Divorce Literacy Podcast

Divorce Financial Planning with Nancy Hetrick and Jody Bruns

February 09, 2023 Divorce Lending Association
Divorce Literacy Podcast
Divorce Financial Planning with Nancy Hetrick and Jody Bruns
Show Notes Transcript

Nancy Hetrick, CDFA, MAFF
SmarterDivorceSolutions.com and DivorceFinancialTraining.com

Incorporating financial divorce planning into the divorce settlement. 100% of all divorces involve some type of financial settlement, so why not involve a divorce financial planner as a neutral into the process?

Divorce financial planning can help divorcing spouses save money when they can objectively look at the various ways of transferring assets, providing equitable distribution of income so both spouses can move forward after divorce

Visit www.divorcemortgagecourse.com for more information and to take back control.

At the Divorce Lending Association, our mission is to help divorcing homeowners make more informed decisions regarding their home equity solutions and the divorce team identify any potential conflicts between the divorce settlment, the mortgage, and real property.

Divorce Mortgage Planning is the ability to put into play the desired outcome by pairing the needs and options available while incorporating the necessary details and clarity into an executable settlement agreement to obtain closure and peace of mind successfully.

Are you going through a divorce and need informatin on refinancing your mrotgage or buying anew home once the divorce is final? Often conflict arises out of a lack of knowledge. We have an amazing workshop available allowing you to take control of your situation and divorce mortgage planning so you are in a stronger position to negotiate while removing conflict and unrealistic expectations.

Visit the Divorce Lending Association for resources and strategies on divorce mortgage planning.

Speaker 1 (00:04):

Well, you're listening to Divorce Literacy, where we dig deep into the issues of divorce, including areas of finance, assets, real property and mortgage planning. I'm Jodi Bruns, president of the Divorce Planning Association, and today we have a very special guest with us, Nancy Hetrick. Hello, Nancy.

Speaker 2 (00:25):

Hi. I am so happy to be here. Thanks for having me.

Speaker 1 (00:28):

Absolutely. Nancy is the founder and c e o of Smarter Divorce Solutions and a top divorce financial planner in Arizona. She's also the founder and c e o of Divorce Financial Training Center as well. You know, Nancy, I was reading up on you trying to put together a strong introduction and my goodness, you're quite impressive,

Speaker 2 (00:50):

<Laugh>. Aww, that's, thank you. That's very humbling. <Laugh>.

Speaker 1 (00:54):

You know, some of the, a couple of the bullet points, you know, that I wrote down was, you know, you're an extremely experienced and successful financial planner. Yeah. You're a divorce mediator, which is awesome because you bring that financial expertise into the picture. What I really love also is that you're a trainer, you know, you share your expertise with other financial planners looking to get into the divorce space, and this is where you and I are very similar there, you know, and I, I literally love all of that about you. So I was super excited when we connected, you know, earlier this year to start, you know, getting to know each other better, collaborating on things, et cetera. So we're both in the divorce space. It's a unique one for sure, sometimes quite challenging, but I would love to know, you know, where, where did your inspiration come from to take your divorce more or your financial planning business into and focus on working with divorcing spouses?

Speaker 2 (02:03):

Yeah, yeah. You know, I think it for almost, let's just put it this way, for the vast majority of professionals that do choose to work with divorcing couples, I think we are touched by our own divorce stories, whether children of divorce or we've gone through our own divorces, or we had a family member that went through a divorce and we witnessed divorce be so much more painful and costly than it needed to be. And we became then just really passionate about helping people find a better way to do it. And so in my situation, it was very much my own divorce in 2007, which came unexpectedly for me and, you know, involved in fidelity and I really, you know, did not wanna waste a bunch of money on attorneys, and we thought we could just kind of work things out. And due to the lack of resources that were available, I ended up making so many mistakes that it was in 2007, right at the beginning of the housing collapse

Speaker 1 (03:14):

<Laugh>. Yeah. And we,

Speaker 2 (03:15):

I remember that. And we had three properties. We had a primary home and two rentals, and the agreement was that he would take the primary home in one rental, I would take the other rental and a retirement account, and we would both refinance. By the end of the year I refinanced mine. He did not. And a year and a half later ended up letting both of them go into foreclosure with my name on them. Hmm. And because the original documents were not structured in any way to protect me, there was absolutely nothing I could do. And when he turned angry after the divorce and started, you know, really just not being cooperative at all, I had this do-it-yourself divorce decree where absolutely nothing was enforceable. And so ultimately I ended up spending 30 to $40,000. I was back in court three times. So I learned my way around the court system in a, in a rather unfriendly way.


