When attorney Billie Tarascio posted in social media about women ending up worse off financially in divorce, she got all kinds of comments from men who strongly disagreed. So who is it that ends up worse off?
Stacy Francis, a Certified Divorce Financial Advisor based in New York, brings her opinion on the subject to the Modern Divorce Podcast, unwrapping the most typical scenarios she sees in her practice in an attempt to answer the question.
In today's episode, you'll learn who is at biggest risk for being penniless after divorce, and how to arrange your finances so that you won't outlive your money at age 95. The ability to chart that course to financial success is not difficult once you know the secrets - no matter what gender or income level you are.
To learn more about empowering yourself financially after divorce with some free resources, stop by Stacy's website at savvyladies.org.
When attorney Billie Tarascio posted in social media about women ending up worse off financially in divorce, she got all kinds of comments from men who strongly disagreed. So who is it that ends up worse off?
Stacy Francis, a Certified Divorce Financial Advisor based in New York, brings her opinion on the subject to the Modern Divorce Podcast, unwrapping the most typical scenarios she sees in her practice in an attempt to answer the question.
In today's episode, you'll learn who is at biggest risk for being penniless after divorce, and how to arrange your finances so that you won't outlive your money at age 95. The ability to chart that course to financial success is not difficult once you know the secrets - no matter what gender or income level you are.
To learn more about empowering yourself financially after divorce with some free resources, stop by Stacy's website at savvyladies.org.
Billie Tarascio: [00:00:00] Hello, there it's Billie Tarascio with the Modern Divorce podcast. Excited to be here today to talk to a financial expert who works mostly with women.
And we're going to talk about a topic that is a little controversial. I posted a TikTok that said, women get screwed financially and divorce. And you would not believe the comments that came in from men who were like, are you kidding me?
I've never heard of a woman who pays for divorce, but this is a macro level problem and something that I'm hoping we can debunk the [00:01:00] myth that men get screwed in divorce and talk about what happens really and what the lesser earning spouse can do about it. So, Stacy, thank you for being here and welcome to the show.
Stacy Francis: Thank you, Billie. It sounds like this is going to be a hot topic. I've got some strong views, so this could be good.
Billie Tarascio: Yeah. You know, it, it really evokes a lot of emotion when we talk about, you know, what, what divorce does to either quote men or quote women. And we're talking about generalities, but before we get into that, can you tell us about your
background?
Stacy Francis: Yeah, actually, you know, Very rarely do you find a little girl saying I want to grow up to be a certified divorce financial analyst? Uh, yeah. You don't really find those people out there. I know, nor did that ever crossed my mind. Um, but I watched my grandmother stay in an abusive marriage and, um, before she passed away, she shared with me why she stayed and she felt financially trapped.
And [00:02:00] Billie, um, this obviously impacted her. It impacted my father and ultimately she ended up passing away from the abuse. So, you know, divorce while I am not in any sense of the word pro divorce. In fact, I'm celebrating my 20. Anniversary with my husband and never been more in love. Um,
Billie Tarascio: congratulations!
Stacy Francis: Thank you. Thank you. Um, there are far too many people who feel trapped in their marriage. And the number one reason they feel trapped is because of finances. And so I have dedicated my life to educating, empowering giving information so that people can make good decisions to do what's best for, for them, for their safety, for their children, for, for their life.
Billie Tarascio: I agree with you. I also have strong feelings on this really strong feelings on this. And for me, it starts with women [00:03:00] understanding that they have to invest in their earning capacity.
Stacy Francis: Yep. Yeah. I always say, I mean, when we talk about assets, everyone thinks of the checking accounts, the savings account, the brokerage account, the retirement account, the house.
Um, but for, for us, uh, asset, we don't think about is our earning capability. And that is actually the biggest asset that we have. And. The people who do get screwed in divorce are the individuals who don't have a lucrative career to fall back on because you just can't, you just can't rebound in the same way.
