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Introduction to Seth Nelson with Matt Feret [1:09]

Matt Feret:

Hello everyone. This is Matt Feret, author of Prepare for Medicare and Prepare for Social Security Insider's, guidebooks, and online course training series. Welcome to another episode of The Matt Feret Show, where I interview insiders and experts to help light a path to successful living in midlife retirement and beyond. Seth, welcome to the show.

Seth Nelson:

Thanks for having me, Matt. Excited to be here.

Matt Feret:

Tell everybody what you do, how long you've been doing it, and how you help people.

Seth Nelson:

So, I'm a divorce lawyer, so right away people are like, he does not help people.

Matt Feret:

Well, I don't know. I mean at certain times in life for some people I'm sure you're very helpful.

Seth Nelson:

Yeah, so I'm a divorce lawyer. I've been doing it for over 16 years. I've been practicing law for over 20 years, and I'm also host of a podcast myself called How to Split a Toaster, a divorce podcast about saving your relationships.

Matt Feret:

Thank you for that. So, 16 years, then you've probably seen at all, you're based, we were talking off camera, you're based in Florida.

Seth Nelson:

Tampa, Florida. Yeah, well, grew up here and kind of meandered my way into the law eventually, I've been in Tampa my entire law firm career.

Matt Feret:

So, this show is geared towards, let's say, middle age, kind of older adults, retired, near retirement, older than retirement, and beyond. So, let's pick an age, whatever middle age and older adults means to you. Let's pick one in our brains and go with it. What are the trends you're seeing around divorce and let's call it age fifty, forty-five, fifty-five, let's just call it divorces when people have been together for a very long time. What are you seeing out there right now?

Seth Nelson:

Actually, the highest rate of divorce in age groups now is 50 and older and has been on your show before, it's called Gray Divorce, and that is a specific segment of our population that are getting divorced at a much older age and it brings with different issues than when you're getting divorced at thirty-five or forty or forty-five, when you got kids still in school or young kids and you have to deal with a parenting plan. It's all financial when it comes to gray divorce because you usually don't have any kids left that are minor children.

Unpacking Gray Divorce Trends with Seth Nelson [3:46]

Matt Feret:

From your perspective, why is this happening? Gray divorce?

Seth Nelson:

There's a lot of trends in our society that I think add to this. One is that historically marriage was done for business reasons, right? Back in the twenties and thirties and forties and fifties, sometimes even sixties, women went to college to meet somebody to marry. Now women go to college to get a career.

Matt Feret:

Yeah. That was called getting your MRS degree, right? I think back in the day, exactly, I think I heard my mom say that jokingly.

Seth Nelson:

But there's a little truth to every joke, so that doesn't happen anymore. And so, women are more financially independent than they ever been in the history of the United States. With that comes the ability to live on your own and not need a man to support you. And when you hit retirement age, even if you got your MRS degree and you're getting divorced now, hopefully if they've done proper financial planning, they're living off their retirement. So, if you get divorced and you're going to split that retirement, your standard of living might go down a little bit. You're going to have two households instead of one with the same amount of income, but you get to go live your life and you're like, this relationship hasn't been a healthy, loving, caring, supportive relationship in a long time, and I only have so many years left in my life and I want live it in a different way.

Matt Feret:

So, I hear that can be one factor, and I agree with you, and I know that more education, more job opportunities, the percentage of women in the workforce all-time highs, the percentage of women now attaining four-year degrees more or higher than men. That's not a super recent phenomenon, but so one of the pieces you said there is where you've got two separate incomes makes it easier to leave. But let's say if you are getting divorced in your, let's say 50, right? 50 gray divorces, why that specific age? Because if everybody's been working, let's say full-time or part-time and going back to work, is it something about, as you mentioned, the age of look, I might have 20, 30 years left here. Do I want to be with this person or is it, or does something happen? Does somebody step out, do the kids leave? Are there triggers?

Seth Nelson:

The main thing that happens in divorce is usually there's some sort of life event. So, one, we've all heard it, I stayed with them for the kids or I could not bear the thought of not seeing my children every day until they reach college age or beyond. I stayed in this marriage because I want to see my kids every day, but now they've graduated high school, they're off in college or graduating college, and therefore that reason is no longer there. You're not seeing them every day anyway. They're off at college. You're lucky to get a text once a week. You're living it. I'm living it. So, with that, it's like now it's time for me. And you've seen these dating apps that will say it's my time and that's for people that are 50 and over, but that same concept flows through in divorce.

