[Source: Fiscal Fitness]
Top family law attorney Kristina Hohne reveals 7 secrets your divorce lawyer doesn’t want you to know
Welcome to Fiscal Fitness, with your hosts, John Grace and Daniel Medina. They have all the questions about investing, planning retirement and the future.
The story that we want to dig in today is number one: right in line with what we’re discussing. Is what’s the worst-case scenario warning that we see for retirees and this 4% rule? Does that make sense the way it was thought to make sense when it was designed? Or are there some alterations that need to be put into play? You go to the tailor to make sure that the suit or the dress fits the way your body works. Your left arm is a little longer than the right arm. Well, the suit is equal, we need to fix the sleeves of this jacket so that it fits you. We’ll be looking at the worst-case scenario warning for retirees.
Then we really want to spend some time with our good friend, Kristina Hohne, who is a top family law attorney for band 1 ranked acclaimed family law firm Walzer Melcher LLP. This is probably one of the best things you can do folks. Is listen to attorneys before you’re on the clock at $4,000 a minute. That’s just the going rate these days. We’re worried about inflation, it’s a joke. But the point is, let’s get as much information as we can under our belts before we’re paying on the hour. Sometimes we find as we work with family law attorneys quite a bit, that they have to go into this repetition cycle because people come in with the same ideas and it just doesn’t play in the court.
Let’s be cautious of so many situations where people have this notion, “Well, my friend said,” or, “I read on the internet,” or, “This makes sense to me.” Well, it might makes sense to you in your mind, but it just might not make any sense at all in the court system because they have a way of doing business and it’s 50/50. Sorry, that’s just what it is and I know you’re entitled to much more, but it’s probably not what you’re going to get. It’s probably going to be back to 50/50.
By the way, please notice folks, in most cases when you think you’re going to court, maybe, I don’t know, Kristina will tell us, it might be eight or nine times out of 10 that the decision is made on the court steps in a nano second. So it’s not in the courtroom where you’re thinking you’re going to make the judge just perform to your desires. Make the judge look like an elephant and you’re the circus master and you’re going to have the judge sit on the seat of the chair and dictate to your ex how it’s going to be. It just doesn’t work like that.
We’re going to get into the seven secrets your divorce lawyer won’t tell you, but should. We’ll make sure you understand that. As I say, this is something you might want to share with those you know who are thinking about getting a divorce. We think looking at Bill and Melinda Gates is just a canary in the coal mine. There’s going to be a lot more divorces. By the way, we can see that pattern in Wuhan, China where as things cleared up there were a lot of divorces. Wouldn’t be surprised to see that pattern play out right here in these United States of America. So again, we want you to be prepared if this is what you’re thinking about. Here’s some of the things you might want to process long before you get emotional and just think I’m entitled and I’m supposed to have it the way I want.
Let’s turn our attention to the seven secrets your divorce lawyer doesn’t want you to know. We’ll talk about this with top family law attorney Kristina Hohne. Now, Kristina is a partner at top family law firm Walzer Melcher LLP. Kristina’s experience includes litigating complex issues in a variety of areas, including divorce, accounting and tax disputes, breach of fiduciary duty claims, professional malpractice claims, wrongful termination and employment cases. And her specialty at this time for our talk together is on how people get divorced and what often happens.
We’ve dealt personally with a lot of situations where people are getting divorced and frequently it is the female, frankly, that becomes very emotional and has this really bizarre-o logical from her friends about how she’s going to make the judge dance to her music. How do you get people to understand it’s 50/50, I know you’re entitled to more, but at the end of the day it’s going to be 50/50? How do you get them to calm down, breathe, and understand the process and move through it with as little emotion as opposed to as much emotion as possible?
One thing is, I find actually the most emotional of clients are men where their spouses have had affairs. We do get some female spouses that are emotional, but I find the men who have been cheated on to be the worst. Either way, emotion comes with it.
You have to realize divorce is probably the most expensive service you’re going to buy in your whole life. Whether you want it or whether it’s been foisted upon you, you don’t really have a choice, there is emotion in it. One of my partners, celebrity divorce lawyer Peter Walzer, always tells clients, “You have to treat it like a business dispute.”
You just have to, otherwise, you’re going to get caught up in the would haves, could haves, should haves and all the emotion that flows with that. You have to treat it like a business dispute. Think of the other person not as somebody that you shared your life with, but somebody that you have to learn to live with and how you have to separate everything with.
