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In this episode of 'The Exit Strategy: Your No Bullsh$t Guide to Divorce,' hosts Elizabeth Stevenson and Sarah Hink from New Direction Family Law are joined by Jason Deshayes, CEO of Cook Wealth. They discuss the crucial role of financial planning and tax preparation in the context of divorce. Topics include tax liabilities, the importance of transparency in joint tax filings, handling separate and joint accounts, and the significance of consulting with CPAs and financial advisors. The episode aims to educate listeners on making informed financial decisions during and after a divorce, ensuring a smoother transition from victim to victorious and from bitter to better.
00:00 Spotting Financial Red Flags in Relationships
00:21 Introduction to the Exit Strategy Podcast
00:53 Meet the Expert: Jason Dehe from Cook Wealth
01:34 The Role of Spouses in Tax Preparation
02:38 Understanding Joint Tax Returns and Liabilities
03:37 The Importance of Financial Transparency in Marriage
04:08 Navigating Financial Conflicts During Divorce
05:22 The Benefits of Filing Taxes Separately
07:31 Managing Separate and Joint Bank Accounts
10:08 Handling CPA Conflicts During Divorce
13:59 Dividing Assets: Brokerage vs. Retirement Accounts
16:08 Navigating Financial Confusion
17:21 The Role of Financial Advisors
17:58 Tax and Wealth Management
18:30 Cash vs. Retirement Funds
19:26 Alimony and Tax Implications
21:16 Pre-Planning for Divorce
23:52 Financial Planning for Smaller Budgets
29:10 Services Offered by Wealth Management Firms
31:43 Conclusion and Contact Information
Creators and Guests
Host
What is Ex-it Strategy?
Your no bullsh$t guide to divorce with experienced attorneys from New Direction Family Law and guests and professionals who have been there. Unfiltered discussions to help you move from victim to victorious and from bitter to better.
[00:00:00]
Jason Deshayes, CPA/PFS, CFP®, CKA®: When you start seeing like cars show up or toys. Mm-Hmm.
Elizabeth A. Stephenson, MSW: Correct.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Motorcycles. Really nice stuff. And you look at your tax return and go, we make this much. Mm-Hmm. Our house and lifestyle is this much. We go to the country club, some things not add up
and that's the part [00:00:15] where a lot of people just kind of like to put their blinders on and.
Sarah J. Hink: years later you don't have a passport. Yeah. You're like,
Elizabeth A. Stephenson, MSW: we have a lot of juicy stories.
Welcome to the Exit Strategy. Your No Bullshit Guide to Divorce with the [00:00:30] experienced attorneys from New Direction family law, unfiltered discussions to help you move from victim to victorious and from bitter to better.
Elizabeth A. Stephenson, MSW: Hi everyone, it's Elizabeth Stevenson. I'm a partner with New Direction Family Law and my
Sarah J. Hink: partner in crime, [00:00:45] Sarah Hink with New Direction Family Law. And thank you for joining us today.
We have a guest, which is always great. Did
Elizabeth A. Stephenson, MSW: it's, hello, thanks for being here. Um, Jason Dehe, I hope I'm saying your name correctly, CEO of Cook Wealth, right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Yes. We
Elizabeth A. Stephenson, MSW: 20 years of experience in [00:01:00] financial advising and that sort of thing.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Oh, yeah. A lot of tax work in there too. And planning.
Elizabeth A. Stephenson, MSW: So, um, we deal with that a lot, but we're not CPAs, so we, we love people like you that can help us.
Yeah, you can
Jason Deshayes, CPA/PFS, CFP®, CKA®: say you do this part. I don't
Sarah J. Hink: wanna do this part. In fact, like a lot of our, you know, [00:01:15] separation agreements and other, and even like court orders will say your attorney's not CPA, so, you know, don't take anything we say is tax advice because we don't know what we're talking about. Um, so we always say, please go speak to your CPA about these questions and, and you know, we can give them, [00:01:30] I like give them general ideas, but.
I'm not an expert whatsoever. That's right. That's right.
Elizabeth A. Stephenson, MSW: So I wanna start with when people are together like they're married. And so, and we were chatting about this a little bit before. Um, how involved are people in tax preparation as a couple and [00:01:45] knowing what's out there, even while they're still together?
Not even contemplating divorce.
Jason Deshayes, CPA/PFS, CFP®, CKA®: So I tell you that at some point that was generational, where it was like the one spouse took care of everything and that's who as a CPA. We'd see the one spouse, [00:02:00] maybe the other one would just come and say hi, but for the most part wasn't engagement. Right. That's changed a little bit where now there's more division of responsibilities, but still.
I'd say more often than not there's the primary spouse and still, and so that person is usually [00:02:15] gathering the records. The other one may will see the tax return. They'll sign off on it. Mm-Hmm. But they don't necessarily spend a lot of time with their accountant or their financial advisor. Mm-Hmm. They kind of like.
Make that someone else's job. Right. They say, that's my spouse's job and that's what they do and I do [00:02:30] this part over here.
Elizabeth A. Stephenson, MSW: Right? Yeah. And so are they required? So can one person sign? I have a lot of times where the spouse goes, I didn't even sign on it. If it's a joint return, must they sign? They both have to sign it if it's a joint return,
Jason Deshayes, CPA/PFS, CFP®, CKA®: but, and unfortunately, what's kinda happens, there's like the, again, I will see it, I will [00:02:45] sign it.
