisors, CDFAs. One of them talks about, what was it, a 50/30/20 breakout: the things you need, the things you want, and then this much for investing, because a lot of women are afraid to invest. It’s higher risk, and I don’t want to just lose my money overnight. So what’s your feeling about investing?

Lisa: Well, when we say when we turn and we go to the assets—that’s the whole investment side. I mean, that’s just as big a conversation as getting to the cash flow. We’ve got that figured out, and now we say, “Okay, you’ve got this much saved. If you continue to—let’s just make this up—contribute to your 401(k), your IRA consistently each year, you’re going to get to X amount of number,” assuming we do very conservative rates of return. But how are we going to get you there? You’re not going to get there by leaving your money under the mattress or in the bank. We do work with portfolio managers. We don’t do the individual investing. This is where being a CFA, a chartered financial analyst, the ones who do the real studying of the stocks, is its own specialty. We don’t pretend to be able to do that. I mean, a lot of people do, but it’s so time consuming. I want to spend my time with you, and then go to the professionals. We have stock portfolios, and we have exchange traded fund portfolios. There are all different ones, and we will work with you to figure out the best place to put your money to achieve your goals. It’ll change surely over the years, but we really try to educate you on why we want you to get out of the bank, and show you numbers over time. We’re always reviewing performance. I mean last year was actually a great year because—to illustrate, not a great year for returns. It was a terrible year for returns. But our plans are live. There is software that’s linked live to all their accounts. When I would go to do a review with a client, I’d pull it up and they’re like, “Well, what about the down market?” I’m like, “This reflects the down market. It’s live. It’s yesterday’s numbers.”

Jessica: Awesome.

Lisa: We can even model in more downturns. But it’s live, and you can always see what’s going on. We try to keep our clients—I mean, I want to say none of our clients—and maybe it’s one—sold during 2022. We did not have the crazy calls—I don’t mean crazy—the panicked calls—

Jessica: You’re doing a good job educating your clients if they’re not calling you panicked to dump out of the market.

Lisa: They can see the plan. They can see it works. They know it’s a long term thing. We really, I think, got way less than the number of calls that other people were getting.

T.H.: Something else you really need to think about when you’re getting a divorce and you’re working with somebody like you is, when does your support end? When does your alimony end? Because I know for me that was a huge amount of my income. I was living large. Then all of a sudden, I was like, “Holy crap, this is ending, I think, in three months. I’m going to sell the house. I’m going to get out.” And it all worked out because the market was really high for me to sell my house, so I sold it at a great price.

Lisa: Yeah.

T.H.: I probably could have gotten a little more if I sold it now. But anyway—

Lisa: Right, hindsight is 20/20. 

T.H.: I did great and all of that, but that’s something that you have to consider when you’re creating a financial plan. Your support lasts you five years, and then it’s gone. The purpose of support, especially based on the interviews we’ve done, it’s just to get you on your feet.

Lisa: Yep.

T.H.: It’s not necessarily to keep you in the lifestyle to which you’ve become accustomed for the rest of your life. That is a myth. We’re telling you that right now. That’s a really big thing to think about, especially if you’re in the process of negotiating your maintenance support, whatever they call it now. We are going to pause quickly for a minute. Because we know it’s hard to get honest and reliable information about your divorce and life in general, so we’ve done the work for you with exEXPERTS and our Divorce etc… podcast. Jess and I had one another to ask all of the questions and figure out the answers, and now you have us too. We are your no bullshit, no nonsense girlfriends through divorce and beyond. Ask us anything about life and all that comes with it. Be sure to subscribe to our weekly newsletter to get exEXPERTS in your inbox and find out all the updates on the latest Divorce etc… podcasts and our upcoming events. Don’t miss out on information and tips you really need to know going through your divorce and beyond. And if you want some one on one time with us girls—see, we can laugh—you can sign up for a private session. We know that the work really begins when the divorce is over. You can connect with us and get all this information at www.exexperts.com. We’ve lived it, so we get it.

Jessica: All right, Lisa, the cash flow for sure, a huge part of it. But a lot of times, in particular women, when they’re getting divorced, have no idea what their assets are. They don’t know what it means. They don’t know where to look. They don’t know where to find them. They don’t understand that the idea of 50/50 is great, but sometimes that’s not what the equation that’s better for you because there may be other types of debt, or other types of things that like are better to negotiate. Talk us through some of that.

