Untangling the Mess of Divorce Financials with Forensic Accountant Tracy Coenen
Forensic Accounting and Your Divorce
Today we’re going hunting for your money. Tracy Coenen is the forensic accountant behind The Divorce Money Guide, a tool that helps you understand your money and uncover where money might be hiding your divorce. She’s here today to talk about what you can do to untangle the mess of marriage financials and figure out if you’re the victim of financial abuse.
What are some of the most common fraud types in divorce cases? Where does Tracy find fraud the most? How can you protect yourself if you suspect your partner is hiding money? How do you get past your soon-to-be ex’s case of TDII syndrome (Temporary Decrease in Income) when it comes to your mutual cash-based business? We talk through a lot of scenarios and bring a lot of information to the table today.
Plus, we have a listener question. Tune in!
Links & Notes
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Pete Wright:
Welcome to How To Split a Toaster: A Divorce Podcast About Saving Your Relationships from TruStory FM. Today, we examine toaster fraud.
Seth Nelson:
Welcome to the show everybody. I'm Seth Nelson. As always, I'm here with my good friend Pete Wright. Today, we're going hunting for your money. Tracy Coenen is a forensic accountant behind the Divorce Money Guide, a tool that helps you understand your money and uncover where money might be hiding in your divorce. She's here today to talk about what you can do to untangle the mess of marriage financials and figure out if you're the victim of financial abuse. Tracy, welcome to the Toaster.
Tracy Coenen:
Thanks for having me. Such a pleasure to be here.
Pete Wright:
I want to talk about fraud, Tracy. You've been doing this a long time. I want you to talk to me about the most common fraud you have dealt with or you've discovered, uncovered, revealed, in your work on divorce cases. Can you start us out with that?
Tracy Coenen:
Well, the most common thing that I see on divorce cases is someone spending money on an affair partner. The hotels, the dinners out, the jewelry that the wife didn't get, the lingerie purchases, either on the secret credit card or on the family's credit card, but the spouse never looked at the statements and didn't realize that the spending was going on.
Pete Wright:
That's the stuff.
Seth Nelson:
I thought she was going to say fraud was attorney billing. I'm very relieved to hear that it's good old-fashioned people having an affairs and buying lingerie and dinners and hotel rooms.
Pete Wright:
Well, I got one in the family. I got a family member whose spouse had a complete, separate family with kids five blocks away and would go on two week business trips back and forth. What staggers me about this, and we've talked about this before with Seth, is how does it go or can it go for so long without somebody uncovering this kind of fraudulent financial activity. There's a whole universe or a fabric of financial infidelity, like the lies that you have to keep up to be able to maintain that, right?
Tracy Coenen:
Yes. You would think that the sheer laws of numbers, laws of averages would dictate that something would go haywire, something that would reveal it at some point, but you'd be surprised how this really can go on for years. Now in that story that you mentioned, being five blocks away, you've got to think when he's on his two-week business trip, some family member, friend, has got to run into him somewhere and then run into his wife and say, "Hey, I just saw Bob the other day and he said..." One of my favorite ones was my client, the wife, found out about the affair because the Tiffany store emailed to her a receipt for the thousands of dollars bracelet that had been purchased for Valentine's Day. Said she didn't get a bracelet. It was for the mistress.
Pete Wright:
Seth, are you listening?
Tracy Coenen:
They sent it to the wrong email address.
Seth Nelson:
That's why I don't shop at Tiffany's anymore.
Pete Wright:
There you go. Terrible data handling. Am I right? No.
Seth Nelson:
So this happens all the time, Pete, and here's the problem from the litigation perspective, you have someone like Tracy who digs in and finds all these purchases. So is Tracy really digging in just to look for those and if so, what's the cost-benefit analysis of her doing so? It's different if she's doing her job and looking at all the expenditures and reviewing credit card statements and saying, "Wait, what about these?" Because she's already in the documents and then we find them. What's the recourse for... Let's take the multi-thousand dollars Tiffany's bracelet. When I go to court, I can say, "Judge, I'm asking for unequal distribution, i.e., we're dividing assets and liabilities and I want my client to get more than 50% and here's why. The husband has already spent money that should have been in the marital pie."