I don't know what it says. So they'll just, especially now with DocuSign, right? Right. They'll just click away and then now it's done. You know, we're over with this. I would really encourage people when they're together is to actually take a little time to [00:03:00] go through it. Now, I do this with my wife. She probably hates it, but every year I'm like, we're not gonna do this innocent spouse thing.
You're too smart to be innocent spouse. I'm actually going through with her and I went, I go through and like, Hey, this is what's up here. This is a little different from last year. Here's where this comes from. She has questions. Every once in a [00:03:15] while I'll talk about some playing, and I would expect that with any client,
Joe Woolworth: right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Generally what. We do is we'll do a video, a short video that's like on Loom and just says, this is the big things here. If you have any questions, please look at before you sign. There's nothing worse than them [00:03:30] signing. And then it gets released. And so, by the way, three days later, I, I actually just now look at what's that number on the return, right?
Sarah J. Hink: Yeah.
Jason Deshayes, CPA/PFS, CFP®, CKA®: But too many people don't take the time to just even five minutes to really understand what they're saying. Right? 'cause once you're on it, you're [00:03:45] jointly liable for that tax, whether you read it or not. Correct. Mm-Hmm. And that's a little dangerous to be. Haphazard signing. Right. Something legally.
Yeah.
Elizabeth A. Stephenson, MSW: Sometimes that surprises us in separation and divorce. It's like, oh, there's a tax lead out there. Or, oh, we owe a lot of taxes. I had no idea. And [00:04:00] so am I responsible for that? And they're shocked that, well, yes ma'am. Or sure you are. Yeah. Yeah.
Jason Deshayes, CPA/PFS, CFP®, CKA®: And, and we'll drag out a long time we were talking about a story, right.
There was a situation where a, one of the spouses was very at the time, made more money. [00:04:15] The other spouse wasn't really working. Hmm. And they filed jointly. And then now the tables have turned, they've been divorced, but that balance still kind of plugs her. Mm-Hmm. Right. And you know, if you don't, if you have a large payment to the IRS and [00:04:30] $50,000 more, they can take your passport.
And so that's really scary that the government can just come and take that away. The government give it to you, the passport and take it away. Yeah. Right. But those are the kind of things that you just wanna make sure you're on top of. And, um. Even if someone [00:04:45] is really intelligent and you go, oh, they're very savvy financially.
Right? That's almost where you definitely need to know, right? So that you're not completely an lurch if something happens, whether it's death or divorce, that now you have to be the one that has to do this stuff.
Sarah J. Hink: Yeah. I mean, you should know. I mean, there's. Trust [00:05:00] issues in every relationship. If you're not talking about certain things and finances is one of them.
One of them. People don't like
Elizabeth A. Stephenson, MSW: to talk about finances. No. No. At all. They don't. It's like a taboo in our society for some reason. I don't quite understand why
Sarah J. Hink: I push prenups and then, you know, it's like 10% of my practice, right? Maybe [00:05:15] even less. No one really ever forgets some, but that's the time to really start talking about it before you even get married.
And to understand taxes. I mean, there's some. People out there who are married and maybe it's more beneficial for them to actually file separate Mm-Hmm. Correct. Mm-Hmm. Right. Yeah. And like, what's some of those circumstances?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Everyone's [00:05:30] a little different. Mm-Hmm. It depends on, you know, we're not a community property state.
Right. And I came from New Mexico, which was a community property, still is a community, community property state. And that's where the filing separately gets a little wonky. Mm-Hmm. Here it's a little clearer, but situations where perhaps [00:05:45] one spouse makes significantly less than the other one does, or they make, even if they're equal earners, it may not.
And their situation. Like they don't, I ize they, they use all the basic stuff. Maybe that makes sense for 'em. Right. So we look at, um, and, and a lot of CPAs have the [00:06:00] software that will actually run the analysis. Mm-Hmm. So you can say, Hey, mm-Hmm mm-Hmm. Hey, is it better to file separately? Especially if you're a physician, you're used to the income based repayment.
Um, rules they always wanna file separately. 'cause they want their resident salary, which is like 50 grand. Right. Only [00:06:15] pay their student loan on that part.
Sarah J. Hink: Right. Student loans is a huge part of that. Yeah. Mm-Hmm.
Jason Deshayes, CPA/PFS, CFP®, CKA®: And, and I think one of the other things someone who wants to be proactive in it, you can go online and you can get a transcript, um, for your, for your taxes every year.
You can go to the IRS's [00:06:30] website. You can create a, um mm-Hmm. A login. It's id.me and you can go on there and get. Transcripts of the income you make, you can get transcripts and account balances so you know exactly if you're on return, if there's any balances owed, and it's real clear. [00:06:45] And then you can make the exercise that each spouse does that.
Mm-Hmm. Right. And kind of just has that as part of their family file, as it were. And if you have any questions like, well, what's this thing?
Elizabeth A. Stephenson, MSW: Right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Then you go, oh, what's that thing now? Rather than when you go through discovery. Oh, Yik have that problem. [00:07:00] Yeah,
Elizabeth A. Stephenson, MSW: yeah, yeah. Because I'll show up in your credit report.
