Episode 195: Women Divorce and Money w/David Stolz CPA, CDFA, Author
Listen Here: https://judyweigle.podbean.com/e/women-divorce-and-money-wdavid-stolz-cpa-certified-divorce-financial-analyst-author/
The first thing I addressed in the interview with David was why he wrote a book specifically addressing women and money when the book had very little to do with women and everything to do with how to deal with money in the divorce settlement, which is no different for women than it is for men. I asked that as a woman, and as a podcaster who constantly receives guest inquiries from male and female authors and divorce coaches who focus on women.
I was concerned about asking David that question because I didn’t want to challenge him as much as I needed to understand this phenomenon. David’s answer clarified it all: “There was a survey done that found women asking for help far more than men. 68% of women and 2% of men ask for help. This takes in asking for directions on a road trip to understanding the financial complexities of a divorce settlement.
Aha! Now I know. But let’s change that in this blog and reach out to men, too, in the discussion of making the best divorce financial settlement.
If someone lives in a community property state it’s much easier to make “paper” divisions of assets and debts if the law is followed as it defines community property. But if someone lives in an equitable division of assets state it’s tougher because the law isn’t always your go-to point of reference. And if people have to get Judges involved in making decisions about the division of assets and debts, there’s more room to divide subjectively rather than objectively in an equitable division of assets state. All the more reason for mediation to be the place to divide than a courtroom.
And, once the division of property is put on paper, and it looks even, that’s when a Certified Divorce Financial Analyst needs to come in and do a tax implication analysis for each spouse for a post-divorce look at what each spouse will end up with net after their tax requirement goes into effect. That’s where the real division of property lies, post tax payments.
With all the family law seminars I’ve attended over the past 10 years, this topic was never discussed. Mind you, if a Judge is involved, a post-tax assessment will not be done unless there’s a trial with forensic accountants doing their analyses for the Judge before orders are made for the division of assets and debts. The Judges aren’t doing anything wrong by not considering post-divorce tax implications because it’s not part of their jobs. Their jobs are to follow the laws of the state in which they work.
Chapters 10 and 14 in Stolz’s book Women Divorce and Money addresses income taxes from various perspectives. David gives a brief history of when filing jointly came into law; it was in 1948. The benefit of filing jointly was to save the spouses money. But in filing jointly, both spouses are responsible for the truthfulness of the information in the return, and are both responsible to pay the income tax calculated even for the spouse who made less or no money. David cautions against signing a joint return if you think (and definitely if you know) that your spouse is lying on the return.
Chapter 14 discusses when the last joint filing can take place. This has always been a bone of misinformation for me as a mediator. I’ve heard a variety of accountants weigh in on opposite sides of the answer. Some say the last day of the year is the determining factor: If you’re not officially divorced on 12/31, even though a divorce has been filed for, a joint return can be filed. Others say that if the divorce becomes final after July and before 12/31, a last joint filing can take place. David says that a joint filing can only take place if spouses are still married (divorce not finalized) on 12/31.
Being amicable is the first step towards making a divorce settlement that reflects how the spouses want to leave the marriage. The second step is to engage a Certified Divorce Financial Analyst to review the settlement before it’s filed to provide the net results of what each spouse will keep after taxes are computed on the proposed settlement.
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