Pete Wright:
Wow.
Seth Nelson:
"So judge, he spent $4,000 on the bracelet." Now what my client's going to say is, "I want the four grand." What the judge is going to say is, "I'll give you two, because he was allowed to spend two grand on that any way he wanted anyway." The worst punishment, in quotes, is getting it the way it should have been in the first place. There's no added benefit or punishment. Now sometimes the judge will hammer them on alimony or another area of the case. They just won't say what it was for though. Tracy, have you seen what I'm talking about?
Tracy Coenen:
I've seen what you're talking about. Now I'm going to play the part of the client. "Seth, what do judges do about this? How likely am I going to be to get my money? I'm going to win on this, right?"
Seth Nelson:
Nope. It's a hard battle, and then how much are you going to spend of my time going to get the four grand, which is only going to be two grand, and then we hope that we get that money on attorney's fees. Now, I think every little nugget helps, but people think that this is the smoking gun that's just going to rule the day and it just doesn't.
Tracy Coenen:
I like to tell clients that when I am approaching these financial issues and looking for evidence of things like this, I like to take an approach of death by a thousand cuts. How many things can we find that are going to discredit your soon-to-be ex-spouse? Because you are making allegations and trying to get certain things in this, and if we can find multiple ways to prove that they lied about the income and we can prove it three different ways, or we can find multiple instances of your spouse failing to disclose things, whereas you have been forthcoming with things, you might be able to gain some advantage in litigation there, but when it comes to getting money back on affair stuff, it's hard. Especially Seth, I know you know this, when it comes to meals out. We can't prove who was at that meal.
Seth Nelson:
Exactly.
Pete Wright:
Yeah. Whether it's the other spouse or another relationship, another affair.
Seth Nelson:
I think Tracy's analysis of death by a thousand cuts is an excellent one. When you go in and say, "Not credible. Not credible. Look, judge. Look, judge," but that just creates a void and then you have to come in and fill it and say, "Here are the real numbers," and so it's a two-step process. One is discrediting, because ultimately, the judge has to make a decision and wants to know what they can rely on to make that decision. So when you discredit, one, that's not enough. You still have to back it up with what you believe the true numbers are, and of course, they're going to come and say, "Well, Tracy, did you carry the one? Did you forget about the tax benefit of having a child? What about you had the tax calculation as single, but isn't she going to be head of household because she has the children more than 50% of the time." So you got to dot your Is and cross your Ts to make sure that your presentation of the numbers can now be relied on after you've discredited the other side.
Pete Wright:
Wow.
Tracy Coenen:
Yeah, that's absolutely true. One of the parts that I really like about my job is working on strategy with the attorney. I'm going to be saying, "Seth, here are the numbers I came up with. Let me tell you how I came up with these numbers. I had to make some estimates," and newsflash, people, sometimes we have to make estimates because we have gaps in the data. "Here's how I came up with my estimates and this is the result, but if I'm on the other side, here's where I'm going to attack." So we start talking strategy about what is the attack going to be, how are we going to counteract that and things like that.
Seth Nelson:
That's what a client should be asking their lawyer. Why do I need a forensic accountant? What are they going to do for me and what's the return on my investment? Now in my office, my answer's pretty simple. For the work that I need done, I need someone to be able to testify to it and it will take the emotion out and you testifying, you're not going to be the best witness on this. Second, they're going to be handling all the financial data and then reviewing it with me, and though you're going to feel like that's a double bill, they can do it quicker and less expensive in their shop than I can in my shop, so I'm outsourcing it.
It will cost you less, but then I have a witness which is positive for us and I say, "Here's the only time that it's going to feel like it's more. Any document you send to the forensic accountant, I want a copy and we're going to put it in our file," because I don't want to be told, "I provided the document to Tracy," and Tracy said, "I never got the document from your client," so I need to make sure and if anything happens to Tracy, I need to know what's been provided and what's not. That's one little added expense. The other thing the client should say, "Well, what happens when you guys are talking to each other? Do you both bill me?" The answer is yes, because we're both working on your case in trying to figure out how to present the evidence. Now Tracy's wagging her finger at me like most people do.