And the whole time I just thought, you know, this is just crazy. Why are we using this criminal system to deal with family issues? You know, I, it was the weirdest thing when I had to take the stand and be questioned as though about, you know, as though I were some on trial for some crime. It, it just was very, very strange to me. And I thought, wow, this is this. I've gotta be part of helping people do things better and, and as, and, and I have especially a soft spot for women and making sure that they have the education and financial knowledge they need not to screw it up like I did.

Speaker 1 (04:57):

You know, again, so similar our paths. Well, funny thing is, was this exact same time I was going through my divorce and the mortgage industry crashed and I was in the mortgage industry, <laugh>. Yeah. You know, but it's the same thing. You know, you start recognizing these gaps or lack of knowledge, or cohesiveness is probably a better word, between all of the actors, you know, and everyone involved. And that's really what got me interested in divorce, mortgage planning from the mortgage perspective, because I saw everything that was being missed or misconstrued or done wrong as it related to our home and the mortgage financing. So it's quite interesting, you know, we both went through that kind of an experience and I, I like to say that I used the opportunity of turning my, you know, pain into passion. Absolutely. You know, and that's absolutely where I started, you know, doing this. So, you know, I I love that, you know, and I get the question often, and I'm just gonna ask you this, I I'm asked by Maurice Professionals all the time, do you think I will only be successful working with divorcing clients if I've gone through a divorce?

Speaker 2 (06:18):


Speaker 1 (06:18):

You know, and, and you probably get that question too. And my answer is no. You know, as long as you're empathetic and you can understand what's going on, and you don't just see, you know, tunnel vision, that you don't have to necessarily have gone, have had to go through a divorce to be successful helping divorcing clients.

Speaker 2 (06:42):

And, and that's very, very true. And I'll add to that though, you've gotta get the training mm-hmm. <Affirmative>, right? You have to get the training, you have to be willing to get out there and really explore the periphery of our field. So for instance, you mentioned that, you know, I'm a mediator, so as I got working with folks, going through divorces, focusing on the finances, the inevitable emotions started coming at me and the conflict and the trauma that these people were going through. And I've wanted to be able to help the whole human being. And I was woefully unprepared for the human side of divorce. And so I went through curriculum as a certified divorce coach, and I went, I've had hundreds of hours of mediation training. I'm trained in collaborative divorce. I'm actually in the process right now of becoming a certified financial transit and working with the, the human side of financial transitions. So maybe, you know, divorce for sure. But, you know, widows, sudden money lottery winners, there's all kinds of, of psychological fallout from those kinds of, of life up heaving events, right. So I think empathy is great, and having, having that inherently be part of who you are, and you have to be willing to pull the statutes in your state, understand the basics of the law, ask questions of, of attorneys and mediators when you're, when you're networking, so that you can be more and more and more of a holistic resource for your clients.

Speaker 1 (08:34):

So do you well, for any of our listeners who are fairly new to the process or the concept of, you know, oh, I have, you know, not just that I have to go hire an attorney, but now, you know, I'm looking at other professionals, you know, what would be the one thing that you would tell somebody who is perhaps just starting the divorce process and all the thoughts that go into it, the importance of involving, you know, that extra professional, the divorce, you know, financial planner, because you know what they say, you know, a hundred percent of all divorces have some type of financial settlement.

Speaker 2 (09:18):

Absolutely. You

Speaker 1 (09:19):

Know, whether it's checking accounts to the house, to anything, you know, what, what would be, you know, one of the things that you would say to them as to why this is so important?

Speaker 2 (09:31):

Yeah. Well, often it, it's really the best place to start because a lot of people still don't realize there is no law in any state that says you have to have a lawyer to get a, to get a divorce. You, you simply don't. And so as we, the credential that we typically have as divorce financial planners is a C D F A certified divorce financial analyst. And we can help you get you educated in all the different options. A lot of people don't realize there's, there's five different ways to get a divorce, depending on how much control you wanna keep in your own hands, how much self-determination you wanna have as a couple, how cooperative you can be as a couple or not. And, and it ranges along a spectrum and so often that the financial expert can be the best educator of what all the different options are.


 And then I would, the, the second thing I would just say is, you know, I think still a majority of people hire an attorney, and the biggest mistake I see people make is thinking their attorney understands finances. Mm-Hmm. <affirmative>, they don't, they're not trained in finance, they're trained in law and writing and process. It's the rare, rare, rare family law attorney that has any training in finance. So often I find that the non C F O spouse will hire an attorney and the attorney will say, here, fill out this financial affidavit for 'em on what your expenses are, what all your assets are, and all your debts. And they, they look at 'em like a deer in the headlights and go, I have no idea. I've delegated the finances for 20 years. I don't know what we have. And the attorney is kind of at a loss there.


