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In this episode of A Year and a Day, Jaime Davis talks with Donna Jean Kendrick, a certified financial planner, to unpack the financial side of divorce that the legal side can overshadow. Donna, author of The Divorce Money Map, walks listeners through building a clear picture of assets, debts, and expenses before negotiations even begin. She explains why financial preparedness isn't about being a numbers person; it's about knowing where to look and who to ask.
In this episode, Jaime and Donna dig into some of the thorniest financial decisions divorcing couples face:
- How to map out what you own, what you owe, and what you need to ask for during discovery
- The difference between basic living expenses and lifestyle expenses, and why it matters for negotiations
- What to weigh before deciding to keep or sell the family home, including equity, maintenance costs, and capital gains exposure
- Why alimony and child support aren't as guaranteed as people assume, and how to protect against the gaps
- How to rebuild a sustainable financial life after the divorce is final
- Why assembling a trusted team of professionals is essential
Donna draws on her own experience as a widow who discovered just how costly it can be to not ask enough questions about a spouse's investments, offering a candid look at why financial literacy matters. Practical, empathetic, and refreshingly jargon-free, this episode is essential listening for anyone trying to protect their financial future during, and after, divorce.
Creators and Guests
What is A Year and a Day: Divorce Without Destruction?
Board-certified family law attorney Jaime Davis and her guests provide information and tips for getting through a separation and divorce without destroying family relationships or finances. From marriage therapists and financial planners to private investigators and parenting coordinators, learn how to navigate divorce without destruction.
Jaime Davis: Welcome to A Year and a Day.
I'm Jaime Davis, board-certified
family law attorney at Gailor Hunt.
On this show, I talk with lawyers,
psychologists, and other experts
with the goal of helping you
navigate divorce without destruction.
My guest today is Donna Kendrick,
a certified financial planner and
certified divorce financial analyst,
and the founder of Septum Financial.
Donna specializes in financial planning
for families in transition, and she is
the author of The Divorce Money Map:
Taking Control of Your Finances Before,
During, and After Divorce, as well as A
Guide for Blended Families: Merging Assets
and Navigating Financial Challenges.
Her expertise sits at the intersection of
financial strategy and major life change.
Divorce comes with a flood of legal
questions, but it also comes with
financial ones that are just as
high-stakes and often just as confusing.
What happens to the house?
How do you evaluate a settlement offer?
What does your financial life
look like on the other side?
Donna works with individuals every
day who are navigating exactly these
questions, and she's here to help
you think about your finances, not
just for the divorce itself, but
for the life that comes after it.
Thanks for joining me, Donna.
Donna Jean Kendrick: Thank
you for having me, Jaime.
It's a pleasure.
Jaime Davis: So Donna, you work
with a lot of people who come to you
mid-divorce, often after major financial
decisions have already been made.
When you think about financial readiness
for divorce, what does it actually mean
to be prepared before the process begins?
Donna Jean Kendrick: Yeah, that's a lot
of what The Divorce Money Map is about,
and it's literally about making sure that
you understand on a financial spreadsheet,
right, but maybe just paper, right?
If you're making a map, a visual map
of where all of your assets are, what
do you own, what do you owe, right?
What's in your name?
What's not?
What's held jointly?
What is that?
And do you have an understanding of it?
We know that in relationships
there's usually one person that takes
care of the finances or one person
that might be financial savvy and
the other one might just be like,
"Yeah, do whatever," be trusting.
So The Divorce Money Map is a way to go
from left to right, page by page, and
really understand if I'm not the one with
the financial strength, if I'm not the
one that has all the education, how do
I find out the answers to what I need?
What do I need to lean in with my attorney
to go get during disclosure, right?
What don't I know?
Um, and it's almost like a smooth way
to say, "Okay, I don't know what I don't
know, but if I start on page one and I
go all the way through, this will help
me." In a workbook type of situation
to just say, "Okay, let me identify.
What do I own?
What did I own before the marriage?
What do I own now," right?
And then you can highlight those
question marks and sit with your
attorney and- or if you have a good
relationship with your soon to be
ex-spouse, sit together and try to figure
out if you can find that information.