Pete Wright:
I know. You're about to get scolded. Let me get some popcorn. Go ahead.
Tracy Coenen:
I'm wagging my finger because Seth, I do all of my cases on fixed fees, so my clients get to call me and they don't get charged hourly for it. You and I talk, I don't charge the client hourly for it.
Seth Nelson:
There we go. Tracy's different.
Pete Wright:
There's a deal. All right. I want to talk about though... Just maybe you guys can square me on assumptions. Is this sort of financial fraud found in certain divorce cases more than others? High net worth, low net worth, or is fraud just the great equalizer?
Tracy Coenen:
I get asked that question a lot and it's a hard one to answer because what I see in the divorce world is not representative of the entire population. When cases come to me, they already are pretty certain that there is fraud, so that's what I'm seeing over and over. I would say anecdotally, being out there in the world and talking to people, I think actually, there's a pretty even instance of fraud across all income levels when it comes to the divorce situation and I think in a lot of cases, what we have is not necessarily fraud, but we have simply a suspicious spouse. "We are getting divorced. I don't trust you anymore. I want to know what's been happening with the money."
Pete Wright:
When you think about these cases and I'm putting myself in the frame of somebody who might be looking at a divorce, how do I know that there's a potential or what might make me suspicious that there's fraud going on in my divorce? Are there signals I should be looking out for from my spouse hiding things? What are the kinds of things you see when people are using finances against one another or hiding from one another?
Tracy Coenen:
We call these red flags of fraud. They are the signs that you might have something terrible going on with the money and I have a laundry list of them that I can identify after working for so many years in this area. Some of the most common ones that I see in the divorce arena include a change in behavior so your spouse is potentially changing when they're coming and going or how protective they are over their phone or what information they allow you to have access to.
Seth Nelson:
That's the big one for me... Is ask for the bank statement, ask for the passwords, ask to review the tax return before it's filed. Ask for the credit card statements, ask for your 401(k) and IRAs and if they're reluctant to give that to you, there's a problem, and what I get a lot of, and I'm sure Tracy deals with this as well, is people come to us through no fault of their own because when you're married, you break up the responsibility of running the household, raising kids, getting people to and from. Who's going to pay the bills? We both don't need to be online paying the bills. It just gets divided and years go by.
Then you realize, I just swiped the credit card. I don't know if it's getting paid. In litigation, we're going to get those documents. I can get them directly from the credit card company, I can get them through discovery, through mandatory disclosures, all these legal words that we've talked about over the years, Pete, but we'll find it. Do not let yourself be embarrassed or paralyzed that you don't know it now. That's part of our job. According to the National Institute of Alcohol Abuse and Alcoholism, about 10% of children live with a parent with an alcohol use disorder.
Pete Wright:
It's stunning. We talk about this every week and I never adjust to it. Just what an alarming statistic that is and that's why we have a fantastic partner in Soberlink. We all want to make sure that children are safe with sober parents and maintain great relationships with both parents.
Seth Nelson:
The thing that statistic doesn't tell you, it's probably higher in divorce cases, because alcoholism is one reason that people get divorced. When you're dealing with a divorce, you may be accused of overindulging, of drinking too much, of being an alcoholic. Put any term that you want to put on it, it might be coming your way and you might have to defend yourself. Well, how do you do that? You do that with Soberlink. Independent, real time, third party verification. You blow into a little device, it takes a little picture of you that can only be used in court. It's not going to get on there on social media and you can say, "Judge, look. Here's the results. I was not drinking when I had my children. I'm focused on them. I'm focused on sobriety. I'm just focused on showing you that it's not true." That's what Soberlink is all about.
Pete Wright:
That's right. You can get two different devices. One of them is a device that connects to your phone via Bluetooth and uses your phone to relay your real time breathalyzer data and facial recognition data. The other is cellular. You don't need to worry about a phone in the US and it will send your data right where it needs to be when you need to prove that you are sober. We love it. The courts love. It keeps the focus on the best interest of the child. That is the most important part. You can get $50 off your device when you sign up via soberlink.com/toaster. That's soberlink.com/toaster. Thank you to Soberlink for sponsoring this show.