And so that's where someone like me can come in, partner with that person, help them understand the whole everything that they have, but far more importantly, help them look toward their future and understand what their needs are going to be and what are they envisioning, and is it even realistic, you know, kind of being that agent of reality to guide their way through that process. But honestly though, my favorite way is working as a neutral with couples because that's when I can be really, really creative with couples. We do things all the time that you could never do if it was ordered by a judge. Yeah. You know, and, you know, on the lending side, you know, creative things with real estate where they continue to own it for a few more years together, and we split things later. We, you know, do a bunch of playing around with mortgages. I look at all the tax impacts and mm-hmm. <Affirmative>, how can I help them keep more of their own money and give less of it to Uncle Sam? Yeah. So that's the creativity side that I just, I adore that really,

Speaker 1 (12:37):

You know, going back to your comment, you know about how some people are like, why don't I, I didn't handle the co the finances in my house. I am shocked sometimes by that, you know? And, and even in today's age, you know, where everything is so accessible. I actually was having a conversation with a, a wife not too long ago, and this poor lady, you know, and she's later, you know, she's a divorcing senior, she literally didn't even know how to handle her checkbook. And it's like, yes, some people still write checks. <Laugh>. Yeah. I was surprised when we moved down to Alabama. Everyone was like, oh, well just send us a check. And I'm like, I don't even know if I have checks <laugh>.

Speaker 2 (13:22):

That's so funny, because I grew up in Montana and the same thing when I go home, go with my sister in the grocery store and she starts writing out a check. I'm like, what are you doing? What?

Speaker 1 (13:33):

Oh my gosh. But it, it, it just baffles me, you know how there is no sharing of some of that, you know, duties and sh the sharing of the financial aspects and stuff.

Speaker 2 (13:46):

Right. You know, that was a very deeply ingrained in our culture in the seventies, you know, and interestingly, 80% of my practice now is divorce over the age of 55. Yeah. And so it's a very, very different generation. But, and even with that, I've had, you know, dual, dual professional couples where it's always one person's job mm-hmm. <Affirmative>. And often it's not that anyone's trying to be manipulative or anything like that, they, it just simply wasn't their job. Doctors are the worst <laugh>, they don't manage their money, they delegate it to their spouse. And that's because they're really good at what they do, and that's boring to them and they're not interested in it. Right. Yeah. So it's funny how some of the most high income earning spouses I work with can be the most financially inexperienced.

Speaker 1 (14:46):

Yeah. It, it's crazy. So I have another question for you, given the historical process, if you will, of divorce, where they hire an attorney, file the petition to start the entire legal process. And, you know, sometimes you and I both, we have to be in a position of unlearning, if you will, of the attorneys, their traditional way of case management. So do you ever come across, you know, divorce attorneys who are handling their case and they, they don't feel the need to involve divorce financial planning?

Speaker 2 (15:29):

Always. And it's probably one of the, one of the most frustrating things for new practitioners. They think they're gonna get this credential and the attorneys are gonna just think that, oh, we're so happy you're here. Gosh, I've been looking for someone like you. And instead they get greeted with, yeah, I have a gal in my office that does that, or Yeah. You know, we don't really need that. Well, what it is, is they, they don't understand the value because they've never used it. And what I have found here in Arizona, because we're a community property state, but let's face it, even in states that are not community property, they're still equitable division. Right. And they pretty much are still looking at a 50 50 split. What the attorneys do, if there's no financial experts involved, because they're not financial people, is they take every single asset and every single debt and hack it in half.


And, and that's just what a nightmare for clients to have to go through the legwork of dividing every single account. And it's just like, really? But they don't wanna look at the tax impacts. So that's kind of their C Y a, right? Mm-Hmm. <affirmative>. So what's fabulous is I really have found those attorneys whose egos don't get in the way, who genuinely want the best outcomes for their clients. These are family law attorneys that typically rarely go to trial, rarely go to trial, and they are very, very collaborative in nature. Yeah. And in fact, I had been doing this work for th for about four years and it happened for the very first time. And I was stunned because I thought it was gonna take another five years. Two litigating attorneys both knew of me and they brought me in as a neutral nice. On a litigating case.


And I was just, I was like, wow, this is amazing. Because the, the couple just needed education about the retirement plans. They had very complex retirement plans and we needed to understand what it was we were dealing with. And once we took all that uncertainty away, they just, they immediately had a settlement and it was easy peasy. And needless to say, those attorneys work with me all the time now <laugh>. And so, but it is a challenge. And there's a shift happening which I, that I'm really, really excited about with the young attorneys coming out of law school today. Hmm. They're looking at divorce very, very differently. They're far more collaborative. They wanna stay out of the courtroom, they're getting trained as mediators and they're approaching it in a more purpose-driven way.

Speaker 1 (18:25):


Speaker 2 (18:25):

And this is that, you know, millennial, gen Z, they wanna do something they feel good about and I think it's, there's gonna be a really beautiful shift in our culture, I think. That's been fun to watch.