Jaime Davis: I love that.
You make such a great point.
It is so true that during a marriage
people just establish different roles,
and just because you've maybe did
not have the financial role during
the marriage, it doesn't mean you
can't do it and you can't learn it.
That just wasn't your job while
the two of you were together.
Donna Jean Kendrick: Exactly.
And for so many of the, of the women and
men that I work with who are approaching
divorce, right, they've gotten to a point
where they're like, "Wow, I, I didn't
even know they had a pension," right?
Or, "I don't know how they're invested
in the 401or 403. I know they have
one." But how you're invested within
is really important, too, right?
Like is it doing well in the market?
Is it all like buried
underneath the, the mattress?
Where is it?
Um, these are some really good
points to just know so that when
you are on your own- Now you're
building that financial education.
I hate when people are like,
"I feel so stupid," right?
Or, "I'm so unprepared."
Or they're apologizing for
not knowing where things are.
I'm like, oh, my gosh, just stop.
You're here where you are now.
Now we're learning.
Now we're getting control of it.
Now you know if you like controlling it or
not, and if you don't, lean in to a money
manager, lean in to a financial planner,
and lean in to someone who can help you.
Um, but it's okay to just start peeling
the onion slowly and figuring it out.
It's- it's all about pacing yourself.
Most people going through a divorce
are in a highly emotional state, right?
There's grief, there's
anxiety, there's anticipation.
We just sometimes have to just
deal with the numbers, right?
I'm a statistician by trade,
and I think math is very safe
in my mind it's non-emotional,
but it actually is in divorce.
Jaime Davis: Yeah.
That- that's interesting you say that.
That's something I say to my clients
during mediations, consultations, you
know, w- we don't cry over numbers.
If you wanna cry about your children
or the loss of your marriage
or whatever other big emotions
you're feeling, that's great.
But we don't cry about numbers
'cause those we can figure out.
Donna Jean Kendrick: Yeah, exactly
it, and- and truly understanding your
strength and where you sit right now.
Where did you sit before the marriage?
Where do you sit currently?
And then a reasonable expectation of
maybe where we're gonna be afterwards,
and then how do we address the new
charges of life, our new rent, our new
mortgage, our new cost of healthcare?
How is that going to work
from before to after?
Jaime Davis: So your book, The Divorce
Money Map, frames the financial
picture as something that spans
before, during, and after divorce.
Walk us through that arc. How do
the three phases of divorce finances
differ from each other in terms of
what you need to be thinking about?
Donna Jean Kendrick: Yeah, definitely.
In the very beginning, you wanna, uh, just
like we just mentioned, you wanna identify
what do I own, what do I owe, right?
And that's what we would kinda
call the balance sheet if you're
talking about accounting, right?
Like, just very general of if I
have on the left side of the page
everything I own that's in my name,
what's in the name of my spouse, what
do I have that's in his or her name.
As well as what do we owe?
What's the mortgage?
What's the car?
What are the loans, the
credit cards in my name?
I always encourage people to go run their
credit report, annualcreditreport.com,
just to see really and truly
what's opened in your name.
What-- Sometimes, sadly, in divorce,
credit card accounts are opened
without permission of the other spouse,
and you don't even know about them
till you pull that credit report.
Um, or maybe we've just forgot about them.
Maybe we'll say that, right?
So maybe you just forgot
that you opened that one.
And so really taking that as a starting
point, especially if you don't know
where things are, if you weren't
the one who managed the finances,
that's a great starting point,
going to annualcreditreport.com.
You can pull a free copy of your
credit report and sit down there
and then start filling in the
blanks of what I own and what I owe.
The other thing that you wanna look at
is what is the cost of living, right?
What do we have in mortgage?
What does it cost me monthly to be me?
And there's a big difference between basic
living expenses and lifestyle expenses.
That's the haves, the
needs, and the wants.
So in the pages of the Divorce Money
Map®, they're gonna take you through that.
So you can identify, okay, I'm gonna
highlight this is the basic living
expense I need to not put money onto
credit cards, to be able to pay the
mortgage, to be able to keep the house
afloat, to understand the insurances.