And that tends to be, and I'm just gonna, you know, do the general Joe know generalities here, but it tends to be women. We step back, we take care of the families are full-time career becomes taking care of our children, which FYI I think is harder than my job.
Billie Tarascio: I totally agree
Stacy Francis: so much harder. Yes. [00:04:00] And, um, you know, come Sunday.
I'm, I'm excited to go to work on Monday. I love my children, but I'm ready. Um, the women that we see are living below the poverty line are women above age 65, who are single and divorced the majority of them. Didn't have her career to fall back on or had to restart. And it has not gotten better in the last few decades.
It just, hasn't. It's a big problem. And it's a problem we have to talk about.
Billie Tarascio: I agree with you. I agree with you. And I know you're saying, you know, a career to fall back on and that is. That is absolutely a good thing to have, but I really think that even if you are, full-time momming, figuring out a way to carve out time, to be constantly improving and investing yourself whether or not you're making money at that moment, making yourself more lucrative every [00:05:00] year, I think should be a priority because you never know when your spouse is going to die or meet somebody else or whatever. And. Um, we do have control over this. So this is a cultural issue.
And unless women decide to invest in themselves over the objections of religion, over the objections of husbands, they will always get screwed in divorced because of what you just said. So you're a divorce financial planner, right? So you help people divide assets, but that's not the thing that leads to poverty.
Stacy Francis: I mean, of course, right. Make mistakes. You can leave assets on the table. You can believe your husband who says, you know, I earned the retirement. It's mine, which as we know is not the case. Um, but, but poverty typically doesn't have to happen right after divorce. It's like termites. They solely eat the foundation of a house and all of a sudden you have to bulldoze the house [00:06:00] and that's what ends up happening.
We have a lump sum from the divorce and slowly we're eating from it and we're not replenishing it. And, uh, you know, God forbid if we have spousal support and child support, that doesn't last for a significant number of years. Um, you know, we have even a harder time. Being able to be able to afford our standard of living.
And so, you know, the, the, the real, the real answer is that we, as women have to stand up and take agency over our finances. I don't care how happily ever after married, you think you're going to be. Eight out of 10 women, at some point in their life are going to be alone for reasons of their husband passing away, divorce, whatever that might be eight out of 80%.
Right. Those odds means, I mean, literally if, if my chances were 80% of dying, if I didn't exercise and eat healthy by, you know, let's say dying by age 60. Oh my gosh. [00:07:00] Right? Who wouldn't be at the gym and who wouldn't be salmon and broccoli every day. Um, these are the statistics, numbers don't lie. And part of the reason why women find themselves so screwed is that they haven't really taken an active role with the finances they're active with the bill pay,
right. We're doing the budgeting, checking the credit cards or making sure everything's being paid. And that's great, but that's like a quarter of the pie. The other two thirds of the pie includes learning how to save and invest, learning how to make sure that your spending is sustainable. And number three, making sure that you're at making sure that you are investing and real estate the right way. Not over purchasing, not necessarily staying in the primarily home if you can't afford it. So, you [00:08:00] know, again, the other two thirds of the pie is making your money grow through investing and savings, being smart about what you're spending and number three, being smart about real estate and making sure that you're not overextending yourself with what most people is their biggest asset and their most costly asset.
Billie Tarascio: Right. Right. So we've got two, primary things that I think women overlook earning capacity. And am I making a good decision with my housing costs in my real estate way before we get to stocks and bonds and how do I invest? So if you're intimidated by the concept of, you know, stocks and bonds, like just start with, what's more important, really earning capacity and budgeting.
So do you work with people on budget?
Stacy Francis: We do. I mean, I I'll tell you, you, it doesn't matter how much income you have how much you have in your retirement portfolio. We've [00:09:00] worked with people. I run a charity called savvy ladies in honor of my grandmother. And, um, most of the women who come to us are really struggling.