You just have to accept we live in a community property state. You are most likely going to be giving up or receiving half of everything. Half of what you had before, half of income earned during marriage, half of the assets. Of course, there are exceptions. Some people have prenuptial agreements or post nuptial agreements, settlement agreements. We have people come into marriage with separate property, so it’s not just a de facto 50/50. But it is the facts of life. It is what you elect into when you decide to get married or divorced in this state.
Aha! When you go down your personal list of these seven things attorneys should be expressing, but don’t, and of course, you’re here because you’re an exceptional attorney, in our opinion, what’s the first item on your list?
Before I get to the first item, I want to say two things. Because of course, I wouldn’t be a lawyer if I didn’t come with a disclaimer. I practice in California, the list of seven things, I think it’s applicable in all other states, but there are differences. And if you are listening and tuning in from another state, you’ll want to consult with somebody in your jurisdiction. And starting with what John talked about when we first joined the program, everybody knows somebody who’s gone through a divorce. It used to be that 50% of marriages end up in divorce. It’s probably a lot more now. Especially in the midst of the pandemic, I’m finding it’s either making people grow closer together or solidifying that they should be separated.
But everybody knows somebody, so you’ve heard stories from friends, from family. You might see something on TV, you might read something on the internet. I love it, I love all of it, I want you to be informed. I encourage you to be informed. It helps you identify and ask the right questions, the pertinent questions. But you have to accept it also is going to bring in a bunch of fluff. Because what happened in Sally’s divorce or John’s divorce, it might not happen in your own divorce. It doesn’t mean it can’t come up, it doesn’t mean it can’t be a resolution in your case, but you just have to be mindful, no two divorces are the same. They’re very fact intensive, notwithstanding that we do have a body of law that’s developed. I just want to put that out there.
Going through my list. What are the seven things that a divorce lawyer doesn’t tell you but should? Actually, putting together this list was helpful for me. I feel like it’s going to be my go-to now as to what I do tell people. The first one is time. The amount of time it will take to get you divorced. I’m not talking about the amount of time from filing to actually conclusion of your case, which can take many years. I actually have a case pending right now in Northern California, that’s been going on since 2010 and no signs of wrapping up anytime soon. But I mean the amount of time it will take from your life each day, each week, each month. My partner, Peter, often says, “It is like having a second job. And you don’t know what the hours are, you don’t know what the schedule is and there’s probably going to be a lot of overtime.”
Some people don’t realize until they go through this process, that a divorce is a lawsuit. You can hear about contract disputes, business disputes, disputes with your neighbors, you got into a car accident, you have a personal injury suit. All of that sounds normal. Divorce is the same.
You are requesting that a judge decide issues in your case if you can’t resolve them informally. If your case goes to trial, you need evidence to present to the judge to support whatever claims you’re alleging. I’m entitled to X amount of this account, or X amount of a retirement account. I want my children for X amount of the time. All of that will require evidence. There’s several ways to collect evidence, but generally speaking, you are the person who will provide that evidence. You are your best witness. You will basically act as your own personal investigator.
Why is that? Because you’re going to be the one who’s called on to answer questions, provide information, collect documents. And you’re going to have to figure out how to balance that with your own schedule, with raising your children, if you have them. With competing with your responsibilities at work. It is not easy, it is not fun, but it is something that you should know walking into this process.
All right, let’s get prepared. And by the way, folks, this isn’t part of Kristina’s list, but it’s part of our list just as far as being financial advisors. And that is one of the issues that we have with the family law attorneys is they spend so much time fanning the flames or encouraging people they’re going to get more than they’re supposed to get or actually going to get. But one of the pieces of the puzzle that they unfortunately don’t keep in the equation and Kristina does, and that is if you’ve gotten your spouse to promise you $80,000 a year for the rest of your life, for example, let’s suppose that spouse has the nerve to just die and go away forever? Guess who got the last laugh? Now maybe they’re not laughing because they’re dead, but you don’t have any more money, you’re done.
My point is, you should be doing an insurance plan on each of you because if you’re dependent upon $80,000 a year, the math is very simple. If we’re assuming a 4% withdrawal, which we will talk about a little bit later in terms if that is reasonable, but if it is reasonable, it means that you need $2 million dollars on that person. Four percent of $2 million is $80,000 and you are to be the owner as well as the primary beneficiary of that policy. That way, you don’t have to buy the story that the ex said, “Yeah, I’ve got a policy,” and you don’t know how much. But you’re not the owner, you don’t know if you’re actually the beneficiary. As the owner and the beneficiary, nothing can change to that policy, particularly when you’re making the premium payments and all the mail’s coming to you. And you can see you are the primary beneficiary. That is such an important piece of the puzzle that most people leave open.