As well as what are the benefits I have?
What are the benefits that my spouse has?
Whose benefits are we running right now,
and is that going to change post-divorce?
By identifying all of these
pieces, that's where you can
start some of those negotiations.
Like, "Ooh, I won't be on your
health insurance, so maybe we're
gonna take a little bit more equity
from the house settlement to help me
fund out-of-pocket medical expenses
if I'm not employed at this moment
and I have to go get another job."
Things like that.
So that's a lot of it is the pre-work, and
the Divorce Money Map® is there so that
you can sit with your attorney and say,
"Okay, this is everything I know," right?
"This is everything I've got." Because
many of times we have our attorneys
that are like, you come to the table
and you're not really prepared.
Like you're asking them for the direction.
This is coming with a little bit of an
understanding of exactly where the money
is, where we have questions, and what
we wanna do The big part of The Divorce
Money Map, too, is knowing that you are
probably in a big emotional state, right?
And you are good at what you're good at.
You're good at your career, you're good
at raising your kids, you're good at
being a volunteer, you're good at cooking.
Who knows?
You might not be good at
managing your money, right?
Or you might not be good at sitting
through divorce negotiations.
You might not be good at understanding
how to help your kids with therapy.
The Divorce Money Map will actually
give you interview questions
to sit down and use if you're
interviewing a divorce attorney.
Are you interviewing a financial advisor?
Are you interviewing an accountant?
And there's three or four sets of
those questions and those pages built
into the workbook, so everything's
in one spot, and you can actually use
those as a guide or lean into maybe
your trusted best friend that's going
to help you find these professionals.
They can do some of those interviews and
then give you their top recommendations.
Your plate might be full at the moment.
That's a lot of what the pre-work is.
In the middle of the divorce
settlement, well, that's where your
divorce attorney leans in, right?
That's when they're actually saying,
"All right, we did discovery, right?
Thank you for everything you wrote
down in The Divorce Money Map.
We've asked for it.
We have the financial statements."
This is when some of the negotiation
takes place, and this is where you have
to actually say, "Okay, post-divorce,
what is it going to cost me?
Am I keeping the house?
Can I afford to keep the house?
Do I have to pay rent on my own?
Do I have to pay that healthcare?"
So that you can kind of compare, what
do I have coming in post-divorce?
What, what I have coming out, how much
of my money is liquid, and how much of
it might be tied up into retirement that
I need to help support a retirement,
especially if it was a long marriage.
And then you have the post-divorce pages,
which are duplicates, I will say, of the
pre-divorce pages because now it's you.
And it's so important for me, and
that's where I really lean in with a
lot of my clients, is that post-divorce.
It's okay.
This is you now.
This is your new financial picture.
I know it's hard, right?
I know there's emotion still in
there, but we've hit the ending point.
The divorce has happened.
Where do we go next, right?
And that's where a lot of
the processing takes place.
Some of the decisions my divorcees
make post-divorce feel very
different a year or two later.
You know, some of the
emotions have settled.
Life has changed.
They've sold the house.
Maybe they moved to a
different state, got a new job.
So this is where the education takes
part, especially for those that weren't
savvy in the, in the finances of
how do we do this on a daily basis?
How do we set up a spending plan?
Where's the best use of money?
How much do we keep in reserve?
How much can we afford for college?
Things like that, and that's
where we kind of take off There's
pages within to dream a little.
Most people, I'm like,
"Leave those alone." Right?
Let everything settle.
Let the divorce settle.
Let the emotions settle, and then give
yourself the ability to dream again.
Maybe write down your three-year goal,
five-year goal, your 10-year goal, right?
And then look back a year later and
be like, "Huh, still the same. Am I
on my way?" I really believe sometimes
those intentions of a direction I
wanna take is really guiding when
we start talking post-divorce.
Where is our money taking us?
Where's our emotion taking us?
And where's life gonna take us now?
Jaime Davis: This is why the planning is
so important, um, and the negotiations are
crucial because you wanna make sure that
you are setting yourself up for that best
second chapter that you can have after
the divorce, and you wanna make sure that
you are not making any rash decisions
that you are going to regret later.