I'm a.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Or will it, does it? No, the credit report will have like debts.
Elizabeth A. Stephenson, MSW: Right.
Jason Deshayes, CPA/PFS, CFP®, CKA®: But not, they won't have any of the income items. They won't have like bank accounts or investment accounts that spin off. Right. But wouldn't, but if you owe
Elizabeth A. Stephenson, MSW: taxes won't show up on your It [00:07:15] should. If it,
Jason Deshayes, CPA/PFS, CFP®, CKA®: it should. If there was a, some sort of lien out.
Right. So if someone, if the iris put out a, a levy or on your bank account or a lean on your bank account, then yeah, they would show up in the account.
Sarah J. Hink: You don't want it to get that far. No.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Very hard to get the money back out from Yeah, exactly. You didn know [00:07:30] it.
Elizabeth A. Stephenson, MSW: So speaking of account. Um, you know, a lot of people, and I always tell people this, you need to have your own separate account.
Doesn't have to be not in secret, but you know, you got one, you wanna have some cash of your own. Yeah. And a lot of people have their own separate, then they have a joint account that they sort of [00:07:45] put in and, and put in. But a lot of times people do not know what accounts are out there, you know, and, and our job a lot of times is just going through one bank account and finding an account or looking on a pay stub and seeing where it's being direct deposited.[00:08:00]
What other tricks of the trade should people be looking for?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Yeah, that transcript's a good example of pulling what exists reported on like any income report under your social security number, so you can at least say bank accounts, investment accounts. The it's, it's [00:08:15] difficult because if something just is like a WA of cash and a non-interest period, account gonna show up anyway, but it's.
Is being aware of, like looking, looking at the check stubs, looking at bank statements and seeing where money is transferring left and right. Right. Because you'll see the like, oh, $5,000 went [00:08:30] somewhere.
Elizabeth A. Stephenson, MSW: Right.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Well wait, we're, I don't remember, $5,000 coming into these different accounts. So that's, that's the kind of stuff you have to look into and just be aware.
Mm-Hmm. Um, my wife handles a lot of our finances. Right. But she doesn't a way like. I still [00:08:45] have full transparency and everything, so I can go in and I look at stuff, just go, oh yeah, it's, that's right. That's, these things happened and she handles the day-to-Day, like where it all gets budgeted and everything.
Right, right, right. But that's where there's like a division of responsibility, but still an accountability would know [00:09:00] whether that number is Right. Right.
Sarah J. Hink: Yeah. And I, I think generational, it's changing a little bit with the separate accounts. I like my generation, a lot of people have those separate accounts and maintain them throughout.
Right,
Jason Deshayes, CPA/PFS, CFP®, CKA®: right.
Sarah J. Hink: The marriage and, you know, talk to my friends, a lot of them file separate. Married, right, [00:09:15] because of the student loan situation. So I think, you know, a generational, it is changing, but it is really important still to have those conversations and to know what's out there and, you know, look at the tax returns and if you're filing jointly, you're gonna see like the interest on these accounts.
Right? So like, okay, that exists. It's out there somewhere. Right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Well it, and it [00:09:30] is better than before when we didn't have interest on bank accounts. 'cause you could. Have lots of money and it still didn't produce enough interest. Mm-Hmm. Now actually things spend enough, enough interest that those accounts are probably productive again.
Right, right, right. They pop up on the transcripts now. Well, that's true. Now we
Sarah J. Hink: get to pay taxes on 'em. Yeah. Yeah. [00:09:45] Unfortunately,
Jason Deshayes, CPA/PFS, CFP®, CKA®: yeah. The government give it, the government's taking the
Sarah J. Hink: way. Yeah, for sure. Um, then when you come to the, the part where you are separating, and I mean, are there any conflicts for couples reaching out to you?
Both of them asking for information about their, their past [00:10:00] taxes? Um, I've had issues before where. You know, the accountant doesn't wanna speak to one party that they were technically employed by the other, but they're married and you're filing taxes together.
Jason Deshayes, CPA/PFS, CFP®, CKA®: So there are real strict conflict of interest guidelines in the CPA world.
You have to identify [00:10:15] those conflicts, and when someone's starting to get divorced, you have to then give everyone to either waive the conflict or someone has to say, you're my CPA and you're now not so-and-SO'S CPA. Okay. So they're that, that's when they get separate representation.
Elizabeth A. Stephenson, MSW: Mm-Hmm.
Jason Deshayes, CPA/PFS, CFP®, CKA®: The,
Elizabeth A. Stephenson, MSW: can they [00:10:30] still stay within the firm like ours can.
Yes. Well, that's what I mean, but no,
Jason Deshayes, CPA/PFS, CFP®, CKA®: yes and no. They, they can stay within the firm, but they still have to acknowledge the conflict. Right, right, right, right. 'cause they can say, oh yeah, so and so represents me, but technically the firm both employs them. [00:10:45] So I think that when people are looking at that, it gets into the, okay, maybe the best thing is you get two different people.
Right? Yeah. Right. And so then the, the, the kind of joint responsibility or the joint return. Was this accountant and then now [00:11:00] you have your own separate ones. They, none of them have history with you, but they also don't have a conflict from before saying, well you were really my client. 'cause you were the business owner that made the money.