Matt Feret:

In your experience, do you see couples breaking up divorcing into something? In other words, do they already have a relationship that may have been a friendship that they, are they leaving the current marriage for something or they're literally leaving the marriage to be single?

Seth Nelson:

That's a great question. I see both. The first one you ask; you're leaving because you're into something else. I call that the Facebook divorce. I connected with my high school sweetheart on Facebook, and I stepped outside of my marriage. Now, I always think that is a symptom of a poor marital relationship. If you're in a great marital relationship, that typically doesn't happen. Something else is going on. But a lot of it is just I'm done. I'm done with the financial infidelity and not being responsible with money. I'm done being treated this way. I'm done not being able to go out with my girlfriends and being punished for it. So that is more what I see. Typically, when men and women get divorced, men will remarry quicker than women. And I always joke, we just need somebody, and the women are like, I'm good by myself. I got my friends. We're good. Right? The Golden Girls show. That would be an example. All these women together supporting each other, men just typically don't do as much of that.

Matt Feret:

Before the actual divorce happens, in a gray zone, do you see couples coming to you? It's kind of a three-month, six-month, somebody's light switch went off and this is what we're doing. Or have you seen people really try to work through years of marriage counseling and reading books and trying to change and it's just not working?

Seth Nelson:

Not immediate at all. The average time from the first moment someone thinks, in their brain even, doesn't say it out loud, I might want a divorce, or I'm done with this, and the word divorce is in their mind, from that moment to the time they talk to a lawyer is usually three years.

Matt Feret:

Wow.

Seth Nelson:

I don't think people come into this lightly. It's not like a light bulb went off and you're like, I'm out. This is even true on cases with domestic violence, on cases with infidelity, on cases where maybe your spouse has mental illness or addiction issues because it just takes time to process all of that. And unfortunately, with domestic violence, there's the victim syndrome where there's the cycle and to break out of that is extremely difficult. So, it's not like someone just turns on a switch and wakes up one day and says, I'm out.

Matt Feret:

Even though it might feel that way to the other partner.

Seth Nelson:

It will absolutely feel that way to the other partner because they don't see it coming. Oh, I knew we were having troubles, it wasn't right, but everyone has their troubles. We'll get through it. Well, you're not getting through it unless you're going to do something about it, right? If you got that ache in your shoulder or your knee hurts and you're not going to do anything about it, it's just going to get worse. But that also goes to the main reason in divorce in general, in my opinion, and I've seen thousands of them is, and it's going to sound cliche, communication. Where was the breakdown? And some people said it was like, 20 years ago and we've just been living as partners, not as a married couple.

Matt Feret:

Do you hear people and see people reliving their past? You said there's kids are out of high school or kids are out of college or trade school or whatever it is. Do you see that a lot of reasons that one of the partners is going back to things that happened 10 years ago that got buried or 15 years ago. Is that common?

Seth Nelson:

Yeah, I call that a Tuesday. That happens all the time, Matt. I mean we're talking human nature, human psychology, and they've just had enough. Now, I very rarely will ask a client or a potential client, why are you getting divorced? It's not relevant in the legal analysis. And here's the thing, if there's one takeaway for the listeners to take away today, if you're going to go through a divorce, you're going through two divorces. There's the legal divorce, which is a legal system set up by the states with judges and lawyers and clerk of the courts or whole judicial system. And then there's the emotional divorce. Now the emotional divorce for whoever's filing or calling the lawyer first, that has started years ago, but that emotional divorce will not end until at least the legal divorce process has ended. You cannot get over or through your emotional divorce until your legal divorce is over.

And once it's over, it might take a year, two years, three years of enduring yourself. Are you going to seek mental health counseling? Are you going to say, where did I go wrong? Why did I let myself be treated this way? What about me do I need to work on? But that's on you. No one's slowing you down on that other than you. The legal divorce can take a long time. As a lawyer, I can only go as fast as the slowest person or entity. And here in Hillsborough County, these judges have hundreds and hundreds of cases. So, if I'm ready to go to trial today on a two-day trial, that judge's calendar might not be available for four months.

