Folks, I don’t do a lot of guest blogging here, but today I’m making an exception to introduce you to financial planner Vickie Adams, CFP®, CDFATM. It’s the beginning of the new year and that means everyone is getting those end-of-year financial statements in the mail and preparing for 2014 taxes. As many chumps know from painful experience, sexual infidelity often goes hand-in-hand with financial infidelity. Cheaters screw you over more ways than one — and hey, double lives are expensive.
Vickie approached me about the topic of chump financial prep, and I’m so glad she did. She’s a professional and this is her wheelhouse. (Whereas I am a blogger with a potty mouth. Don’t take financial advice from me. I’m the idiot who paid off my cheater’s credit card debt…)
Be smart and protect your money! — Tracy
Leveling the Financial Playing Field on Your Way Out the Door
by Vickie Adams, CFP®, CDFATM
“I knew something was up with Steve. He hired a personal trainer, of all things. When did just going to the gym become ‘not enough’? It already felt like he was spending all of his free time there. That and his new look.
When I teased him about having a midlife crisis, he really got furious. It felt like I was living with a stranger.”
I hear stories like this all the time. They speak to the power of intuition. It’s a valuable tool that lets us know what is going on without conscious reasoning.
But more often than not, we already have tangible evidence of infidelity. So much so, we feel the air being sucked out of the room and retreat into a state of overwhelmed denial. You can stall for time with counseling or freeze in fear, but choosing to consciously ignore the facts, and not protect yourself, can jeopardize your financial standing for years to come.
In most marriages, it is not unusual for one spouse to have a more “hands-on” role or a better understanding of the household finances. If you were responsible for other duties, and less focused on finance, it is critical to ask yourself, “do I really understand and can I accurately convey my complete financial picture?”
Being able to present a clear financial picture not only serves as documentation of your existing standard of living, but suggests how you want to live post-divorce minus the cheater.
Providing your legal team with correct information will be the basis for critical items such as child support, alimony, property settlement.
Can’t my lawyer do this? Yes, but in the process of a more formal discovery and at about $400 an hour. You need to start this process yourself. Remember, you are Mighty and you are up to the task.
Channel all of that anger into your inner sleuth and start digging and documenting.
No need to feel guilty or apologetic for not being “more aware of the money part.” Find a safe place outside of your home to keep copies of the documents listed below.
- Bank account statements and year end reports. Copy all statements. Review to see if paychecks/income are being deposited. Highlight unexplained withdrawals.
- On-line accounts. If possible, download statements before passwords change. Check browsing history for more than porn and dating sites. Look for investments and banking history.
- Year End Brokerage statements — make copies of all investments and retirement accounts.
- Statements from pensions and retirement accounts from previous jobs.
- Credit card year-end summaries. These need to be meticulously checked line-by-line as they often show irregularities and dissipation of marital assets such as affair partner vacations and gifts.
- Missing accounts or Vanishing Statements. Are there statements that came to your home but that no longer appear? Absence of activity on a credit card that was used for joint expenses? That indicates that these charges are being made on an account you are not aware of.
- Collectibles and valuable hobbies. Look at your spouse’s life. If someone is spending more than he/she is making, it is a sign that there is hidden income or unreported income somewhere.
One of my clients asked me, “How does he always have money for new photo equipment or bro vacations?” That was right before he left her for their best friends’ wife “who is athletic and outgoing like he is” and coincidentally a cheater too!
- Credit Reports. Request that your spouse join you in starting the New Year fresh by running a credit report to check for accuracy of your credit history and score.
Usually financial moodiness and an unwillingness to share and review information is an indication of bigger problems and have been known to reveal STDs — Sexually Transmitted Debt.
- If you have never gone to the tax appointment, plan to go. Ask questions. Ask your tax preparer to explain the return to you.
- If your spouse prepares the tax return, know what you are signing. Do not sign until you are sure you have a sufficient understanding of the information that’s on the return
- Get copies of Prior Years tax returns directly from the IRS with form 4506. It only takes one spouse’s signature to get copies of your prior year’s returns even if you think you have true copies.
I once had a client whose ex prepared a fraudulent tax return and forged my client’s signature. Because she was busy working while he was at home watching Jerry Springer and having his girlfriend over for sex during the day, he was right there at the mailbox when the tax refund check based on the fraudulent return appeared.
He endorsed his wife’s name on the back of the check, cashed it, and took his girlfriend to Las Vegas for a few days where he lost the money gambling.
It was only when she was contacted by the IRS years later about the irregularity in the return and a demand for $4,000 plus penalties and interest, that she became aware of his scam. The IRS came after her because she was the only one they could find. He was already on to a new victim and she was stuck with the bill.
The work you are doing here is called “Lifestyle Analysis.” It is the basis for your financial life after divorce. You can save yourself time, stress, and money by planning for your post-divorce life right now.
Over two decades ago, she founded a client-centered, boutique wealth management firm in San Pedro, CA., located south of Los Angeles.
During her own divorce, she realized that while her attorney was an expert in family law, he lacked the specialized skills necessary to structure a strategic divorce settlement that considered the long-term financial effects.
In addition, the practice of fighting over individual, unrelated financial issues, combined with the siege mentality of divorce, led many of her clients to be exhausted, confused, and often devastated by the monetary implications of their divorce agreement.
Vickie took a proactive stance in advising clients to plan for their economic future before, during and after their divorce. Her practice is focused on assisting others to navigate the life-changing transition of divorce successfully. See more of her articles at www.MyDivorceFinancialPlanner.com