You talked about behavior. That's another one of those red flags. It just hits me that one of the reasons that our case in the family was discovered is because the now former spouse was changing credit card numbers often. "Oh yeah, I just need to change this cable autobill credit card," and they had a number of credit cards that seemed to be changing often for whatever reason, points any sort of... But it started happening with great frequency and that was one of those behavior changes that they came back to and found.
Tracy Coenen:
Certainly, changes in how one spends money or manages the money is a huge, huge red flag. A great example is, "We never went to the ATM a whole lot. Maybe once a month, we each went to the ATM just to have a little bit of cash in our pocket and now, all of a sudden the spouse is going to the ATM three times a week and taking out 3, 4, $500 at a time and we don't know where that money is going." I will tell you that in the vast majority of divorce cases, A, they don't need a forensic accountant. I like to say 95% of people in divorces probably don't need a forensic accountant, but in almost all of those cases, wherever there is fraud, almost all of the frauds would've been caught early on if the spouse had been looking at bank statements and credit card statements because there are telltale signs there.
Seth Nelson:
The hardest part, Pete, is finding fraud when your spouse is in a business that they own that is a cash business. That's a lot harder because what Tracy's saying I think is exactly accurate. If you are a W-2 employee, you work for a company, they send you a paycheck, they send you a W-2 at the end of the year, it gets direct deposited. It's easy to trace that money if you're looking at your bank statements. You look at your credit card statements and they're like, "Oh, we just paid the credit card. It matches up. 1500 bucks this month," whatever the case may be, but when they're taking money out of the till in a privately held company or if they are running personal expenses through the business credit card that you don't see, that is a lot harder and unless you're involved in that business or you're reviewing those financials all the time in detail, it can be a lot tougher. So Tracy, what do you do on situations like that?
Tracy Coenen:
Well, you're right. It's really hard. I have cases with the plumber, the landscaper, the auto repair guy, these guys who are giving their customers discounts for paying in cash and then the cash is disappearing into thin air. What we look for is other ways to prove that there is income. One of the things I can do is what's called a lifestyle analysis. Looking at the spending of an individual to try to add up how much they're spending on a monthly basis and does that make sense in light of what they're reporting on the tax return or some financial statements for income. That's one way. Another way is looking for creative ways to prove that there's income to a business, maybe not even cash income. I've seen manufacturing businesses where the divorce is filed and suddenly, oopsy, we've lost a bunch of customers. Look, sales are down.
How can we find a way to prove that the volume of business hasn't decreased? Got two examples for you. One, a cash type of business, a laundromat. Divorce was filed. Husband says, "Oh gosh, there's been some changes in the neighborhood. There's been street construction. People can't get to the laundromat. Look. Business is down." We thought it through. We did a subpoena to the water company. Lo and behold, water usage, same levels as always. We know the income has not gone down. Another business, manufacturing business, "Oh gosh, things have changed. We've lost a bunch of customers." We didn't know how we were going to prove that they were still making money. We saw that the payroll never went down and we asked the question, well, why isn't payroll going down if your productions going down? Didn't get a real good answer. We subpoenaed FedEx records. Found that they were shipping just as much as they always have.
Seth Nelson:
There's a syndrome for this, Pete. It's called TDII, temporary decrease in income syndrome. It impacts anyone going through a divorce that's not going to be honest about it.
Pete Wright:
TDII. Is there help for that, Seth? How could I possibly get a cure?
Seth Nelson:
Yeah, you talk to your lawyer who's honest and say, "Play it straight."
Pete Wright:
I want to pivot a little bit because I know so much about what you do, Tracy, is about giving people who are going through this agency to better understand what they're going through themselves, how to defend themselves against financial fraud, and you're going to talk a little bit about some of the tools that you've created. I'm curious, your take, on the levels to which one can and should go if they suspect this kind of financial fraud before bringing in an expert or the legal team. Is there is a point where there is risk to self do this or is it just good money, smarts, anytime?