For some folks, this may be all the
money that they're gonna have, and so
they need to make sure that they're
getting as much as they can out of their
divorce settlement so that they are not
only comfortable, but able to do the
things that they wanna do post-divorce.
Donna Jean Kendrick: Yeah.
And that's a lot of the
planning part, right?
So we call it goal-based planning, right?
So we know where the money might be, we
know the assets that we have, but what
goals are we trying to support, right?
Is it really… Everyone has
a different set of goals.
For some people, they fully wanna
educate their kids and make sure
their kids don't have loans.
Other people are like, "Heck no.
I lived in a great school
district, paid those school taxes.
It's up to them to take
student loans for their name.
If there's anything left over when I
pass, they can pay off their loans.
Have a great day."
Neither are wrong, right?
It's just the goals that you have.
And so for financial advisors and
the divorce attorneys and even the
accountants to sit down and ask
those clients, "What are your goals?"
Right?
Now, yes, we're not therapists, right?
But we want to be there, and
we want to be able to know what
is the end game here, right?
Because numbers are numbers, right?
But what are we trying to answer?
What are these goals
that we want to achieve?
And there's really only three answers.
You can spend less, you can
work longer, you can save more.
Those are the three levers that have
to move forward, and that's a little
bit of an emotional decision, right?
Which of these three levers
are you willing to pull at this
time to make these goals happen?
Difference between wants, needs,
and desires, three different things.
Jaime Davis: Oh, absolutely.
And speaking of emotionally charged
decisions, one of the most emotional
decisions in any divorce can be what
happens to that family home How do you
help clients work through the keep the
house versus sell the house decision,
and what financial factors do people most
often overlook in making that decision?
Donna Jean Kendrick: Yeah, so there's
a huge section in The Divorce Money
Map, like, and it's called Should
I Stay or Should I Go, right?
And that is where I see the
most pause or hesitation in
accepting divorce settlements
or moving forward with divorce.
I believe some people stay in marriages
much longer than they emotionally
want to because of the house, right?
Or because of keeping the
kids in their family home.
I want them to come back from
college and have their home, right?
But there's considerations.
One, if you've had a long marriage,
there's a lot of equity probably
built up into your home, and you wanna
then consider, how much liquid cash
do I have post-divorce settlement?
If I keep this house, there's no
payout to me for the value of the
house, then really, how much cash
do I have for a rainy day fund?
We always say for our divorcees,
trying to keep six months of
what you need in liquid savings.
That means a savings account, a checking
account, maybe a CD if you can break it
without fees, high-yield savings funds.
Six months, 'cause you're on your own.
Like, COVID could happen again.
You could lose your job, and we want
you to be able to support yourself
'cause you make better decisions
when you're not in financial stress.
If you have six months of what
you need put aside, okay, breathe.
Next decision.
So how much liquid cash is available?
For many couples, the availability of
liquid cash comes with selling the home.
The other part a lot of, uh, my
divorcees don't take into consideration
is the maintenance of the home.
How old is the roof?
How old is the hot water heater?
Was your spouse that just
moved out the handy one?
I'm married a second time.
I was widowed in 2013, and I married a
carpenter, and I'm like, "Oh, my gosh,
ladies who are going out there on the
divorce apps, right, must be good with
power tools." It's amazing, right?
Like, it's amazing that he can fix the
things in the house that w- I needed
'cause in 10 years of widowhood,
I always had to hire out, right?
So I'm trying to encourage
that that is part of that how
much will it cost me to be me.
That's a basic need post-divorce,
the ability to have funds
for the house maintenance.
Taxes.
Taxes are great, right?
They help us all live in safe
neighborhoods and the whole bit, but
maybe when your kids are out of school,
you might not to me- need to be in this
district for the high school taxes, right?
That's something to consider.
And the other part is even I remember
from my mom's own divorce back in the
'80s, she didn't have enough income
to qualify on a mortgage on her own.
She just didn't.
Uh, she's lucky enough she could
have an account in her own name
at that point in time, right?
So can you even qualify for a
mortgage to go buy out the other half?