Financially. We work pro bono with, with them women who are earning $40,000 a year, who could barely make ends meet understandably and women who have. $4 million portfolios that I worked through through my for-profit business, Francis financial and that $4 million portfolio isn't enough. And so what I have to say is that what matters more than your income, what matters more than your investment portfolio and how much money you have is how much you spent.
Right. Right. It's kind of like exercising. You can, you can exercise two hours a day, but if you're eating Snickers bars all day, or in my case, Swedish fish, I'm just going to be honest. Um, you [00:10:00] know, am I going to ever get anywhere? No, I'm not. And it's the same thing with your finances. It all interplays together.
And the thing is. We have women who take their lump sum from their divorce. They invest in their career. They get out there, they managed to reduce their expenses to live solely on a small amount, and they grow it over time to be a beautiful, secure financial future. Getting them out to age 95. And we see that with people who are earning $40,000 a year, living in New York city, and those who are earning 5 6, 10 times that it's not about the income. It's not about the assets. Although of course that makes it impact the biggest factor that will impact you of whether or not you are going to live in poverty long-term is how much you spend. So it's not rocket science, [00:11:00]
Billie Tarascio: it's not rocket science, but it's hard.
How do people.
Change their mentality or change their
Stacy Francis: habits. How it's really hard for the vast majority of women after divorce, we have to reduce our standard of living significantly and it just sucks, nothing, nothing I can really say to make anyone feel better, but. I do know is that every single woman that we've worked with who has gone through divorce is a happier person on the other side.
Even if, even if they're not able to take the vacations they used to take and getting real about what's going to make you happy in life. And there will be some things. You'll want to keep spending money on, cause it really does make you happy. And it's really important, [00:12:00] but I can guarantee that there are other things that we spend money on that don't add to our life.
And Billie, I feel like the perfect example is what we all just went through. COVID think about how your spending changed. All of a sudden we weren't eating out. All of a sudden we weren't going out for shows or entertainment or drinks or, you know, buying clothes in the same way we did. And we survived.
And, you know, I think it's a great. It was a great recheck of what do we need to be healthy and happy. And for the vast majority of us, it's a lot less, it's a lot less. I am
Billie Tarascio: glad that you mentioned that because COVID has had a significant impact on
Stacy Francis: the macro level [00:13:00] to how we spend. Can you talk about that for me?
It has had such a big impact. Um, the savings rates that Americans had during the first year, 2020 was one of the highest savings rates we've seen in history. I was so proud of us, collectively, all these people I'm not related. I was so proud and. You know, I think we learned a big lesson that being said, though, Billie, we are seeing the spending rebounding with a vengeance.
It's almost like we've been on a diet. And then all of a sudden Godiva chocolates are on our desk. Right. And, you know, we, I think back to my first job and. I made a decent income, but not for New York city. And I lived fine. I still saved into my 401k and lived a decent [00:14:00] life. I now make like 20 times that.
Right. And what's changed. Well, I'm still saving right into my 401k, but also my spending has gone up. And so what ends up happening is that we unconsciously start to spend more money and we don't even really realize it. It's. Right. It just kinda happens. And so the best thing that I can share with any woman who wants long-term financial security is to get real and get naked about where all the money goes and write it down, or use a mint.com or a personal capital, one of those online tools to automate it so that you can.
Get real and kind of like, you need to jump on the scale to really see where you are with your weight. It's the same thing with your spending and yes, it's painful, but you need to take a look and you need to really. [00:15:00]
Billie Tarascio: Yeah. I mean, the the diet analogy is, is spot on. Like, sometimes you gotta write down what you're eating and look at your calories.
It'd be like, oh yeah, it's hard to lie to yourself.
Stacy Francis: Going up when you're writing it down, you can't really lie to yourself.
Billie Tarascio: Yeah. But there's massive power and freedom in the upside. So it's, it's definitely like a labor of love. You know, you, you,
it's a little sadistic,
just like, you know, dieting or going to the gym, but the payoffs are worth it.