Lisa: Yeah, well, first place, how do you find it?

Jessica: Yeah.

Lisa: I did a workshop recently with women, just for women about legal and financial security. Even though people didn’t love to hear it, the best place to look is your tax return. It has a treasure trove of information. A CPA, anybody like me could tell you where to point. You can find out where—unless they’re hidden overseas, then it’s against the law, and it’s not in your tax return. Then you need a forensic accountant. But if everybody’s aboveboard, every account you have that generates any income, interest, capital gains, any movement is on that tax return, you can find it by knowing what schedules to look at. I mean, I don’t think you want me to get into all that detail. But I’d be happy to show someone. 

T.H.: But that’s why we want to work with you because we don’t understand the tax return. We sign, we date—

Jessica: Someone’s going to bring you this hundred page document, where do I go?

T.H.: Right.

Lisa: And it’s not nearly as scary as it seems. It used to be laid out better, but it’s still okay. There’s method to the madness. If somebody shows you it, you can figure out where to look. I mean, you don’t have to look at all 900 pages. If your spouse has a business, it’s much easier to hide some of that, depending on what type of business it is: a partnership, an LLC. It gets to the nuances. But the bank accounts, the retirement accounts, all that, the tax return is the first place to start looking. Those are the questions we would ask. Where does he work? Does he have a 401(k)? The IRAs, maybe there’s old IRAs? Those you can find. Again, banks, brokerage accounts, that’s the starting point. The businesses get into a lot more. That’s sometimes, and I’m sure you know people who’ve had to hire forensic accountants—

Jessica: Sure.

Lisa: —it’s much easier to hide income. But you know there’s K-1s. They cut anything they own, they get a K-1 for it or other partnerships documents. It is the place to start. You can get your own tax return. You don’t need your spouse’s approval to get your tax return from the IRS.

Jessica: Unless for whatever reason, unless you filed married separately or something.

Lisa: Yes.

Jessica: Right, but assuming you have filed joint tax returns, it’s something that you absolutely have every right to. I know sometimes women are afraid that if they call their accountant, since maybe the husband was the one who really had all the interactions with the accountant, they’re worried like, “Well, if I call the accountant and I ask for a tax return, the accountant may say to my husband, ‘Hey, by the way, did you know that she called me asking for the tax return?’” All of those things are kind of scary. But you guys, for everyone who’s listening, at a certain point, you just got to do it. I mean, you’re going to be better off waiting to figure out how or when is the right time. You just got to go and do it and be prepared for whatever the outcome of that is going to be. But at least then you’ll have the tax return, you know?

T.H.: We did an episode about preparing for your taxes when you’re going through a divorce. You guys might want to check out Divorce etc… for that episode, because it was really important. We made a point of interviewing the managing partner of this huge accounting firm to get the details, because they’re things you would never know to ask, because we’re not accountants.

Lisa: Yeah.

Lisa: And there are questions I’ve definitely said to clients, and they’re like, “Huh, I didn’t think of that.” And if you have a violent—

T.H.: But it’s okay, everybody. It’s okay not to know.

Lisa: Right, you don’t know what to ask.

T.H.: That wasn’t your job. That’s not your—

Jessica: That’s exactly right.

Lisa: Yeah.

T.H.: But it’s important that you learn. That’s why we’re talking about that.

Lisa: I know we’re talking about divorce, but I think the percentage is, and it sounds horrible, but I think it’s 84% of women die alone because men tend to die first. Even if you’re in a good marriage and everything’s fine, we are going to be alone at one point, statistically speaking. You got to learn this. You got to learn—

Jessica: That’s right. That’s right. You have to be prepared for any kind of outcome in life for sure. Alright, you’re talking to us, and you’re telling everyone that the best place to look is the tax returns because that will be an indicator of any accounts that you have or anything for assets. And so what then? Now you’ve identified what your assets may be, these different kinds of accounts, or anything that’s, like you said, generating any kind of income. Now, what?