When we have some of our clients
with younger kids, the family home
is really important because you want
to keep them in the school district.
You're trying to limit the disruption
within the kids' lives, right?
And that could be very hard, and
that could be part of a negotiation
that you have to make with the
other spouse or something that you
just have to come to terms with.
We just can't afford to live
separately and keep the house,
so we're going to have to sell.
Jaime Davis: And I know that an issue
we've been seeing, you know, in the
past couple of years is that folks
had really low interest rates on
their mortgages, and now if they're
in a situation where they're having
to refi that mortgage to get their
spouse off, they no longer are going
to have that sweet rate that they had.
And so it may no longer be affordable just
by virtue of the fact that you may have
a higher interest rate moving forward.
Donna Jean Kendrick: 100%.
You're going to have a
higher interest rate.
Most likely, you're now, if you're buying
out a spouse, your mortgage is just higher
'cause it, 'cause half the value of the
house is now on your mortgage, right?
And you're not used to that.
You're used to the mortgage that we
got in 1999, right, still being at
maybe 2, 3%, and the value of the
house that we bought was 200,000.
Now that house is selling for 6.
And again, I always say
lean into your accountant.
I'm not an attorney.
I'm not an accountant.
But there's something called
long-term capital gains on gain
that you've had in the house, right?
And so should you have value of
the house, there's an exemption for
about 250,000 per person, right?
So okay, let's say you buy out your
spouse, and then three years later you're
going to go ahead and sell this house.
You might not be able to qualify for
that exemption on the long-term capital
gains on the growth because now you've
owned the house just in your own name.
Spouse is gone.
You can't use his or her 250.
So the power of 500,000 of long-term
capital gains exclusion goes
away because you've not taken it.
You've held onto the house.
It's a big thing.
Jaime Davis: Yeah, I think the most
important thing for people to remember
is there's so much more to this
than you just wanna keep the house.
There really are all of these moving
parts, taxes, mortgages, expenses,
all of the things that you have
to consider when deciding do you
really wanna keep that house or not.
Donna Jean Kendrick: Yeah, and what
I've heard recently in reference
to your very brilliant point of,
ooh, like our generation that might
be getting divorced is very used
to some low interest rates, right?
And a lower value of the house.
Jaime Davis: Yeah.
Donna Jean Kendrick: And so we've
seen some creative settlements saying,
"Okay, you get to stay in the house
until the kids are out of college.
We're gonna keep it as is.
We will sell it and split
afterwards, but you can't cohabitate
with anyone else in this house.
And if you do, we immediately go to sell."
That's very limiting on someone's
ability to move forward in
their next relationship.
Jaime Davis: Right.
Donna Jean Kendrick: And it could
be completely fair, but it's being
worked into a lot of settlements
that I'm seeing recently because
of those low interest rates.
Like, who knew our ability to get
married again and move in together was
going to be limited by the financial
settlement of our divorce five
years before if the kids are young.
It's something really big
to negotiate or consider.
Jaime Davis: Absolutely.
So for individuals who've been out of
the workforce, o- or who have deferred
to a spouse on financial decisions,
they often face a steep learning curve.
How do you address financial confidence
and literacy with clients who are
starting from a place of uncertainty
and feeling behind in the process?
Donna Jean Kendrick: Yeah.
We call it starting from scratch, right?
And I often will sit there and
thank goodness I am who I am.
I'm very lucky that I pretty much wake
up happy and ready to go each day.
And so if I'm sitting on a Zoom or
sitting next to a client, I actually
ask them, "How much do you know?
How savvy?
Do you like finances?
Do you not?
Does it give you the willies?
Like, how does it feel for you?" We're
asking those questions of, "Tell me
who makes the decisions in the house.
Tell me who-- how did you get
this credit card?" There's
almost a story behind everything.
Again, let's go back to
pulling that credit report.
For me, it's a bunch of numbers,
it's a bunch of accounts.
We're looking at late payments,
we're looking at percentage
of, of available credit used.
We're looking at those.
But it's also different to sit
down and be like, "Hey, when did
you get this credit card?" Right?