It's hard to get people there. It's interesting that you said we've got a massive spend. It's not surprising, but it's interesting. Um,
so. Let's shift for a
minute and talk about what you do in your business. Besides helping people with
budgets.
Stacy Francis: Through Francis financial, we are a wealth management firm. I started the firm actually right after the charity. Um, when I realized I was going to need to become financially [00:16:00] successful to support the charity. So it's been about 20 years and 70% of the women that, uh, the people we work with are women who are on their own and their husband has passed away, or they're going through or after divorce.
And. We model out for our clients till she is age 95. And we include every expense, including Starbucks, vacations, clothing, Zappos, Amazon, you name it. It's all in there as well as income tax expectation, no tax costs. So that she can really see based on settlement proposal, a with this level of child support and this level of alimony versus settlement proposal B, where she going to be longterm, can she afford to stay in the house?
Does she need to downsize? Does she have to go back to work? If so, what does she need to earn? What costs, what type of lifestyle can she afford? Can she still stay in the [00:17:00] neighborhood she lives or do we need to, so all those like million and one questions that we typically have as we're trying to fall asleep, and then can't, we can model out and create beautiful scenarios to, to actually show you the numbers.
And that's. Part of the reason why I love what I do. I mean, it's a helping profession. I feel like I'm helping every day. But the other thing I love is that numbers don't lie, their calculations and our goal it's to give information to women so that they can make really good financial decisions and that they can live their best life because for money, for, for most of the women I work with, it's not about the Gucci bag.
It's not about like what money can buy you. It's more about money gives me options opportunities and keeps me safe and keeps me safe. That's really. [00:18:00] What it's more about.
Billie Tarascio: Absolutely. Absolutely. So do you testify, do you give this information to judges? Do you help judges the decisions about what an appropriate spousal maintenance amount might be and why?
Stacy Francis: Yeah. So, uh, yes, we will. We will testify and. We will give our expert opinion to very clearly lay out, you know, based on the marital standard of living. This is what we would suggest,
this is the type of, you know, length as well, all modeled out. Um, we also can show, you know, if she's getting this lump sum of assets, what is a sustainable withdrawal rate that she can, you know, can actually take so that she doesn't run the risk of, of outliving it.
And so we can show all those pieces and really for, for judges. I mean [00:19:00] of all people, I feel like there's some of the busiest people distilling into very clearly of this is a situation. This is what's being proposed and this is why it does or does not work. And having the numbers to back it up and just making it 1, 2, 3, so that they can make.
Good decisions. And we do find that women who engage financial professionals and it's not just us like just financial professionals fare better. Oh yeah. They, they, they fare better and
Billie Tarascio: I have no, no doubt. I'm sure this is an investment that, you know, I want to make with several of my clients right now. You because the payoff will be there, but let's talk about like practically, how does that engagement work?
How much does it cost? What would somebody is thinking about? Do, should I hire somebody to go to a judge and say, this is how much I need maintenance? How would,
how would it look?
Stacy Francis: So they're certified divorce financial analysts work [00:20:00] different ways, but primarily during the divorce we work hourly. So it was pretty easy.
The way we work is we charge $250 an hour and we have a $7,500 what we'd say retainer or so we don't use the whole thing. We of course refund it. But 30 hours that you get for that 7,500 typically for every client, it covers their engagement. It's. Odd, unless it's extremely litigious that it wouldn't. um, there are some certified divorce financial analysts that don't charge.
And that sounds like a really good thing, right? Well, you have to be careful. There are a lot of companies, Merrill Lynch, Morgan Stanley, um, you know, Wells Fargo. They don't allow their CFA's to charge hourly because their Arizona missions won't cover. So they give the work away for free. The problem is, is that typically they're not working hand in [00:21:00] hand spending.
God knows how much time doing this work, doing a good job, because again, they don't get paid. The only way they're going to get paid is if you transfer assets to them, After the divorce. So what you want to do when you're searching for what we call a CDFA certified divorce, financial analyst, you want to ask them, how do you get paid?