Then as I say, the spouse that you were depending on all this income for the rest of your life, just goes to heaven and you’re left feeling like, “Oh, shucks,” of course. OS moment, right? That’s an oh, shucks kind of experience. What are your comments on that Kristina?
I think that’s a great thing to bring up.
There are ways that you can have life insurance secure certain obligations in a divorce judgment, in a settlement. We see them typically with child support or spousal support when you expect a large sum of money over a period of time.
So it’s always a good idea to ask about that, to figure out how you can secure agreements that you’ve reached. That way, if somebody does die prematurely or unexpectedly, you’re not left holding the bag. You have a contingency plan.
Exactly. What’s your second item on your list? I know Daniel has some questions for you, so what’s your second item on your seven things that divorce attorneys should be disclosing?
Second reason is the cost. I think you’ll hear it from every lawyer, “This is going to be expensive.” Well, what they won’t tell you is how expensive it’s going to be. Why? Because there’s just no way to know. There’s certain things that have to be done in a divorce process. For example, spouses owe each other fiduciary duties just like business partners. As part of that, you have to disclose all your income, all your assets, your finances. You have to make a full and complete disclosure. That takes time, that takes money and ultimately, I think that’s an emotionally draining process to have somebody comb through their whole life and pick it and put it on a spreadsheet.
You know what else makes it expensive?
John Grace: What’s that?
If you’re uncooperative or if the other side is uncooperative. All that does is increase fees.
A divorce can be the single most expensive thing you ever purchase because consider what it is. Again, like we talked about at the beginning, it’s a division of your life through a certain period of time.
What does your life entail? Property, income, finances and children. And I don’t mean to look at children as a commodity, they’re not property, obviously. They just aren’t. But most people can agree on a custody arrangement. But if you can’t, if you’re unable to, you can expect it just to be astronomically expensive. Because when it comes to assets you can weigh it from a fiscal perspective. Is it worth it to spend $20,000 fighting over a $10,000 asset? No. But you can’t put a price tag when it comes to children and what is in their best interest. My office has handled many complex and highly contested custody disputes, some of which cost in the millions of dollars. So it can be quite costly.
A lawyer is a service provider, just like any other service provider. Just like a financial planner, a banker, an accountant. Lawyers expect to be paid for their services. We have bills too, we have payroll to cover, we have rent to pay and we’re not banks and can’t finance your case. So when you consider what this process will entail, consider how it’s going to be paid for.
Well, you make a good point about it being a business decision. One of the reasons we look at it that way is, it’s all about the finances. We’re trying to make sure people can figure out how to retire or make work optional on their terms. But let’s just understand, if you’re so angry and you’re so right, and you have to expend thousands if not hundreds of thousands of dollars with your attorney, that means this is money you will not be able to spend. You can’t argue with it over your spouse and you’re kids won’t get it either. Some of these discussions one way or the other, at the end of the day, you’re going to come to a conclusion with your spouse. It may be very friendly, it may be disgusting, but at some point you’re going to come to a sense of closure about where you can agree.
The sooner you can do that, that means you’re not paying hourly wages for somebody to understand what you’re saying and then try to put you in your right mind and make sure that you’re addressing this. Get this done, away from the attorney if you can. I think you have some suggestions in terms of number three, is that right? In terms of building a team, Kristina?
Absolutely. I think that’s a great point, John. It’s heartbreaking, but I’ve seen it firsthand. Some divorces bankrupt people. I don’t actually mean filing for bankruptcy, although I’m sure there are some who do. I mean some people hit rock bottom just because they are trying to put out every fire or they’re trying to figure out how to get rid of all these problems and they might have an uncooperative spouse on the other side. It’s unfortunate. I actually just saw a comment in the media from Chris Rock, who said when John Mulaney, another comedian, is getting a divorce, he said, “I told John, use the lawyer that my wife used because she got all the money.”