And if someone tells me, "Oh, I got
a free T-shirt in college, that's
how I got that credit card," now I'm
knowing they're not looking at interest
rates or if there's points, right?
Any of these credit cards, do you use
that to support vacations with your kids?
I have my very own podcast, and we
interviewed a woman that helps widows
and widowers use points to go on
vacation in the first year of widowhood.
It's amazing little system she has going.
Like, so hey, do you know about that?
Like, to one of my clients,
are you savvy enough?
A lot of what we need to then
understand is, okay, maybe
they are starting from scratch.
So I'm not gonna use jargon.
I'm not gonna use the word
IRA, RMD, diversification.
I'm gonna actually start with a
whole lot of these are the basic
words we're gonna be talking
about and this is what it means.
And I need you to slow me down.
I'm from Philadelphia, I talk very fast.
I need you to slow me down
if I ever go over something.
Don't smile and nod and be like, "I don't
know what the heck she said," right?
Stop me.
In the Divorce Money Map, we have a
glossary of most used words, right?
So if you are sitting there with a Money
Map and you're interviewing divorce
attorneys, read those words first
because I guarantee a divorce attorney
that's savvy enough to start talking
about your finances, because that's
the big part of most divorces, right,
will be using some of these words.
Don't let it go over your head.
Like bring it into the basics And I think
a lot of it too is for people that are
coming to me many of times when they're
almost at the point of saying yes to
a divorce settlement, for some reason
Jaime Davis: that's when
they come, not earlier on.
Donna Jean Kendrick: We're really starting
of, okay, we're almost at the macro part.
We're at the big ends.
Like, this is the, this is the blimp
flying over the football stadium.
This is where we are.
Once we say yes to this, then we
have to start with the education.
We have to start with the, okay, here
are your basic needs post-divorce.
Those pages that are duplicated from
the front of our workbook to the back.
This is what we might walk away with.
What does life feel like then?
How much do you have to start earning
if you haven't been in the workforce?
At what point in time
will child support stop?
And then you're going to go ahead and have
to be supplementing that if your lifestyle
is based on that much spend, right?
Because li- child support many
a time ends when the kids turn
18, and they're still our babies.
I have six, right?
They're still our babies.
We're still trying to afford them.
We're still there.
Um, and we start from that
very, very small part of what's
your spending and transaction.
We have in our client portal, if they
want to, they can link up their credit
cards, they can link up their bank
statements, and we can spend some time
going through the last three months of
spend and what did that look like, right?
Around here, our convenience
store you can… is Wawa, right?
You can get a Sizzli, a
snack, or you can get gas.
So if I see an $80 charge at Wawa,
are we feeding the kids for 80 bucks
on Sizzlis, or are we buying gas
and maybe getting a water, right?
These are things that we actually
want to track because those one-stop
shops can actually throw our budget.
The clients can then use that
themselves on an app to go
ahead and track their budget.
Most clients will use it for three
to six months, and then they stop
because they've got a hold of it.
They understand what
this new lifestyle is.
They understand where maybe some
of their spending behaviors are.
And I can't see any of that spending
and transactions unless they sit down
with me and they share their screen.
It's private.
It's for them, right?
But I'm happy to sit there and be that
accountability buddy for them while
they try to stretch their legs, right?
When they try to figure this
out for the new normal for them.
And the new normal, by the
way, is never a one and done.
It's just where we are right now And
then where are we gonna be in six months?
That could be your new
normal at that point in time.
Jaime Davis: And I think it's really
important, too, for folks to understand
that just because you are receiving child
support or alimony, it's not necessarily
guaranteed because both of those forms
of support in North Carolina are gonna
end if the person paying passes away.
And so even though you may have
the best laid plans in terms of,
you know, your budget and all of
those things, there are certain
scenarios where those payments cease.
And in some cases, we are able to
negotiate for life insurance for
the person receiving the support.
But at least in North Carolina,
our courts can't require it.
And so unless the spouse agrees
to it, there's still this little
place where you need another safety
net just in case that happens.
Donna Jean Kendrick: Exactly, and
that goes back to that cash reserve,
and I love that you bring that
up, as well as the new negotiation
of the value of the house, right?