Are there any conflicts of interest? Are you a fiduciary? Are you going to put my, you know, legally my needs ahead of yours? The fourth, most important question. How many cases do you work on each year? 75% of CDFA's work on three or less cases a year, the top 5% work on 30. There are not many of us that do that volume of work that have that level of familiarity and complexity.
And you want to make sure that again, when you're interviewing [00:22:00] individuals. That you're working with someone where they're not learning the trade right. On your case, in your financial future? Sure.
Billie Tarascio: Absolutely. Because it's not easy to figure out how do I take all this information, what they did in their lifestyle then plus how much you might she make, plus how much might she make as she, as her career goes, plus how much does he make.
And how much will he grow? It's not easy. And then therefore, judge, here's the right number.
Do it.
Stacy Francis: Yeah. It's I mean, I I've, I've had my CDFA now for 19 years. And I was one of the first CDFA's in the country. I will tell you, Billie, I used to pay this amazing woman who was a CDFA. She is one of the first to proof my financial plans.
And I did that for years. It's kind of like you graduated kindergarten. That's great. And [00:23:00] that's how I felt like it's, it's great to do the schooling, but it, I mean, I think it's similar in matrimonial law. Like it's great. I've got my, my J D I've I've I've passed the bar, but, but now I'm practicing and there's so much to learn.
Yeah. And grasp and understand. I mean, I'll be honest, I'm still learning every day. And I mean, to be honest, that's why I love it. So you, you know, you really, it's a craft. It's a really unique specialty and, um, not everybody, you know, not everybody's cut out for it, either the complexity and the financial piece of it, or to just be honest.
It's a really hard area to work. And I was on a call with a woman last night and I needed to go. I had another meeting and she started crying. She said, please don't please don't hang up. She's dealing with a domestic violence situation. And you know, it can be very, it can [00:24:00] be really hard and it's not an easy profession to be in and you know that, um, you know, so you really want to make sure that you're working with the right matrimonial professional, the right financial, the right therapist, that you've got your, you know, you've got your team, you've got your team.
Billie Tarascio: Where are you located? Geographically?
Stacy Francis: So we are in New York. Um, however we have cases actually all over the United States and some international. Were different, most CFAs, um, about 95% only work in their own state. That's that's typical. Um, we're different because. This is so much of our specialty. So we have quite a few cases in California, which is as you know, a community property state.
And then we have a lot here on the east coast and Florida and Texas and Wisconsin, um, some international and really what it [00:25:00] comes down to. We can work at any of those states. We just need to make sure that our clients have great legal counsel that understand the legal aspects of the laws of the state, because that's not why people hire us.
We know that is not our expertise, we eat numbers for breakfast and law books, if anything, that's what frightens me. So. Sure. Um, you know, so making sure that you have the, you know, the right, the right team is important, but we are unique if you're looking for a CDFA and. You know, you're looking for someone locally.
Um, they're probably just going to work in, in your state. Um,
Billie Tarascio: so then when you testify, you're testifying mostly in court via
oh,
Stacy Francis: via video. I mean, it's worked out really well for us via COVID, I'll be honest though. Billie, it's very rare that we have to testify. Most of our cases end up settling sometimes settling on the court [00:26:00] steps.
And I will credit that to the great lawyers that are on the case, but I will also credit it to our story is so tight with evidence. It's very hard to argue against. And when we write our plans, there's no funny business. We're not, you know, we're not putting a, an inflation rate of 10% that makes things look super expensive.
So her situation looks worse. I mean, we, we are writing it so it can be dissected by a court and we can stand a hundred percent behind every single dollar and every single cent. Um, and most of our cases, I mean, we typically are brought in, in very high net worth cases. So the clients they're walking away with at least a million dollar portfolio.
And so will, we need to really do a very good job and be. Specific because we're often [00:27:00] dealing with extremely high sums of money and the stakes are even that much more significant. There's no rounding errors there. You just really don't want to do any of that.