Breaking Down the Separation Stage of Divorce with Seth Nelson [13:46]

Matt Feret:

Well, let's talk about the interim and that interim is separation. And as I understand it, there are two types of separation. There's kind of in the home trial separation, sometimes outside of the home trial separation and then there's legal separation. Do you see couples over the age of 50 or in the grade divorce arena doing that either inside their own home in a different bedroom or somebody moves out and says, okay, we're going to do this for six months, then reevaluate, or what's it like? What's the difference between that side of couple that's been married twenty, twenty-five years versus a couple that's been married three or five?

Seth Nelson:

Yeah, so gray divorce, you see that more where they'll just go to a separate bedroom. In Florida, there is no legal separation and a misconception, I don't know where it is on the internet, but people find it and it's wrong, is if I leave the house, do I give up rights to the house? And the answer to that in Florida is absolutely not. No. So check your local jurisdiction, whatever state you're in, meet with a lawyer who's licensed in your state that focuses on family law to get these legal specific questions answered. But practically, yes, I see people sleeping in separate bedrooms and sometimes they're like, we've been sleeping in separate bedrooms for years. This is nothing new.

Matt Feret:

Sometimes that word sleep divorce doesn't actually mean divorce. It just means I get better sleep. My partner snores, and this is what we decide to do. It's completely, well, mostly I guess innocuous.

Seth Nelson:

Actually, on How to Split a Toaster, we affectionately call it The Toaster, we just had someone on to talk about what we call sleep divorce, where someone snores so loudly that it causes other problems in the relationship that ultimately lead to divorce. And it was actually from a guy that created this mouth tape that is being used now where you cover your mouth with this athletic tape, and it makes you breathe through your nose, and it makes you sleep better. And actually, professional athletes are using this, so it's like no joke. This is like a real thing.

Matt Feret:

Tape your mouth shut?

Seth Nelson:

Yeah, it's called hostage tape. You should check it out.

Matt Feret:

Oh, that could even be, might be multiuse if you're going through a divorce.

Seth Nelson:

Yeah, let me tell you, my wife wants me to use it not during at night.

Matt Feret:

Self-censor yourself. I'm going to say this. Hold on one second. Reach in your pocket.

Seth Nelson:

Exactly.

Matt Feret:

Put the tape over your mouth.

Seth Nelson:

But no, this happens all the time. But the other thing that happens and why sometimes someone will stay in the marriage is the reverse of what I said at the beginning, is because they're worried about the finances, or they don't know the finances. So unlike if you're in your thirties, you've been married for five years, you've got some kids, you might not leave the house until you know what the parenting plan is, and in a gray divorce if you don't know what the money is or you don't even know what your income is to fill out an application for a rental, right, a new apartment or rent a house, well then you kind of got to get into the substance, right? How are we going to divide the assets, and in Florida that's called equitable distribution, the division of assets and debts. Other states were call it other things. Of course, we all know alimony a payment from one spouse to the other during the pendency of the case is temporary alimony, or after the case is over, it's called alimony. Some states still have permanent alimony. It could go on until you die or until she dies or until someone remarries. If the recipient remarries. Some states cut it off at a certain age, some have a formula for how long you've been married. If you're married for more than 20 years in Florida, you can get up to 75% of the marriage. So, all these states do it differently, but finding out this information and finding out how much money you have and how much money you need to live is one, just good financial planning. But you certainly need to know that if you're going through a divorce.

Navigating the Financial Complications of Gray Divorce with Seth Nelson [17:48]

Matt Feret:

So, let's get into that money piece a little bit because I think those are big questions for both sides, either couple. Let's take it in two scenarios if you don't mind. First scenario is if both partners are working, and obviously no one's going to earn the exact same amount of money, I'm going to use a heterosexual couple here, just for example. Female is a lawyer, earns six figures, male is, I don’t know, in business and also earns six figures, but female earns 50% more. So, they're both earners, they both have degrees and they're both working full-time making good incomes. They've been married 20 years. What does that look like? And I know depended upon state, but what does that look like?