Lisa: Yeah, I mean, and the thing is, and you can’t tell this from the tax return, is how they’re titled is big. I mean, are they titled jointly? Are they titled in your name or his name? We do find too often that they’re titled in the other spouse’s name that we’re not working with. It doesn’t mean it’s not part of the marital separation of assets; it just makes it a little bit harder. You can’t call up and say, “Send me a statement of the most recent month,” when you’re not on it. That’s the next thing we look at is how things are titled, and is there anything that came to either one of the spouses prior to the marriage, because that might be pre-marital property that is not part of the settlement. Anything that was commingled during the time of the divorce is going to be part of the marital settlement.

T.H.: Also inheritance that you may come into during or—  

Lisa: Well, inheritance is interesting, because if you get an inheritance during your marriage, and you never commingle those assets, and you keep them in separate account, and you’ve not use them for expenses, you can keep those separate in a separation. This is where the lawyers really get involved.

Jessica: Right.

T.H.: But those are things to think about. I mean, those are definitely things you need to talk about and think about.

Lisa: We talk to clients about this, clients that are getting married later, or maybe a second marriage, about keeping certain things separate and putting certain things in trust, as opposed to—just careful what you want to put in joint names. I’m not saying your marriage is going to end, but think about it. The way things are titled is very important legally. We try to talk about that. We talked about that in a class that I did as well, so you have a feeling for what’s out there. But after you find what you think you found, you know how everything’s titled, and that’s where you start—well, obviously, the attorneys are going to start to get involved. But in some cases, it is better to take more money as a lump sum, if it’s available, to prevent having to get payments. This part, I’ve seen a lot of where if somebody says, “I wish I’d taken that extra—I’m going to make this up—150,000, so I didn’t have to fight every month for the extra 1000 for—”

T.H.: Every two weeks.

Jessica: Right.

Lisa: Yeah.

T.H.: Every two weeks. Yeah.

Lisa: Yeah, I always bring that up to clients because I’ve seen the side of it where you think it’s going to be a no-brainer. You’re just going to get the money every day for 10 years. And it doesn’t happen.

Jessica: Right.

T.H.: Then it’d be better to get it as a lump sum because then you can work with someone like Lisa and start investing it properly and thinking about the future. You have it in your hand, as opposed to getting it every two weeks, and maybe your spouse loses a job, or something happens, or someone gets sick, and then that money stops.

Lisa: Yeah. Yeah.

Jessica: The concept, honestly, it’s almost like when you’re winning the lottery, right? You can take the pay out, and you can have the money over the course of 50 years and feel like you’re always set. Or you can take the lump sum and leave money on the table. I’ve said so many times, when it comes to figuring out the financial aspect of your divorce settlement, you have to actually think to yourself how much is the money worth? Because sometimes leaving some money on the table is more worth it if you know that you have the security of taking that lump sum now. You have control of it, exactly like T.H. said. You can give it to a financial adviser who can now guide you and invest it for you in the best way to be able to make returns off of it, versus the stress and aggravation in your life, and the bandwidth, the mental bandwidth that you’re spending on trying to get it every month, or every quarter, or whatever your arrangements are. Before we wrap up, Lisa, what are the top three tips? I know we’ve gone over some things, but some things that maybe we haven’t mentioned that are equally as important. I mean, listen, the tax return is a huge tip. Knowing how things are titled, that’s not something we’ve ever talked about before. That’s a huge tip for people. What else can you tell us?

Lisa: I mean, I just mentioned about the titling thing. 401(k)s, 403(b)s, any of these employment accounts, spouses have protection. They follow different laws than an IRA or brokerage account—

T.H.: Okay, hold on. Explain what that is. Bring it down—

Jessica: That’s a retirement account.

T.H.: This is you work for a company, and your company is allowing you to invest money. I want to really break it down because there are a lot of stay-at-home moms who may not—

Jessica: Sure, but I thought all of that stuff is still marital assets.  

Lisa: It is. All I was saying is that a 401(k), which is if you have an employer that you can contribute pre-tax dollars, that’s a 401(k). If it’s a school or a nonprofit, it’s called a 403(b). If it’s a government, it’s called a 457. I’m going to just throw these numbers around. All these accounts are ways to save pre-tax. My point is they follow a rule called ERISA. It’s an acronym; it don’t doesn’t matter what it stands for. ERISA rules protect spouses. That spouse can never take money out of one of those three accounts without getting your signature. In many cases, it needs to be notarized. IRA assets are also marital assets, but they can be moved around much more easily. They do not need a spousal signature. So I’m just giving you a little tip that—

Jessica: Yeah, that’s good to know.