Tracy Coenen:
I'm going to give you the answer that any good attorney would give you even though I'm not an attorney.
Seth Nelson:
Thank God I don't have to answer it.
Tracy Coenen:
The answer is it depends.
Pete Wright:
Oh no, that's exactly what he would've said.
Tracy Coenen:
Of course.
Pete Wright:
Oh, and to check your jurisdiction. Yeah, I got him.
Tracy Coenen:
Oh yeah, or talk to your attorney about that.
Pete Wright:
Talk to your attorney about that.
Tracy Coenen:
Here's what I recommend to people. If you have some serious concerns about what's been going on with the money, do what you can to gather information quietly. That means if you have legal access to bank and credit card accounts, download those statements. Get a copy of your own credit report. Don't get your spouses because you can't legally without their permission, but start gathering the tax returns, the things that you have on hand. Don't tip your spouse off that you have some concerns and just start going through them. Just start looking through them and see if there are things that cause you concern. That's the base level of doing it. Don't cause a big problem yet. Let's just start gathering information.
Pete Wright:
Just educate yourself. We've talked about that before, Seth, right?
Seth Nelson:
Absolutely. Step one, get educated and don't beat yourself up that you aren't educated at this point. That's freezes a lot of people. They don't want to uncover that rock. They don't want to pick up that rock and look underneath because they're going to find a bunch of worms. You might, but it's better to know they're there and let's deal with them, as opposed to just leaving them there and letting them fester and who knows what's going to happen next.
Pete Wright:
Well, so that's step one, is educate yourself. Step two, let's assume you find some filth under the rock. What's step two?
Tracy Coenen:
Step two is the talk to your attorney step, because if you are thinking about a forensic accountant being involved, your attorney has to be on board with the concept. There are cases where I've had a client call me, talk to me on the phone, tell me their story. I say, "Okay, this might be a case that needs me. I'd like to talk to your attorney next." They hook me up with their attorney and the attorney says, "No, we do not need a forensic accountant. Here's what's at stake. Here's what we've already uncovered. It's going to be a big waste of money." We've got to all be of one mind that it's the right step to take, so it's talk to your attorney, show them what you found and talk through, "Okay, if this fraud that I may have found really exists, do we have recourse?" How would we go about it? How much is it going to cost us? Does it make sense to escalate it and bring in an expert?
Seth Nelson:
That's why if I'm doing that analysis, Pete, part of what I'm doing is are there other things the expert can do in the case that will lead to them finding the fraud as opposed to just hiring them to look for the fraud?
Pete Wright:
Okay, so beyond investigation.
Seth Nelson:
Right. If you're going to do a standard of living analysis and look back at the statements for the last two years and say, "Here's what I think you guys spent on a monthly basis when you average it on a monthly basis. You pay your taxes once a year. Boom. Property taxes, we're going to average that out per month." Well, when they're going to go do that and look at all your finances for two years, they might uncover the fraud, but at least I'm having them work to do that analysis. Now why do I want want that analysis done? Because it's a 12-year marriage and we're looking for alimony, okay?
If there is a business that needs to be valued for the division of assets and so I need a business valuation done, then I might hire the forensic accountant to do the business valuation and say, "While you're at it, start looking around." You might have them do something else that will lend themselves to doing the investigative work because that's the work they have to do to do the real work that you're asking them to do. It's almost a side benefit as opposed to saying, "Just start looking through the statements."
Pete Wright:
Okay, listening to you guys talk about this and I'm thinking, "Oh, I might have financial issues in my case," of course, I'll need a forensic accountant, but this is the old if all I have is a hammer, every problem's a nail. How do I know if I should be having the forensic accountant conversation with my attorney? How many divorces end up needing your services, Tracy? Do you have a sense for the ballots?
Tracy Coenen:
I think Seth is better... The one answering that because-
Pete Wright:
Yeah, because all of your cases need a forensic accountant.