Seth Nelson:

Okay, so I'm going to take it in Florida. I'm going to do some quick math with you. We have husband making a hundred thousand dollars a year. You said sick figures wife making $200,000 a year. So, with alimony, the questions are this, how much am I going to have to pay potentially, what is my potential alimony financial exposure here and for how long? So how much, let's start with the how long in Florida, as of July 1st, 2023, the statute just changed. In a 20-year marriage, you can multiply that by 0.7575% of the marriage. The most length in time would be 15 years. That's the maximum. There are always exceptions to the rule, but generally 15 years. So, if you have someone who's 55 in this case, the wife let's say making $200,000 a year, and let's say the husband is 57, the wife could have to pay at max until she's 70. Now everyone's going to be like, seriously, doesn't she get to retire at the normal retirement age in Florida? The answer to that question is yes. You get to retire and there's a runway that you get to land on and say, judge, I'm going to retire soon. My income is going to drop. I shouldn't have to pay what I'm paying now. But if you still have plenty of money and the other side still needs it, and we'll get to that in a minute, you still might have to pay up until 70 and the normal retirement age is now for that probably age group is about 67 and a half. You might not want to go back to court and pay the legal fees over three more years. The legal fees might eat up that payment anyway, but how long? Now let's get to how much, let's say 200,000. Let's just put them at a 30% tax bracket. So, when you do 30% times, they're taking home $140,000 a year. Let's just say that the husband takes home $80,000 a year because he is on a little lower bracket. So, if you take 140,000, and I know I'm doing a lot of math here, right? Divide it by 12. She's bringing home roughly $11,500. I'm rounding. He's bringing home $80,000. Divide that by 12 for the month he's bringing home roughly 6,500. So, she's bringing home 11,500 a month, he's bringing home 6,500 in Florida. You subtract those two numbers; the difference is $5,000. The maximum that he can get is 35% of that difference. So, her worst day in court on these facts, $1,750 a month for 15 years. Now that doesn't sound bad unless you're paying it right? I just said you're making 200 Gs, you only have to pay $1,750 for 15 years and you're like, oh, that's all right. Okay, Seth did that quick. That's easy. Yeah, you're not writing the check, right?

Matt Feret:

Yeah, and it's a quarter of a million bucks over 15 years.

Seth Nelson:

Exactly. So that's the max in Florida, it's the lesser of all that math I just did or what is the husband's need and what is the wife's ability to pay if they're saddled with debt when they due to the division of assets and debts and she's living paycheck to paycheck because they have loans against their 401k, they've taken out college loans, premarital even during the marriage because she went to law school and she's still paying off her law school loans. If they bought these fancy cars that are running them 12,000, 1,500 bucks a month, they're just overextended. He might have a need, but she might not have the ability to pay. In all of my cases, I tell my clients, I hope this is a no alimony case. In this case, if the husband's like why? And he's told me the fact scenario you've told me, I said, let's look at your assets because if we're going to divide up assets and you're going to have a million dollars liquid because you've lived financially sound, you've saved your 1,750 a month times 12 is $21,000 a year. If you have a million liquid and you can get 5% on your money, that's $50,000 a year of income. You don't need alimony because that income spinning off of that million, you're never touching the principle. I'm not making you spend the principle to live. You're going to pay yourself. And if you have enough income where she doesn't have to support you, then it's a no alimony case. So, I wish all of my cases were no alimony case because that means you have enough to meet your needs and you don't have to get a piece of paper, which is all an alimony. Is the court saying they have to pay doesn't mean they will. You might have to go enforce it. So, the best thing you can do is be financially self-sufficient.

Matt Feret:

What happens to four, and we'll stay with that couple for a second. What happens to 401Ks, IRAs? If you've got a house, what if you've got a rental property? What if you've got a boat because you're talking Florida.

Seth Nelson:

So, you've just described equitable distribution, the division of assets and debts, and this is the same across the country on what you might be dealing with in a divorce. So, think of the word peace. P is the parenting plan. E is equitable. A is alimony, we just talked about it. C is child support. The last D is everything else. Attorney's fees, cost in the process, and the hypothetical we're giving, we're going to say there's no kids. So, we don't have parenting plan, we don't have child support. A lot of gray divorces. You have adult kids, which we'll talk about. We have grandkids, which we can talk about, but from a legal perspective, they're probably not involved in the legal divorce. They're part of the emotional divorce. Absolutely. But in the legal divorce division of assets and debts, you first start with identification. Let's get a list of everything you own with your spouse on your own or with any third party or entity. So that boat you mentioned, you might've gone in with it with your buddy, you both own it. Then what debts do you have individually, joint or with third parties or entities? We've captured everything. Now it's classification, Matt. We have to determine what if anything is marital. If it is, we're going to divide it equitably or non-marital. So, I would ask someone, let's say the wife in the scenario, did your husband give you an engagement ring 20 years ago before you got married? Yes. Do you still have it? Yes. In Florida, that is a non-marital property. It was a gift from a boyfriend to a girlfriend before marriage. Now Matt, you dated women before you got married. When you split up, you didn't get all the gifts you gave her back, right? No, she kept them. She probably hocked them, but she kept them, right? So, it's the same in divorce. If you gave your now spouse a gift prior to marriage, you don't get that back. But if you gave her matching diamond earrings or if this hypothetical, the wife received matching diamond earrings on her 10th wedding anniversary, that was a gift between spouses during the marriage. That's marital property. So, you can either let her keep the earrings and she owes you half the value. You can keep the earrings; you owe her half the value. Or you can do what some people do, which is really stupid. You each get one earring, or you can sell it and split the cash. Those are the choices.

Matt Feret:

I'm a little too old for one diamond stud.

Seth Nelson:

You think so? The left ear, like back in high school days. So, these are just the concepts, but then you take those to things much bigger than diamond earrings. You have a 401k, you've been putting in that money all throughout your marriage. You don't have anything in that 401k before you got married. It's all marital. It's going to be divided. You have an IRA people like it's an IRA individual retirement account. It has my name on it. Her name's not on it, his name's not on it. Whichever way you want to say it, it doesn't matter. It was earned during the marriage. It's divided. A pension earned during the marriage won't get paid out until another 10 years. Portions of your pension are going to go to your former spouse. The house with equity bought during the marriage, marital money's paying down that debt. The debt is marital, the house is marital, the equity is marital. How do you divide it? You can sell it. Someone can buy someone out. Then you got to get them off the mortgage. The thing to remember in a divorce, because when you are gray divorce, you're trying to conserve wealth, there is no tax implication on any money that exchanges hands in the divorce. If you have an IRA and you got to give half to your spouse, you don't have to cash it out, pay the penalties and taxes. You just can transfer IRA to IRA. No tax consequence. You sell the house, you split the cash between the two of you. There's no tax consequence. If you're selling your house at such a gain where you have capital gains, you both will have that, but between each other, no tax consequences. So that's really important because that can change the dynamics of deciding what you get. Now ultimately, when you pull money out of your IRA in the future, that of course will have a tax consequence and the boat, he wants to keep the boat with his friend. That's fine. How much is it worth? It's upside down. Okay. She's responsible for half that upside down debt.

Matt Feret:

I can imagine after 20, 25 years, 30 years of asset allocation or asset ownership, it can take a really long time. I mean that's in my amateurish non-lawyer brain. I was like, yeah, okay. House, 401Ks, you get a rental property, cars. But you're getting down to the nitty gritty of, remember that time I gave you a diamond tennis bracelet for your 10th anniversary? Yeah, the half that's mine. Ooh, that's really specific.

Seth Nelson:

Right? So, the thing lawyers hates talking about is personal property. I mean, if you have a watch collection that's worth $2 million, yeah, we'll go get it valued. But if we're talking one watch and you're going to tell me that that Rolex is worth 20 grand, do we really want to be spending legal fees on that? Here's where people get upset though. People live their life when they're married. Even if things aren't going well, they think they might get divorced. They don't do what I call divorce planning. They just live their life. So, an inheritance is a gift from a third party to one of the parties. Just like if your mother gave you a birthday gift and it was a check made out to you and you had a separate account that you opened it up with that check, non-marital money, your mom gave you the gift, your spouse didn't give you that gift. Inheritance is the same. Your mother passes, hopefully not God forbid, but if she does, she leaves you inheritance. If you take that inheritance and put it in a separate account, check your local jurisdiction. This is Florida, that is non-marital money. But the moment you take that cash, and you put it into a joint bank account or a bank account only in your name that has marital money in it, you've commingled it and people are going to be like, really? She's about to get half of my parents' inheritance because I put it in a joint account. And I'm like, yep.

Matt Feret:

Wow, I didn't know that.