But in terms of assembling a team, number three: help. Enlist the help of other professionals. As a lawyer, we’re here to help you through the legal process, provide you with options, give you advice. But ultimately, you’re the one who makes the decision. How do you make that decision? Based on what I’m telling you, based on your internet research, what your friends are telling you. But there are also other professionals that you should consider enlisting in the process. Now I know what you’re going to say, “But that sounds really expensive. You already just told me how expensive your divorce is going to be and how expensive you’re going to be. So how can I afford to hire more people?” It sounds counterintuitive, but believe it or not, there are certain professionals who can actually help you save money because these are all questions you are likely to ask your attorney, who charges more than these other people. Think of it as a way to help you through the process while also saving you money.
What are types of professionals you might want to consider enlisting? A financial planner. Divorce is a key event in your life that also impacts your future. Will I have enough money to live? Will I have enough money to retire? When can I retire? What will the cost of my divorce and the prospect of either paying or receiving a portion of my income, how is that going impact me?
It’s really important that you speak with a financial advisor if you consider filing, probably before. Just so you have an understanding of how it will impact.
Second, there are certain professionals called a certified divorce financial analyst. This is a professional with usually a financial background and they have extensive knowledge of tax law and marital asset distribution.
Certified divorce financial analysts know how to navigate the divorce process. They can prepare clients for success after divorce. They also help budget.
I typically find when I have homemaker spouses, I will send them to a certified divorce financial analyst so they can figure out what they actually need to live. How will they budget? Will they have to work? How will they get a mortgage if they need to buy another piece of property? They can actually help with some of those financial disclosures that we were talking about earlier in the process.
Somebody else that you might not even know exists, a divorce coach. What is a divorce coach? This is a professional who also can help you go through the different stages of divorce, but they help focus on you.
A divorce coach guides you through the process, they keep you calm and focused, directed, motivated. They can give you tools that will help you support your personal wellbeing and deal with your personal emotions. They can give you tools on how to support your children through that transition. Help you figure out how to let go of maybe some anger or resentment that you might feel toward your spouse.
When you have kids you’re stuck, you’re stuck. You’re in this person’s life forever and you need to learn how to co-parent.
Again, these are things that an attorney can help you with, of course, but it’s probably going to be a lot cheaper if you get another professional. Tying in with the divorce coach, a therapist. Make sure that you’re practicing self-care, taking care of your mental health. Divorce is very emotional and you need to make sure that you’re processing your feelings in a healthy, constructive way.
That’s a good idea. Because at the end of the day, as I said, you’re going to get closure. So just do it as quickly as you possibly can and maybe you can even assemble your team. I can tell you that they’re willing to work together and if you will embrace that concept and maybe even on the same Zoom call or the same room at the same time, they’ll help you slice and dice and get through everything in record time.
By the way, one of the reasons we asked Kristina to come on, is because recently Daniel and I have been in a couple of cases where we have one spouse saying, “I need to say how I would be doing if my spouse is not in the equation. That means I need to see you with my spouse not in the room and of course, you can’t tell my spouse that I was in this room and getting these questions answered.” We really respect and respond to that kind of situation where the spouse is saying, “How much am I going to get and what do I need?” Now they’re looking at it if I’m with this person because we work this out, we can proceed. Or I’m without this person, financially am I okay both short term and long term? That’s part of what’s so important and that’s part of the reason that our trademark is the proof is in the planning. To look at all of these issues so that you can feel comfortable or certainly do what it takes to get to feeling comfortable.
Knowing this is what I’m doing, this is why and I know what my next steps are. I’ve got the mindset that I have to make this in my business head and try to get all the emotions out of the equation. At least push them to the side so I can feel like I’m making some intelligent decisions, both for the short term and the long term.
Let’s see, what about the time? You talked about time, but how’s that relate to volume?
Excellent question, which leads me to point number four. And this, I feel like you will never, ever hear from a lawyer. Any type of lawyer, divorce or otherwise. But it’s something you should absolutely be made aware of. Your case is one of many in somebody’s office. That’s not to say you’re not a priority. Every case we take is a priority.
I make it my business to make every case a priority, but reality is you can’t work on everything at the same time. So you might not receive a response right away. Having been on the other end, where I’ve had to hire a lawyer for certain things, it’s stressful and it’s upsetting when you send somebody an email and you’re expecting to get a response right away and you might not receive a response for several days. This generally just comes with any service provider.
Think about your tax preparer, your teacher at your child’s school. You send an email and you might not get a response for several days. Sometimes it’s not even the casework of your own lawyer, but your lawyer sends something to your spouse’s lawyer and that person has their own calendar, their own business, whatever they’re doing, their own caseload. It might take them several days or even weeks to get a response out. What I think is really important to remember, is that you’re communicating and you feel like you’re being heard, you feel like you’re getting responses, at least from your own team until you’re kept in the loop. And you can understand and know okay, this issue’s still on the table. You just haven’t heard back from the other side yet. Thanks for letting me know.