Tracy Coenen:
Right. When they come to me, someone's already determined that they need a forensic accountant, so Seth, what-
Seth Nelson:
Pete hates it when someone says Seth is better at anything. So thank you for that, Tracy. Ring the bell, Pete. I would actually broaden that question, Pete. I think every potential client and every client should be asking their lawyer, what, if any, experts in my case do we think we need? Don't just limit to a forensic accountant, but that's a statement or a question in a conversation that should be had upfront. Now as you get into a case and you realize shockingly that your client didn't tell you everything about them, only about the other side, and then more stuff comes to light and I'm like, "Whoa, we might need an expert." Let's say there's some issues with a parent that we... No one's talked about alcoholism and now we have a parent who got drunk driving and so now, we have to talk about getting an expert on alcoholism and using Soberlink that sponsors this show.
That's something that might come up during the litigation while I'm representing them because in family law, it's shifting sands. Every day is different. Things change, behaviors change, how things impact kids. Maybe there's a job change that we didn't see coming or they lose their job. Well, was that done voluntarily? Is there a side deal? Cut my salary. Say that we don't have as much work. What's really happening here? Get the text messages. There's all these different things you should be looking at. I'd broaden the question. I would have the conversation very early on and then update that conversation throughout the representation.
Pete Wright:
Tracy, 8:00 AM, day one, your partner comes to you and says, "I want a divorce." What do you do?
Tracy Coenen:
You start gathering the information, which we already talked about and you start figuring out how to protect yourself. If you are in a position where you have been a stay-at-home parent, you start thinking about finding a source of income, getting a job. You think about getting a credit card in your name only. You think about a bank account in your name only. That credit card and that bank account are going to be your protection and security that you're going to have some access to money going forward.
Seth Nelson:
That is not the way I would've answered that question, Pete.
Pete Wright:
Oh, do tell.
Seth Nelson:
8:00 AM, make yourself a mimosa because it's in the morning and celebrate. It's about time. Maybe a Bloody Mary. If you would've said 5:00 PM, I would've picked a different drink.
Pete Wright:
Okay, that's fair. Fair point. All right.
Seth Nelson:
All that stuff Tracy said is 100% accurate and I think the other thing is if you're employed, and you want to talk to your lawyer about this stuff, but if you're employed, you're allowed to direct that paycheck to whatever account you want. You can start putting it in your own account so you know that you have access to funds and your spouse isn't going to go in there and just take it all. You're going to disclose it. You're going to lay out where it's been spent, what came in, where it went out, all that stuff. If you have a spouse that you are terrified is going to take all the money out of the account and try to starve you financially through this litigation, go to the joint bank account, take half of it out, put it in your own account. You're going to account for it, but it will give you some financial security.
Tracy Coenen:
I was going to ask you that question, Seth. I know I'm not supposed to be interviewing you, but I was going to ask you what you think about that because I get that question a lot. "We have some money sitting in our account. I don't work. My husband does. If he pulls that money out of that account, I will have nothing and I don't know how I'm going to get an apartment or things like that." I'm going to say there's $20,000 in that account. Should the person leave that joint account alone because we're all just going to trust the money stays there?
Seth Nelson:
Nope.
Tracy Coenen:
Should that person take half of the money out?
Seth Nelson:
At least.
Tracy Coenen:
Or should they take all of it out knowing that the worst thing that happens is, A, they have to account for all the money and potentially owe half of it back to their spouse later?
Seth Nelson:
The last one's a depends.
Pete Wright:
At least we got there.
Seth Nelson:
Here's why. Yeah, well, you know we're going to get there eventually.
Pete Wright:
We got there.
Seth Nelson:
Pete, come on. Have we just met? Here's the reason it's depends on the last one and it's really on the second one why I said yes, take half. If this is an account where you have regular reoccurring automatic withdraws, you don't want to take it all out and then not have the mortgage paid.
Tracy Coenen:
True, true.
Seth Nelson:
Or your kids' education paid or their extracurricular paid or their health insurance paid. You need to be aware of what's happening there. That's usually from a checking account, not a savings account. If it's a savings account, you're pretty much safe that look, take it, at least half. I would usually say take half, but I'm also going to look at how much is in the account and what is your burn rate. How much are you spending a month if they totally cut you off and I would do that analysis and if you know it, if you're just guesstimating, we'll go with a guesstimate, but if there's 20 grand in there and your burn rate is $10,000 a month and you're afraid he is going to cut you off, I'm going to say take 20 grand.