Liquid money versus not liquid money.
Jaime Davis: Yep.
Donna Jean Kendrick: We have seen
recently because of that whole
alimony can go up, it can go down.
Somebody can pass, right?
We do the inventory of life insurance,
make sure they're paying life insurance.
And again, unless it's part of
the agreement, ugh, maybe you take
more of the equity of the house
and you forgo the alimony because
then that's in your control.
Then you can make
decisions with that money.
You can grow that money.
We can invest it and have it
pay out to you feeling like an
alimony, but you have it up front.
You've collected it.
I also have a lot of clients that
don't understand the laws around
alimony and around child support.
How does it get negotiated?
How does it go up and down?
And here in Pennsylvania, at least,
again, I'm not an attorney, but
we have to remind people that you
can't negotiate the child support.
Like, it's a grid, and a child
has rights to their own support.
It's not negotiable for
a parent on either side.
So you can go ahead and write into
your divorce settlement, spouse number
two will not seek child support.
Sign away.
Five months later, when she sees
you with a cute blonde, she's gonna
hit you up for some child support.
And we see it happening
again and again, right?
So I always say, you can't waive
a child's right to child support.
Remember that.
Like, that's not a negotiation,
at least here in Pennsylvania.
Jaime Davis: Yeah, absolutely.
You know, same here.
So thinking that you're getting a great
deal because the other side is not gonna
ask for child support, n-not so much.
Donna Jean Kendrick: Yeah.
It's a sneaky sneak.
That's what we call that
in Philadelphia, so.
Jaime Davis: So divorce settlements
can look good on paper and still be
financially unsound in five years.
What are the most common long-term
financial mistakes you see in divorce
agreements, and how can someone
protect themselves against those?
Donna Jean Kendrick: Yeah.
I think we just hit on one, not having
life insurance to support alimony
or not negotiating a more lump sum
of liquid cash in exchange for that.
I think another one is, again,
we already talked about the
value of the house, right?
All of a sudden, you settle the house,
you're keeping it, and here comes these
big maintenance bills, and now you're in
credit card debt 'cause you didn't have
enough cash reserve put on the side.
That's a big part of it.
A big part of it is not leaning
in to financial professionals.
If you should acquire a pension
or should you acquire part of the
401or their retirement funds and you
don't know how to invest it, right?
Your other half might have been
the person that was really savvy,
loved following investments, right,
or had the financial advisor.
As a financial f- planner, I've been
written into divorce settlements which
spouse gets the financial planner, right?
I was like, "Wow, I'm, I'm
flattered. That's weird." Right?
But this is part of it because if you
receive part of that IRA money, that
retirement money, well, how do I know
how it plays a role in the future, right?
Like, if you're under 59 and a half, you
can't access it without penalties, right?
And we might need that money to grow.
Are you investing it well for your
ability to be in the marketplace?
And so I think getting professional
advice on how to manage 401s
and IRAs is really important.
I always use the story back before my
first husband passed, I was the one
who took care of all the finances.
Like, if we talked about it, I was
the one who knew the numbers, knew the
accounts, knew the passwords, r- did
the monthly bills, did the investments.
And when I had, I'd given up my career
to follow him abroad with his job,
and I remember saying, "The only
thing I ask of you is that you fully
save into your 401because I don't
have an ability to save anymore."
And he did.
He definitely did.
I never asked the next question of, "How
are you invested?" I never asked it.
So when he passed, when I gave
up my career, it was around 2008,
2009, the big financial crisis, he
had moved the cash, and he never
went back into the marketplace.
He passed in 2013, many years later.
And so when I received the 401,
now as my personal asset as a widow, I saw
that we were sitting pretty much in cash.
We hadn't grown that money I was floored.
I was a financial planner
at the time, listeners.
I was not.
I was a statistician working in pharma.
This was post, post Craig's passing
that I became a financial planner.
But I always remember being almost
blindsided, like, "Oh, well,
how do I invest it then?" Right?
Like, now that it's not in the
25 elected target date plans
of a 401, how do I do this?
And that's when I leaned in and got my
own financial professional at that time.