Right? Yeah. And your wife or ex-wife is not really my client. I never saw her anyway. So I [00:11:15] kind of think just go start fresh. Yeah. Have a good time for that.
Elizabeth A. Stephenson, MSW: Can you share, um, documents. With the new CPA,
Jason Deshayes, CPA/PFS, CFP®, CKA®: as long as anyone like usually just requires a sign off process where you say, yeah, I disclose. You're allowed to disclose the information on my behalf, [00:11:30] or they'll.
Send you the records and the records go. Gotcha. You go from you to your attorney or your accountant. Mm-hmm. Right, right. So usually as long as you're being amicable and professional, the CPAs are happy to work with each other or those people, they're not in the, you know, oh, [00:11:45] they did that, you know, 10 years ago.
Right. Kind of business. But you can work well together still. Um, sometimes people have a really amicable divorce and they still use the same firm because they're like,
Elizabeth A. Stephenson, MSW: I've had that.
Jason Deshayes, CPA/PFS, CFP®, CKA®: I don't care that they're doing their life. This is fine. Yeah. They're doing this one. It's [00:12:00] just kind of. I don't know. I, I'd prefer, I think if that would happen to me, I'd be like, eh, let's go get a clean slate.
No matter how good the relationship is, I just need a clean break.
Sarah J. Hink: But in North Carolina you have the year long separation before you get Mm-Hmm. You know, the divorce judgment. So within that timeframe, a lot of people are [00:12:15] filing taxes and they've been separated for six months already. Yeah. And a lot of times it is beneficial to file jointly still.
So I mean, in that case, they're gonna use the same CPA. Yeah.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Right. It's hard to do. I'm not sure how you do a joint return with two different CPAs unless you had someone review it at Yeah. [00:12:30] Or before you filed. And I think that's where, you know, the situation is we have to do this like one last hurrah.
Let's just
Elizabeth A. Stephenson, MSW: Right. You know,
Jason Deshayes, CPA/PFS, CFP®, CKA®: make it work for us and usually it does work out better. Mm-Hmm.
Elizabeth A. Stephenson, MSW: Right.
Jason Deshayes, CPA/PFS, CFP®, CKA®: So it's, you just have to make sure you're going. [00:12:45] Be nice to each other just for that part. Yeah. And then sign it. Um. Sometimes they'll wanna see the analysis both ways though. So they'll say, okay, right.
File it. You we think filing joint, but show me, prove me to me that it's not better to file separately.
Elizabeth A. Stephenson, MSW: Right, right.
Jason Deshayes, CPA/PFS, CFP®, CKA®: And if they [00:13:00] file separately, then
Elizabeth A. Stephenson, MSW: that's right. And then, then we'll put that in our separation agreements or things about how they're gonna file taxes and yeah, what's gonna be more beneficial, who's gonna pay what tax of taxes owed?
And if
Sarah J. Hink: there's a house sold, you know, who's doing the capital gains on their taxes? All of those.
Jason Deshayes, CPA/PFS, CFP®, CKA®: I, I will say I [00:13:15] am always surprised at the number of divorce decrees I've seen. That have never been looked at before by any sort of accountant, um, or advisor financial person, because they're like, well, this is what it is, and they just kind of hand it to you and like, [00:13:30] did you, why did you do this this way?
And I don't knows what they suggested. I'm like, well, yeah, that's why, because it's terrible for you. And, but it's one of those, there's a lot of stuff in there and there's, you know, back when there was dependency exemptions, but like, who can claim [00:13:45] credits for the kids, right? Yeah. Right. Who's gonna claim credits for.
Future education for college students who gets the house, right? Who's gonna be entitled to those things? Do you get the retirement account? Mm-Hmm. Or do you get the brokerage account? Right. Right. And those are all, you know, yeah. They could be dollar [00:14:00] for dollar or equal, but if, if I was the spouse that's gonna get a bunch of assets and I got a choice between a half a million dollar brokerage account or a half a million dollar IRA, I'd definitely take the brokerage account.
Elizabeth A. Stephenson, MSW: Right. And I was gonna, that was gonna be my next question. So why, why is [00:14:15] that?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Well, so depending on how old you are. That IRA is gonna be maybe too early, right? Right. So if you're 45, the IRA is gonna be hard to get to without paying an extra penalty on top of the tax. Right. The brokerage account has no restrictions on [00:14:30] when you can take out timewise.
You may end up with different capital gains treatment or different kind of income treatment based on how it's invested, but generally it's gonna be a much more tax favorable account. Lot more flexibility, especially you have to go buy a house. Reset your [00:14:45] life up. That's money you can get to. Now if you're 65 and getting out is less of an issue, but still every dollar that comes out of a traditional IRA or retirement plan that's not a Roth tends to be taxable, which then that can add up pretty [00:15:00] quick.
Elizabeth A. Stephenson, MSW: Right. Yeah. So, yeah, and I think it depends on how old, you know, is that what you say, what your age is like? Yeah. 59
Jason Deshayes, CPA/PFS, CFP®, CKA®: and half's the magic number when, right. Mm-Hmm. You lose the penalty then, because
Elizabeth A. Stephenson, MSW: we see a lot of, I call it, people call it the grain of divorce, where people. Are already [00:15:15] retired, you know, and, and so they've been living on one retirement on that.