You got 60 days. If your burn rate is a thousand dollars a month, I'm going to say take 10, leave the other 10. Now we've got 10 months, and if you don't know, we can take half, but we can just figure it out from there, but there are certainly cases where someone just tries to starve the other person out and not give them access to attorneys or health insurance. It's amazing what people will do to try to force people into a settlement just to be done.
Pete Wright:
Well, on that glorious note of humans' goodwill, Tracy, we got to talk a little bit about the Divorce Money Guide. First of all, before we started talking, you switched to another screen that looks like you're working on the next generation of the Divorce Money Guide. Tell us a little bit about what you have going on and how you help people.
Tracy Coenen:
The Divorce Money Guide is my online handbook that helps people with do-it-yourself forensic accounting basically. I know they're not going to become forensic accountants, but it walks them through a very simple 10 step process to get those bank and credit card statements and tax returns, to organize them, to look for important things in them that will help them know what their money has been spent on and determine if there's been any fraud. The book that you mentioned, that's what I showed you, is Divorce Money Guide Lite. It is an introduction to the whole process of taking control of your financial situation and divorce. The Divorce Money Guide is for anyone, men or women, the book, Find Me The Money, is for women.
Pete Wright:
How is it for women? Why can't I use it?
Tracy Coenen:
You could. I think that you might not appreciate the book as much because it is the story of a woman getting divorced and the experience that she's having with the financial aspects of the divorce and managing all of that, and so, you may come away from reading that book feeling like we were beating up on men.
Seth Nelson:
I'm in.
Pete Wright:
All right. Yeah, I'll take it.
Seth Nelson:
I've found it to be good advice for all the men out there... Is not to defend the male race. When you do that, you're going to be okay. If you defend the male race when you're talking to a woman, bad idea.
Pete Wright:
Well, I think the other piece is that I think we do better having these conversations in a way that is not gendered because that level of awareness. Even if I read the book and find that I am being... Say I take away that I'm being beaten up on. The truth of the matter is if I feel that way, it's because I feel that way and that's only me. I get to own that, but it doesn't change the fact that having that awareness is going to serve me and I think I'm with Seth. Better to have a less gendered conversation and at least be aware of what the other side is going through.
Tracy Coenen:
Jokes aside on the men versus women, I work much more frequently with women. I find that even as far along as society has come, it is still more often the woman who is the stay-at-home parent who is lacking control over the finances. My audience for the Divorce Money Guide has naturally gravitated to be mostly women. When I was coming up with a concept for the book, I made a conscious decision to write it from the point of view of a woman who is in this position, the divorce, because I felt that that's what my audience would find most relatable.
Pete Wright:
Totally fair. Totally fair. Well, I think it's fantastic and everybody should read it no matter what you think. A Divorce Money Guide, where do you want to send people? Give us the website where you want to send people to learn more about your tools.
Tracy Coenen:
I'm going to send them to fraudcoach.com/toaster. Yes, your listeners have their own special page that they're going to go to.
Pete Wright:
We've arrived.
Tracy Coenen:
You have.
Seth Nelson:
In the world of fraud, so we're making progress.
Pete Wright:
This is fantastic. fraudcoach.com/toaster. We'll put that link in the show notes. Thank you so much, Tracy. You're fantastic. So glad we got to talk to you today.
Tracy Coenen:
Thanks for having me. It was really great fun talking to both of you.
Seth Nelson:
She had to hesitate on that. You see that? She's like, "Really fun to talk... Oh, both of you."
Pete Wright:
She made a decision. She made a decision.
Seth Nelson:
Yeah, she did.
Pete Wright:
She's not telling us which one, but she did make a decision.
Seth Nelson:
Yes, she did.
Pete Wright:
Well, this has been great, Tracy Coenen, fraudcoach.com/toaster. We sure appreciate you teaching us some more and with that, we have a listener question today, so we're going to go answer that right now. Seth, we have an anonymous listener question, and this is on, I think... Is this one of your favorite subjects? I'm so excited to watch you get the chills on the back of your neck when I talk to you about QDROs.