T.H.: That’s really important.

Lisa: —they have a little lock on them. They can’t move them without you.  

Jessica: That’s nice to know you have a little protection there.

Lisa: Yeah, so I would just throw that out there. I know I said it, but the number one thing everybody needs to know is their cash flow. It’s so boring, but it’s just the nuts and bolts of making your plan. When you make a decision, like you were talking about maybe taking a lump sum, we can figure out for you if that works if we know your cash flow.

Jessica: Right. Also, I feel like, look, everybody’s biggest fear about that is that they’re going to do the deep dive, and they’re going to realize they can’t make the ends meet. You guys, that likely won’t necessarily be the case. But even if it is, the sooner you know that, the better off you’re going to be, even if God forbid, that’s the position you find yourself in. You are so much better off knowing and starting to figure out what your plan is going to be than going down the same road blind.  

Lisa: I mean information is power. And so it doesn’t mean you have to sell your house. It doesn’t mean you need to downsize. It doesn’t mean you need to get a higher paying job. At least you have the information to make these decisions. 

Jessica: Correct.

T.H.: Right.

Lisa: I’m a big advocate of do not—if you want to go back to work, if you aren’t sure, don’t stay home just to get a higher child support alimony. When I first got divorced, women came up to me and said, like, “Don’t go to work. You’re going to get more.” Are you crazy? I got back to work very quickly, and my income went up. It was the best thing I ever did. The sit home and wait for somebody to give you support and hope it lasts is not the way to go about it.

Jessica: That’s just a whole mindset that takes everything that you deal with in your divorce into a different direction, when you sit back waiting for that. As opposed to taking control and living your own life and being responsible for yourself, is definitely a much more empowering feeling.

Lisa: Absolutely.

T.H.: We have spoken about your—not your, but individuals’ relationship with money, the emotional connection with money, the distress of money. Maybe you were in a marriage where you never handled it. Maybe you thought you weren’t smart enough to handle it. I don’t know how to do any of this. I don’t want to see the numbers with Lisa because it’s not going to be good. But the thing is, if you work with someone like Lisa, or any financial advisor, like the lady’s just said, you can now create a plan. If you want to live your life according to your rules and what you want, then you have to look at the money, everybody. It’s only intimidating if you keep telling yourself that you can’t do it. Start putting the message, “I can totally do this. I’m going to work with someone who’s going to make me feel comfortable, who’s going to let me ask any questions that I want, and I don’t feel dumb.” And that’s it. Honestly, even today, I work with a financial team that manages my money. I’m like, “Okay, go back and tell me again.” They do. Because sometimes I just forget.

Lisa: It’s got its own lingo.

T.H.: It’s fine.

Lisa: It’s got its own name. Yeah.

T.H.: So don’t be afraid to learn about the money whether you’re divorced, happily married, widowed, single, never married. I don’t really care.

Jessica: Yeah.

T.H.: But if you want to take charge of your life, knowledge is power, like Lisa said. We’ve done tons of podcasts all about the importance of financial literacy. Somebody like Lisa can really help you make sure you have all your bases covered so you can have a great future.

Jessica: That’s right. That’s right. Lisa, thank you so much for taking the time. We talk about money a lot on the Divorce etc… podcast and just in exEXPERTS in general, because it is so crucial for people to be able to have a gauge on what they have and to know how to plan for it, and how to be able to move forward in a way where they’re not feeling stuck, and where they’re feeling the freedom and opportunity to live the life that they deserve. For everyone listening, if you’ve enjoyed this episode of the Divorce etc…  podcast with the exEXPERTS today, then please help us out. When you subscribe, rate, and review, it helps us get the word out so we can support more people like you going through divorce and beyond. Check the show notes for more info on Lisa and BPP Wealth, including their security income plan, which can help get you onto the right track just the way that you need it. Of course, share this episode with anyone you know who can benefit from listening. Have a great day.