Now two gotta live on one and it makes it really difficult and challenging for people. Mm-hmm.
Jason Deshayes, CPA/PFS, CFP®, CKA®: And then you gotta think about things like social security, like how long were you married for? Mm-Hmm. Then could you, I mean that was like Johnny [00:15:30] Carson example where he was, he had three different ex-wives.
Right. Claiming half of his benefits. So they're paying out like one, two and a half times what he should have.
Elizabeth A. Stephenson, MSW: Right. But
Jason Deshayes, CPA/PFS, CFP®, CKA®: you know, those are the kind of things you got coordinate and just know about. Um, you know, the, with [00:15:45] children it's the dependency and the time. Much time like. Is it majority of the time.
Those are all the kind of things we look at. And just making sure you understand what you're getting into, and especially if you're the spouse that would say is not the primary earner Right. Or the, the less financially [00:16:00] sophisticated spouse. Mm-Hmm. They just get stuff in the right. I don't know what to do, what to do with, I don't know how to, I've never had to take money outta this thing.
I've just, we've just had money. Right. Right. And they just get really confused on how to do it. And it's now. Do they have to have that stretch longer than they [00:16:15] think? Right? [00:16:30] [00:16:45] [00:17:00] [00:17:15] we always try to send people to a financial advisor or something.
Elizabeth A. Stephenson, MSW: 'cause we'll do a, we'll get all the documents and we'll do a spreadsheet and we'll, we'll do it like, here's what we think is in your [00:17:30] best interest. Like you say, they don't, they're getting half a million dollars. They, they don't know what to do with it. I mean, you know, should I invest it? Yeah. Hopefully they're getting half a million dollars.
Not everybody, well, even a hundred thousand dollars, you know, and then I'm gonna, then we're gonna have to sell the house and I'll have [00:17:45] $250,000 plus this a hundred thousand dollars.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Mm-Hmm. So
Elizabeth A. Stephenson, MSW: can someone come and sit down with you? And say, here's what my, you know, here's what my attorney and I have talked about, about how to divide our assets and can you help them understand or say, I wouldn't do that.
I would do this instead.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Yeah, we're, we're a [00:18:00] little unique 'cause we're. Both a tax planning practice and a wealth management practice and financial planning. So we've got all that there. So we can look at the long haul saying, Hey, for you as a person in your financial plan, this makes sense, right? For your tax.
Immediately in the [00:18:15] long term, this makes sense or doesn't make sense. And we do that with clients all the time. And it's also good 'cause a lot of times we don't have that relationship that they're coming fresh and then you have fresh rise, right? Mm-Hmm. So it's really a, a kind of like a fresh look at your overall finances Anyway.
To make sure that you're being set up Correct. Correctly. Correctly,
Sarah J. Hink: [00:18:30] right. Yeah. 'cause I mean that that comes down to a lot of cases. Is cash in hand better for you, or do you want some more of the retirement funds to keep in there? And a lot of people don't know. They haven't even thought about it.
Jason Deshayes, CPA/PFS, CFP®, CKA®: No.
It's just, I mean, number, like we're worth half 5 million. I want two and a half. Like, or whatever that works. We,
Elizabeth A. Stephenson, MSW: [00:18:45] that's not how this works. But especially for like 30, 35, you're gonna think about retire. I mean,
Jason Deshayes, CPA/PFS, CFP®, CKA®: yeah.
Elizabeth A. Stephenson, MSW: You know, I mean, I've always heard cash is king. Maybe I'm wrong about that. I mean, ca
Jason Deshayes, CPA/PFS, CFP®, CKA®: cash is flexible, right?
That's right. It's fundable. You can use it for different reasons and purposes and everything, but. You know, it also depends if you're working or not. So if [00:19:00] you've got the situation where you were like, dinks, double income, no kids, right? And you're both working, then it's a little different than say, oh, I was the non working spouse that stayed at home.
Mm-Hmm, I need to live on child support or whatever, [00:19:15] you know, spousal agreement there is. But I've haven't worked in a long time. What do I do with myself now? Right. I can't rely on my ex's. Correct,
Elizabeth A. Stephenson, MSW: correct. Social
Jason Deshayes, CPA/PFS, CFP®, CKA®: security and all that stuff. Right.
Elizabeth A. Stephenson, MSW: Were you, were you here when alimony was taxable?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Oh yeah.
Yeah. [00:19:30]
Elizabeth A. Stephenson, MSW: That was always fun. That was,
Jason Deshayes, CPA/PFS, CFP®, CKA®: that was always one of the I was kind of surprised the president who specifically Yes. Changed that given the number of ex-spouses he has. But it, it was. Cleaner a little bit because it was like, [00:19:45] yeah, you get paid, you get deduction. There was a balance there. Right?
Right. And now it's just like,
Elizabeth A. Stephenson, MSW: now buy guy, you pay then get, you know, it gets no benefit whatsoever outta that. Well, some of those
Jason Deshayes, CPA/PFS, CFP®, CKA®: immuno alimony payments are pretty substantial. Yeah. They can be that just poof [00:20:00] goes yes and yeah. Yeah. Makes it, the tax part of divorce becomes really wonky then because you're out cash.