Even financial planners have
financial planners, right?
Because sometimes we can't
look at ourselves that closely.
So I think that's a big one.
So one, making sure that, you know, the
alimony either has life insurance on it
or you've settled differently, making
sure you have enough money to support
the house, making sure you have your
cash reserve in check, leaning into
professionals, accountants, divorce
attorneys, estate attorneys, things like
that, for help on your traditional IRA.
And my last big one is getting your
estate documents updated, going through
and changing beneficiaries on your
own life insurance, your own 401.
Move it to the kids, move it to your
best friends, or keep it with your
ex if that was part of your agreement
or you want to do that, right?
But making sure that when you have your
will, your healthcare directive, your
power of attorney, that your ex isn't
still there making healthcare decisions
for you should you be in a car accident.
Update, update, update.
So those are my big five.
Jaime Davis: Now, great advice.
So before we wrap up here, if you had
to give only one piece of advice to
someone about protecting their financial
future through divorce, what would it be?
Donna Jean Kendrick: The one piece
of advice is lean into your team.
Jaime Davis: Mm.
Donna Jean Kendrick: Lean into your
divorce attorney, lean into your financial
planner, lean into your estate attorney.
Lean in.
Sounds expensive, I know, right?
But always, if you don't have someone
that you know in your, in your back
pocket or your, your team already,
find someone that you know has gone
through a divorce and is doing okay,
and say, "Who did you use for?" Right?
Like, that's how I found my financial
planner, another widow who was financially
doing okay raising her four kids.
Who did you lean into
as a financial planner?
But lean into your team, because
sometimes if we lean into our best
friends or extended family, our private
information becomes very public,
Jaime Davis: right?
Donna Jean Kendrick: So leaning into
your team for confidentiality, for their
professionalism, for their experience.
We're not just smart because we
went to school and we got our law
degree or our CFP designation.
We're also smart because of the
experiences of our clients, and we have
that world of resources to help you.
We have counselors and,
that other people have used.
We have great bank accounts that maybe
offered a good CD, right, that we can
try to point you in the right direction.
We have great therapists, like
for our kids or the kids of
our clients that have used.
We can help you build your team
as it goes, and you can do it
with privacy and confidence.
Jaime Davis: I think that is great advice.
That's actually part of my five-step
framework for divorcing without
destruction is to assemble your team.
Donna Jean Kendrick: Yeah.
Jaime Davis: And I think one of the
reasons the team is so important, I
think a friend can be part of that
team, but for the professionals that
are on the team, it's because they
can be objective, and they are not
emotionally i- involved with your life.
And so they can help you make decisions
based upon their experience, their
objective data, all of the things
that maybe somebody who is a little
too close to the situation can't.
Donna Jean Kendrick: Yeah.
And they can also keep the ball rolling.
Jaime Davis: Right.
Donna Jean Kendrick:
We call it the ostrich.
When you know what to do and you don't
wanna do it, and during emotional
times, you just stick your head
in the ground and the world just
spins around you, this professional
team will keep you going, right?
It's your accountability to--
because you have to move through it.
The anticipation of the end can be
really big, and this team is going
to help you move through it and
move into that next new normal,
which again, is yours to create.
It's gonna be good.
It will be good.
Jaime Davis: Well, thank
you so much, Donna.
Your ability to make complex financial
strategy feel both clear and actionable
is exactly what this audience needs.
Listeners, you can learn more
about Donna and her work at Sefton
Financial at seftonfinancial.com.
Her book, The Divorce Money Map, is
available wherever books are sold.
I highly recommend picking it up if
you're in the middle of a divorce or
just beginning to think about one.
If today's conversation was helpful,
make sure you're following A Year and
a Day so you never miss an episode.
While the information presented
is intended to provide you with
general information to navigate
divorce without destruction,
this podcast is not legal advice.
This information is specific
to the law in North Carolina.
If you have any questions before
taking action, consult an attorney
who is licensed in your state.
If you are in need of assistance in North
Carolina, you can contact us at Gailor
Hunt by visiting divorcestough.com.
I'm Jaime Davis, and I'll talk with
you next time on A Year and a Day.