Seth Nelson:
Qualified domestic relations orders. Awesome.
Pete Wright:
Look at him. He's fired up already. Here we go.
Seth Nelson:
Let's get Matt Lundy back on the show.
Pete Wright:
That's exactly right. Ex-husband died in sleep at 53, post-dissolution, pre-QDRO. "The estate started out representing our two children who are now both adults. I tried to keep the kids out of the legal because trauma of dad passing. 16 year old daughter found him, did unsuccessful CPR. 17 year old son away at college. The estate is going for half my pension. Are my kids entitled to my pension?" The listener writes this is state of California and it doesn't directly involve divorce as written. So first of all, incredible condolences. I'm so, so sorry for that story. That is very, very hard. Seth, what do you think?
Seth Nelson:
Just traumatizing on the kids. It's horrible. So QDROs, qualified domestic relations order, are governed under federal law. That part of this question really should be answered by a QDRO attorney. I'm familiar with them, but as we've had Matt Lundy on the show, we give our QDROs out to Matt because he does it every day and it's a very specialized niche. I'm a little confused by the question because what I think I'm reading into the question is that her QDRO or her retirement plan was the one being QDRO'd over to her former spouse who's now deceased, and if that's the case, then his estate would be going after half the pension.
Pete Wright:
It's interesting you would say that because it looks like anonymous listener submitted the question twice and so let me just read this additional two lines here because that might impact your answer. I don't know. "My ex passed away post-dissolution, pre-QDRO. His estate is represented by his family who are representing our children who were not adults at the time of death but are both adults now. They're trying to get half my pension. Is that possible?"
Seth Nelson:
Okay. That clears it up a little bit. So it's an interesting question which I would talk to a QDRO attorney about, and I would also check your local jurisdiction because you said this was the state of California where I do not practice law. It would seem to me... Is in our final judgements, we do something called reserving jurisdiction, which is reserving power for the judge to enter the order to divide that asset. Even though the asset hadn't been divided yet, as in the QDRO hadn't gone through and they don't have a data segregation when they split it, my gut tells me is that asset would be part of the estate and then the estate would distribute it pursuant to the former spouse's will or trust. There's a couple different steps here and this is horrific to have to deal with because ultimately, if it's her pension, it would be going to her and then to her children if there were some left, but maybe it's just going directly out.
I would also check with a tax attorney because if it's going to your children because it was supposed to be his through the divorce, there might be some tax benefits to them getting it. Now, that doesn't alleviate the fact that you don't get it, but in the divorce, it was probably already divided. I don't know if that's the answer they wanted. I typically tell people, "I'm going to tell you what you need to hear, not what you want to hear," but there's like three different areas of law here, QDRO, which is federal, potentially tax, and then the divorce, so a lot of things working there.
Pete Wright:
Okay. Well, thank you listener for submitting the question, for trusting us to handle the question and to point you in a direction in your local jurisdiction. We appreciate you and thank you everybody for downloading and listening to this show. We sure appreciate your time and attention. Don't forget you can find the show. Just visit howtosplitatoaster.com and you can ask your own question by clicking the I have a question button and you can fill out a form just like our anonymous listener did, and you could be anonymous too or share your name. We don't care. We'll call you whatever you want, but we're just glad to have the questions. We're glad to have you listening. Thank you very much on behalf of Tracy Coenen, fantastic forensic accountant, and Seth Nelson, America's favorite divorce attorney. I'm Pete Wright. We'll catch you next week right here on How to Split a Toaster: A Divorce Podcast About Saving Your Relationships.
Outro:
Seth Nelson is an attorney with NLG Divorce & Family Law with offices in Tampa, Florida. While we may be discussing family law topics, How To Split a Toaster is not intended to, nor is it providing legal advice. Every situation is different. If you have specific questions regarding your situation, please seek your own legal counsel with an attorney licensed to practice law in your jurisdiction. Pete Wright is not an attorney or employee of NLG Divorce & Family Law. Seth Nelson is licensed to practice law in Florida.