Mm-Hmm. And. You still have to pay tax as now a single person. Right. Which is a lot more Mm-Hmm. And so you go, okay. Well I used to [00:20:15] have cashflow wise from a day-to-Day purpose. Well, before I even get anything from my personal lifestyle, I've now written off. That's right. Check that goes. That's right.
There's a check that goes to the ex spouse. My tax bills higher and now I only have this much to live on. That makes it really hard. [00:20:30] And you're going, Hmm. I was thinking about buying a house instead Now I'm gonna get a one bedroom apartment. Correct. Mm-Hmm. In a not so nice part of town. 'cause that's all I can afford,
Elizabeth A. Stephenson, MSW: right?
Yeah. Right. So what happens with, um, again, this asked this question too, so it's alimony. What happens with alimony on your taxes that's paid to you now? Nothing.
Jason Deshayes, CPA/PFS, CFP®, CKA®: [00:20:45] Nothing. Just doesn't matter. It doesn't. Just free money to you. Right? Just free cash. Yeah.
Sarah J. Hink: Yeah, that seems so unfair to me. That was such a, a hard pill to swallow, swallow for a lot of people when it made that change before you could at least say, well, hey, you know, shield give the tax benefits, the receiving person will pay the, you know, the [00:21:00] taxes on that and, you know, you kind of negotiate a little bit easier,
Jason Deshayes, CPA/PFS, CFP®, CKA®: right?
Sarah J. Hink: Um, not so much. Not so much. But now we just don't, you know, mention it. It's like it never happened because what's the point? It just makes people upset.
Jason Deshayes, CPA/PFS, CFP®, CKA®: It makes it real hard to negotiate when you're like, you lose either way. [00:21:15]
Elizabeth A. Stephenson, MSW: Sorry. Yeah, that's exactly right. Yeah. So what else should people getting divorced or thinking about separation do as a pre-planning stage?
I would
Jason Deshayes, CPA/PFS, CFP®, CKA®: look at all the stuff you do know about, Mm-Hmm mm-Hmm. Bank accounts credit cards, retirement [00:21:30] accounts, and figure out what are, how they're titled and who the beneficiaries are. I've seen many times where the ex-spouse is still on a retirement plan, so they kept working it. Whatever place for the next 10 years, and they [00:21:45] never update their beneficiary to a family member.
Their children, I mean, their children may be in the contingent beneficiary, but then, right. The ex-spouse is still the primary and that overrules a lot of things. Right? So you need to make sure you do a kind of clean house postmortem [00:22:00] and, okay, if this is happening, we gotta change
Elizabeth A. Stephenson, MSW: Right.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Beneficiaries across the board life insurance policies and Right, right.
All that stuff. And just make sure that doesn't get forgotten about. Because it's not, you know, top of mind to go update your corporate benefits and such, but it's important to do it. Mm-Hmm.
Elizabeth A. Stephenson, MSW: And a lot of, there's [00:22:15] some that won't let you do it unless you're divorced, you know, or, and some will let you do it.
Like I had, I had to put a stop to the mediation because he had changed all the beneficiaries, you know, and not told anyone. And it just seemed [00:22:30] so, I don't know, not. In good faith sort thing? Well,
Jason Deshayes, CPA/PFS, CFP®, CKA®: typically the, if you change your beneficiary from your spouse, the spouse has to consent. That's usually what I thought.
Notarize it and everything. Right, right. That's why we,
Sarah J. Hink: we include that language and separation agreements should agreements, um, to put in [00:22:45] their waiver right, of any of those, or you can't change it as long
Elizabeth A. Stephenson, MSW: as you're paying alimony or child support, you're gonna keep me as beneficiary kind of thing. So
Jason Deshayes, CPA/PFS, CFP®, CKA®: there, there's that.
There's also make sure the accounts are titled right, so if it's in a trust or if it's in your name or joint names, that all that gets [00:23:00] cleaned up. So there's not. Some leftover expectation of, oh yeah, you still own that, or you still on that debt so you can pay it for it. Right. 'cause
Elizabeth A. Stephenson, MSW: a lot of people are putting like their houses and things in a, in a, like a family trust.
Mm-Hmm. Just for tax benefit purposes. And they [00:23:15] don't, they don't think about that. And it gets kind of tricky sometimes.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Yeah. It's, it's just making sure you know who owns what, what. Right. And, and I always, I mean, it's kind of fun to read the divorce decrees and scene. These are the assets that so and so owns, you know, it's, it's like, okay.
You wanna make sure that lines up and then [00:23:30] afterwards that there's the other person's nowhere on it unless it's required to.
Elizabeth A. Stephenson, MSW: Right, right, right. Exactly. Exactly. Yeah. So what, um. I always think of CPAs and don't take this the wrong way.
Jason Deshayes, CPA/PFS, CFP®, CKA®: I won't, I think I know where you're going with with this. [00:23:45]
Elizabeth A. Stephenson, MSW: We have a lot of juicy stories.
Yeah. But think about what people say about us if you don't take
Sarah J. Hink: it
Jason Deshayes, CPA/PFS, CFP®, CKA®: seriously. So,
Elizabeth A. Stephenson, MSW: so I mean, if somebody comes to you and it's really not on that topic, but they'll say they don't have a lot of money. They only got like $50,000. A lot of people don't [00:24:00] feel like they need a financial advisor. Oh, I don't have enough money to go.