I have a personal rule. I try to respond to every email from a client the same day, if it’s possible.
But I’m an anomaly. I mean, I send emails at 3:00 in the morning, 5:00 in the morning, 10:00 p.m. a night. That’s because I have no life, I guess and I have a partner who’s very similar. But I never see this on the other side.
You’re married with children, right? So you do have a life. Speaking of married and children or other people around. What about the people who come and say, “I want a pit bull,” are you that pit bull?
I am so glad you raised this. It really goes hand in hand with item number five, which is teamwork. I get people who come in all the time, “You seem too nice. My husband won’t respond,” or, “My wife won’t respond if you’re too nice.” I say, “Let me give you a phone number. It belongs to my husband. Talk to him and then get back to me. Tell me how nice I am at that time.”
It’s okay to want a pit bull, but you really don’t want one. You don’t want somebody who’s going to be overly aggressive because that’s just going to cost you more time, more money, and just more problems.
I’ve heard, I’ve actually received this feedback from clients that they see it as a sign of weakness if you get along with your opposing counsel. Like, “I need you to be my advocate. I need you to not get along with them.”
But that’s totally the wrong attitude because you can get along with your advocate and still zealously represent your client.
The family law community, especially in Los Angeles where I practice, is small. We consider ourselves colleagues, we see each day in, day out. Typically, if you’re of a caliber of case that my firm handles, we see the same people on the other side. You don’t want to be on the no list. It works the same way. Every time I get a case and the spouse on the other side is represented by someone on the no list, you just know, “Gosh, this is going to be the one. This is going to be the one I hate in the office,” because it just makes it that much harder.
These comments like, “I want a pit bull, I want a bull dog,” they’re always motivated by emotion. Always. What you really want is somebody who will tell you how it is. Someone who’s not going to sugar coat it, not afraid to tell you what you’re asking for is illogical or unrealistic and you want somebody who can negotiate and settle without having to go to court, but is capable of going to go to court if they have to. Sometimes you have to.
Let’s talk about it this way. We see so many cases where we’re seeing one of the spouses and their attitude just is bad. You’ve got to help me make my spouse do what I want. Now, let’s see. How well did that work while you were together? So what makes you think in an adversarial relationship, you’re going to make him dance or her dance to your music today? It’s not going to happen. So breathe, smile, do a yoga class, go run around the beach or something, calm down and keep calm and carry on and make sure you get the job done. It helps you maintain your sense of balance as opposed to going crazy, thinking you’re going to make somebody do what you think they should do for your reasons that sit in your head.
Number six is the process. And this one, I think, should be said but it goes without saying.
Fair is the four-letter F word in family law.
The process is not fair and it’s not necessarily just, but it is the process that you must go through. Sometimes it takes a long time to have your day in court. Sometimes you have to make sacrifices or compromises to get there.
And sometimes you decide it’s for your emotional wellbeing that you don’t want to go there and maybe you’re willing to sacrifice something so you don’t have to do that. At the end of the day, a judge is just a person. Humans err, they’re just looking at the evidence before them, trying to make the right call. No judge is coming into this saying, “I want to find a way to not give you what you’re looking for.” That’s just not reality.
We’re very fortunate in Los Angeles, we have great judges and they’re very focused and motivated to make the right call. You might not agree with it, might not go your way, and sometimes they do get it wrong. That’s why we have an appellate process. But you have to keep in mind, they’re just doing their job.
Don’t take it personally if your spouse’s lawyer is making jabs at you or painting you in a bad light. That’s their job.
That’s what they’re doing. What do you think of mediation?
Mediation is excellent. I encourage everybody to go to mediation if they can.
Mediation is great. For those not familiar with the mediation process, look it up. Basically you go, there’s a neutral person before you. That person will help you resolve your differences if they can. It’s usually a retired judge or a retired or a practicing lawyer with experience. What they do is not binding, so you can’t force somebody to go, they can’t make decisions. But they can help you make decisions together.
Beautiful, Kristina Hohne. We’re so glad you could join us this afternoon. A member of the county bar at LA, Beverly Hills Bar Association, San Fernando Valley Bar, American Bar Association, Phi Beta Kappa Society. Delighted you could join us and put some light on this very interesting topic.