Speaker 1 (18:41):

That's good. Well obviously, you know, at the Divorce Land Association we're focused on trying to integrate divorce mortgage planning more into the process rather than an after the divorce, you know, where it was typically, well this is what support income is gonna be, you get the house, but you have to refinance it, you have 120 days to do so. And you know, even if they're going to sell the home and then go purchase, there are so many dynamics that I, I don't expect an attorney, I don't expect a financial advisor to know the mortgage world. You know, and it's just another example, if you will, how everybody, all of us different professionals we're stronger together. Right? Oh, absolutely. And you know, even for example, as a financial planner, if you are looking at, you know, rental properties that a couple has, et cetera, you're gonna calculate cash flow differently, then I'm going to calculate it for the purposes of using rental income for a mortgage.


You know, and it's just cuz we have to go by, you know, percentage of, you know, potential vacancy rates and different things to calculate income that we could use to qualify that client for a mortgage. You know, so even us, you know, we look at things different and I always, I always try to explain to everybody that we all have a different perspective and how we look at things and how the verbiage and the settlement agreement can completely remove all options to obtain Absolutely. Financing. Absolutely. Yeah. And so obviously our message and you know, that we're trying to really get out there is the importance of divorce mortgage planning, you know, so like in your practice when you have clients and there's the marital home or other real property, you know, how are you incorporating divorce mortgage planning into your process and your case management?

Speaker 2 (20:51):

Yeah, absolutely. And so especially when I'm working as a neutral or when I'm advocating for that, that non c f o spouse who we know is, is going to be relocating, then I get someone like yourself to, you know, help them strategize options. What are they gonna be able to qualify for? When would they be able to qualify for it? You know, is there anything we need to know specifically about structuring spousal support so that it will get them qualified for a home? We've, we've done some really creative agreements where even though spousal maintenance wasn't really on the table, we created it to get this person to be able to qualify for a mortgage. And so, you know, rather than getting some part of a retirement account, we created a spousal maintenance stream so this person could, could qualify for a home. And when, when everybody's cooperating and working creatively, like you said, that's when we can really shine and help people.


 So I do think it's a, it's a wonderful trend to get people out of the courtroom and I think if we're gonna see it continue, there was a, there's a wonderful bill in, I believe it's Minnesota, where they're actually creating a track now completely outside the court system. Hmm. So if a couple says we are going to mediate or we're gonna do a collaborative divorce, they do a specific kind of a filing that basically tells the court we don't need you. It never goes on the docket, it never goes on the judge's calendar. It becomes a completely outside of system divorce and talk about freeing up the court system. Yeah. Giving people that avenue. Right now in, in Maricopa County, which is the greater Phoenix metro area of Arizona, we have 16 superior court judges and each one has 800 to a thousand divorces on their docket.

Speaker 1 (23:02):


Speaker 2 (23:03):


Speaker 1 (23:04):

That's crazy.

Speaker 2 (23:05):


Speaker 1 (23:05):

Insane. Well, Nancy, I really appreciate, you know, your time today and you know, where can our listeners go to learn more about you?

Speaker 2 (23:15):

Well, certainly about me personally and my business. My business is Smarter Divorce Solutions and it's just smarter door solutions.com. We actually have locations in Indian, Indianapolis, Wisconsin, Charlotte, North Carolina, and our main corporate center here in Phoenix, Arizona. The gift of Covid is we're working virtually across state lines and so, you know, we, we have resources for folks, so, so look us up on lines, smarter divorce solutions.com. I also wrote a book, if You Are Facing Divorce, I wrote a book kind of about my own divorce story and it's, it's a very quick, easy read. Every book I've ever read, read on divorce, read, it's like a textbook and you can't read that stuff when you're going through divorce. Your brain is just, is too much. Yeah. This book Washing make you laugh and so it's called Divorce Is Not For Dummies, how to Cover Your Assets

Speaker 1 (24:12):

<Laugh>. I like that. That's

Speaker 2 (24:13):

Available. That's available on Amazon.

Speaker 1 (24:16):

Awesome. Well, Nancy, your amazing, I am so thankful for your time, your expertise and always your willingness, you know, to share with all of our listeners, me, even as a another divorce professional. I just appreciate you very, very, very much. And well, is there one final thought that you would like to leave our listeners with today?

Speaker 2 (24:40):

Yes. Regardless of what kind of divorce process you choose, be sure that you assemble the right team for your specific situation and rarely is it gonna be only one person.

Speaker 1 (24:59):


Speaker 2 (24:59):

You'll actually save money in the long run.

Speaker 1 (25:02):

Yeah, I agree. Well, thank you again and I look forward to talking to you again real soon.

Speaker 2 (25:08):

Awesome, Jodi, thank you so much for having me and I'm happy to come back anytime.

Speaker 1 (25:12):

Awesome. Thanks.