See somebody, is there a threshold or what would you say to that?
Jason Deshayes, CPA/PFS, CFP®, CKA®: You know, every firm's a little different. So like some firms it's lower, right? Because of their fee structure, their staff structure, and sometimes they don't have thems at all. [00:24:15] So if you go to one of those retail branches of like a Schwab or a Edward Jones, they usually have minimal minimums or nothing.
Okay. And so you may be able to talk with someone once a year and all is good. Generally, if you're gonna go into someone who's more in financial plan that's like, like we are. [00:24:30] They're gonna have higher minimums because to do the work they do, right. That you have to have something to work with. Right.
Otherwise it gets, it's, the fee to them is too low and it's too high for you and doesn't make sense. Right, right. It's like our fees approximately half a million is with the, the kind [00:24:45] of management we want to work with. We'll always make exceptions if it's the right case, but we also. Don't do our best work for someone who has $50,000.
'cause generally at that point it's like, just keep the course. Right. Right. Keep invested, make these things and they [00:25:00] know move on. But it's not, we don't want to tell someone like, oh, we gotta do this crazy financial plan for you. If you make, if you have $50,000 and you make $75,000 a year, there's not a lot of planning in there than just good habits you just need to keep doing.
Right.
Sarah J. Hink: Yeah. And that's [00:25:15] huge is having those good habits. 'cause like you said before, there's a lot of, you know, stay at home mothers who come out of a separation and divorce and they are getting retirement accounts, part of it, but it's still only like a hundred thousand dollars. And at that time I tell 'em, you know, you have no retirement otherwise, like [00:25:30] if you can keep that there, keep that.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Right, right. And
Sarah J. Hink: you know, that's why we try to form their. You know, decree or whatever the agreement is on separating those assets and something that they can have savings, retirement, and some kind of cash flow, right? And just [00:25:45] figuring out that balance until you get back on your feet, which is gonna take a couple of years for sure.
At least. Yeah. But I mean, there's. Women and men who come out of these relationships and they've been the stay at home parent and they only have, you know, in their head like 10 more years left of [00:26:00] work and like reentering the workforce. Mm-Hmm. In their mid forties, late forties. And they have nothing.
So it's really hard. So if you're listening out there and you know, you don't make the threshold for financial planning, like. Go get some information. Yeah. There's information online, I'm sure. Right. Your website has information and just become knowledgeable about the [00:26:15] differences in retirement and, you know, cash and how to do the investments and you know, what to, you know, get a new car, what interest rate and like think about that and maybe I need a used car.
Yeah, exactly. You know, as, as little miles as I can [00:26:30] find for, you know, $20,000 and not have that car payment would be more beneficial to you and take the time to learn that.
Jason Deshayes, CPA/PFS, CFP®, CKA®: And there's so many situations where someone. Didn't care for their spouse in that way, like when before they died or got divorced.
So the, it was just, it's hard to [00:26:45] see people who are like, you should be able to retire soon. But you can't. Can't, yeah, exactly. Because your spouse died, your spouse D got divorced and left you with a bad deal and you've have been dealt a bad hand. That's hard [00:27:00] to see. There's not a lot to do to fix it beyond, there's, beyond, beyond.
Just work harder and, right. You know, retirement looks different now than before, and may not happen as soon as you'd like it to. Yeah. Right. But you just have to kind of make, do with what you've got and, and especially if you're the, [00:27:15] like the stay at home spouse and your, your spouse made a lot of money.
Saw this years and years ago with a dentist and his wife, who they were married for 12 years and he made great money. She did not. Right. And she didn't work for most of that time. And so now what is she gonna [00:27:30] do? She didn't have a, a hiring career beforehand. Right? So she can't like go back to that, right?
She was like a school teacher.
Elizabeth A. Stephenson, MSW: Right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: And so there's only so much you can do when those are the situations you either gotta change your life and get a new career path and do something different. And, [00:27:45] but that's not good. E that's not gonna be easy. No, no. It's, but it's gonna be what you have to do. Be
Elizabeth A. Stephenson, MSW: stressful.
Yeah. And we work with a lot of like, closely held businesses. Like, and I'll take for example, like a dentist office or a doctor's office generally. A lot of times the wife was the practice manager. Exactly. And so now [00:28:00] we gotta divide the bus. Husband gets the business and so she really is out of a job and has no marketable skills.
So it's gets a little tricky. Yeah. And then other people are
Sarah J. Hink: surprised when they think our, their spouse makes a lot of money. But to come to find out that it's not really there and it's like, well wait a second. I thought he made like [00:28:15] $200,000 a year. And maybe he does, but it's gone. Gone. We're to go and there's a bunch of debt.
Like how did that happen? Well, you know, you should have asked that question a while ago.
Jason Deshayes, CPA/PFS, CFP®, CKA®: When you start seeing like cars show up or toys. Mm-Hmm.
Elizabeth A. Stephenson, MSW: Correct.
Jason Deshayes, CPA/PFS, CFP®, CKA®: Motorcycles. Really nice stuff. [00:28:30] And you look at your tax return and go, we make this much. Mm-Hmm. Our house and lifestyle is this much. We go to the country club, some things not add up because this
Elizabeth A. Stephenson, MSW: costs
Jason Deshayes, CPA/PFS, CFP®, CKA®: money and there's not enough of it.