Billie Tarascio: Okay. So we've got,
I know there's going to be listeners who are thinking to themselves.
How am I going to come up with $7,500 and will it be worth it? Like, will I get more spousal maintenance than I would have, and enough spousal maintenance to make up for the $7,500 and how much money do they need to have at stake, both in terms of income and assets to make that worth it.
Stacy Francis: You know, it's such a good question, Billie.
And I, I don't necessarily believe that every case needs someone like what we do. Um, every case needs a lawyer. No question about that. [00:28:00] Um, you know, I would say it also depends on the lawyer that you're working with. There are some lawyers that are very financially sophisticated, um, that can do this very well.
And then there are other lawyers where the, the types of assets, crypto restricted stock units, um, you know, brokerage accounts cost basis and tax implications, same thing with different types of retirement accounts, where it does make sense. Um, for us, I would say higher asset divorces more financially complex makes sense.
But also remember, you know, we're not the only ones out there, so there are great divorce, financial analysts and you know, if we're not the right fit, I know great people. I run the association of divorce, financial planners here on the east coast. So I know hundreds of people that do what I do, and I know who the great ones are and who the not so great ones are, but there are people that work hourly.
Like you can just, you know, use them for five hours. Um, and the other piece, I [00:29:00] just want to share again, My love letter to my grandmother is savvy ladies. And my hope and dream is that, you know, if she had had more financial information and support that, that maybe her her life could have been different, maybe she would have had the knowledge and the strength and the support to leave.
I don't know that, but savvy ladies, you can work one on one with a certified divorce financial analyst, a certified financial planner for an hour. If you have more questions, you can reach out to us again, it's the only helpline in the country. And, uh, the, the people that are volunteers are some of the best people out there they're phenomenal.
And so that's another resource and there's, there's no cost. And we also don't income test. So a woman who's coming to us for us. You know, house out in the Hamptons, it's worth $3 million in a penthouse in New York city and doesn't know what should I sell? [00:30:00] Um, we're going to talk to her too, which may be a little controversial, but we also know that if she doesn't make the right decisions, Her financial future is going to be just as bad as the woman who is walking away with $10,000 from her divorce.
You know, no judgements here about who's the better person or who deserves what, right? The reality is that anyone can make financial mistakes and that we should not judge. And we are just there to help guide, educate, support. And help them along. So savvy ladies.org is a great resource. There's no, no negative to reaching out.
Um, and our helpline, just to give you an idea, the number of women we serve each month, um, now is actually the number of women we served in a year, two years ago. What that is. I mean, it's wonderful and we're so happy. Um, but it also really shows how many women are. [00:31:00] Quite frankly, struggling right now. And I think COVID scared all of us, not only health wise, but financially, uh, especially when it first started and we didn't know how it would be impacting us.
Um, so we are getting many more women reaching out, which, which for us, we're very, we're very, very happy.
Billie Tarascio: Yeah, I think it's fabulous. I think it's fabulous because we were in as much financial danger five years ago, as we are now, the principals are talking about will never go away ever. They're always there.
Um, this has been a fantastic episode. I am so happy that I got to meet you. I know I'm going to be working with you in the future and I'm so excited. Women who are listening, can go take advantage of your resources. Every single one of these women can go take advantage of your resources for free. So thank you so much.
And I would just invite our listeners to make sure to like, and [00:32:00] review this episode and then go see Stacy.
Stacy. Thank you again.
Stacy Francis: Oh, thank you so much, Billy. And I have to say I'm really impressed with the work that you do. Your practice is phenomenal and the number of attorneys that you've grown to. I mean, I just business owner to business owner, I just want to say kudos and I love to see great women thrive and succeed, especially in helping professions,
women.
Billie Tarascio: I totally agree. We should be supporting each other. There should be more of us and there are so pointing that out is a wonderful, wonderful thing.
Thank you so much.
Stacy Francis: Thank you.