And that's the part where a lot of people just kind of like to put their blinders on and. Live their [00:28:45] life. Right. Sometimes
Elizabeth A. Stephenson, MSW: it's better. It's like you don't wanna know, you know what you don't know will hurt you. Well here. Well, which is not true. And
Sarah J. Hink: then years later you don't have a passport. Yeah. You're like,
Jason Deshayes, CPA/PFS, CFP®, CKA®: man, the hope that I enjoyed that country club experience, that was the best time I was and [00:29:00] that's the best I've ever
Sarah J. Hink: had.
$5 in your savings account. Okay. You get $2 and 50 cents, he gets $2 and 50 cents.
Jason Deshayes, CPA/PFS, CFP®, CKA®: We're gonna split that. Get the quarter, get the quarters out, and put 'em on the table.
Elizabeth A. Stephenson, MSW: Yeah. So, so what, um, what services does. Wealth management. What do you guys provide?
Jason Deshayes, CPA/PFS, CFP®, CKA®: So we [00:29:15] do tax plan and preparation. That's the, the tax side of the business.
Okay. And so that's really coaching people how to handle their money. Well pay their taxes right. But not be overly aggressive. Also not miss things when they could plan better. The bulk [00:29:30] of our business is on the financial plan side, where we take an integrated approach where we do incorporate tax planning into that approach.
'cause it's a huge part of every investment decision, every financial decision. And then we will, we have an ongoing service calendar. So we talk with our clients on a regular [00:29:45] basis. We're not just like, Hey, see you once a year. Right? We'll hit the rebalance button. We wanna build the relationship.
Understand your kids, understand your intentions in life, because that's the part where, hey, I'd rather have a client for 20 years. Right? And know that we help them navigate [00:30:00] that or not. And then just see that success from that Mm-Hmm. And see it in the next generation. And we've seen that with a lot of our clients.
Love. We're like now seeing the adult children. Having their life set up and go, okay, mom helped 'em with this and then
Elizabeth A. Stephenson, MSW: Right,
Jason Deshayes, CPA/PFS, CFP®, CKA®: they did this next. It's really [00:30:15] cool to see that kind of long term. That's great. Yeah. To see it
Elizabeth A. Stephenson, MSW: come full circle
Jason Deshayes, CPA/PFS, CFP®, CKA®: like that. That's awesome. It's, we have one family, I think we are on, we have three generations of the family.
We have, we have one we're waiting for one of the grandkids to have the one kid, and we can say we have four. But, um, love that. [00:30:30] But it's really neat to see kind of how those family legacies play out. Right. And it doesn't have to be someone who's like. Insanely wealthy either,
Joe Woolworth: right?
Jason Deshayes, CPA/PFS, CFP®, CKA®: Someone could have a million dollars and that is a lot of money, but it's not what I would say like crazy.
Well, big wealth, right? It's not big money where [00:30:45] you don't have to worry about what's happening tomorrow, right? Yeah. It's enough to say, Hey, I wanna make sure that my kids understand how I lived, how I gave money away, how I want them to kind of see that, and you can help translate that so that those kids and those other generations [00:31:00] learn from that or.
In situations like we've been talking about, like help people through those hard times, right? Where yeah, we got 'em out of this divorce, we got 'em through the divorce, right. And helped 'em through it, and they became better for it afterwards because mm-Hmm. I mean, your guys' podcast, you go from bitter to better, right?
Right. So you [00:31:15] wanna help navigate them in that direction, so it moves positively. You don't want people feeling like, yeah, I'm, every time I sign this tax return, or Right. Look at my financial plan, I'm just pissed. Right? No one wants, or I
Elizabeth A. Stephenson, MSW: don't wanna know because they're just so scared. Yeah. Yeah.
Jason Deshayes, CPA/PFS, CFP®, CKA®: There's, there's definitely times we've had conversations [00:31:30] with clients where they go.
Oh, when she, when I have this done, I can get her off that thing. I'm gonna be so happy. I'm like. I don't want that. I don't want their clients to have to. I want 'em to say, okay, we made a plan, we moved forward and we did well. Right, right.
Sarah J. Hink: So if you're out there listening [00:31:45] and you want information, you check them out online and of course like whether you're single in your next relationship, talk about your finances, talk about taxes, and seek out professional help because it is worth it.
For sure. I
Elizabeth A. Stephenson, MSW: agree. How can people get in touch with you guys?
Jason Deshayes, CPA/PFS, CFP®, CKA®: They can go our website, cook [00:32:00] wealth.com. Then call our office (919) 784-9100. Perfect. And
Elizabeth A. Stephenson, MSW: I'm assuming y'all do things virtually. We don't have to come in person and make it easy for, man. I got
Jason Deshayes, CPA/PFS, CFP®, CKA®: local people. I still, zebra. I haven't physically met some of them thanks to Covid.
Yeah, we, we can service people nationally, [00:32:15] locally, whatever works for folks for you.
Elizabeth A. Stephenson, MSW: Well, thank you so much for coming. Thanks for having me. I've learned a lot there and there's still
Sarah J. Hink: so much to learn. I know, I know. Yeah, we don't do it. You've gotta learn it. I agree. So, yeah. Ain't that some shit? [00:32:30] [00:32:45]