Seth Nelson:

So, there's a lot of things that people look back on and say, he had a premarital house. I had a premarital house. We sold my premarital house, bought a new house and made it joint. He still has his premarital house. Now a portion in Florida might be marital, but it just stings. It just stings. And then you go to the other side, you should do the right thing. It wasn't your money, it was inheritance from her parents. Well, she did X, Y and Z, right? Coming back.

Matt Feret:

So, let's take the second scenario, which is male works and female quits. Her job is to take care of the kids. Right now, the kids are out of high school or out of college. She hasn't had an income, or maybe part-time income, for 20 years. He is a lawyer, successful lawyer for 20, 25 years. So, what happens then?

Seth Nelson:

So equitable distribution does not change division of assets and debts. We just went through all the same. You've just changed this fact scenario for an alimony claim. Everything else is the same potentially 15 years, 20-year marriage, still 75% in the length of the marriage. We still do that math that we did on what's their net incomes and what's the difference between their net incomes. The only difference is you said part-time or no work. So, if she's not working, you can do a vocational evaluation and say, judge, she should be making 60 grand and she's not, but she could be. She's not putting forth her best efforts to find employment. Or judge, it's really hard. You don't even have to bash her. It's hard. But here's what she could do. I have an expert that says, here's a job that's available in Tampa, Florida that meets her skillset making 60 grand a year. You can't make her apply for the job. Even if you did, you can't make the company hire her, but you can impute, you can act like she's making 60 and then we just do the math all over again.

Matt Feret:

Does that work?

Seth Nelson:

Yeah, all the time. I have a case now we have a vocational expert. We're going to court. This is what he could be making. So, the issue becomes having these conversations 15 years ago when she says, I want to stay home with the kids. And he says, I think it's good for you to stay home for the kids. She's taking herself out of the workforce. And if she does it at 35 and now she's 50, you've missed 15 years of building a career to hit your prime earning ages in your fifties and now you're starting like you're a 35-year-old or even lower because it's hard to get back in. So, you have to have these conversations a long time ago. So, any of your listeners out there and they're talking to their kids, and you think it's wonderful for them to stay home with the grandkids, you got to have these conversations about a what if, because you can't undo those 15 years. And I'm not giving any judgment on whether it's right or wrong for a parent to stay home with a child. That's not my job. My job is to explain the risks that you're putting yourself in if you get divorced 15 years from now.

Matt Feret:

So, if I'm a parent and I've got grandkids and I've got a daughter that says, yeah, I think I'm going to stop. I've got a degree or two, but I'm going to stop and stay home and take care of the kids for 15 years, you're suggesting perhaps that a conversation be had of one, you keep your toe in the water. Why don't you do some part-time work.

Seth Nelson:

I think the conversation is, I support your decision. Just be fully informed. Here's what that might look like in 15 years if you get divorced. Do you want to put yourself in that potential situation? And the answer might be absolutely yes. It's that important for me to stay home with the children. I don't care about that 15 years from now. So, I think just having the information, I'm not making any judgment on even keeping your toe in the water. That's a personal decision. That's a client decision. I just think it's a conversation you might want to have.

Matt Feret:

It's good advice. I've not heard that, but but I'm going to file that one away. Thank you.

Seth Nelson:

The childcare is so expensive. Maybe you say, look, I get it. What you're earning now barely covers childcare or it only leaves you another thousand or $2,000 a month after you pay for childcare. But that's a short-term analysis from a financial perspective. So, maybe you help out as a grandparent with the childcare so they can continue to earn and grow over time and not just stunt that financial growth in the future.

Matt Feret:

Let's talk about kids and the impact on kids. Again, I know there's an emotional piece, but let's talk about kids, they are out of high school, out of college. You're either helping pay for college or not loans. What's different about the divorce process and the divorce decision making and the splitting of and the alimony piece? I guess when kids are out of the house, they're 18, they've graduated high school, they're out.

Seth Nelson:

At no point should a child, whether it's a minor child or adult child, be part of their parents' divorce. The problem is when they're older, they know what's going on. They have a voice, they can use it. They can pick sides, they can make judgements. Dad shouldn't have had that affair. Mom should have not done X. So, what my strong suggestion is you have a united front between the divorcing couple and their adult children. Moms and dads never get divorced. Husbands and wives get divorced. Wives and wives get divorced. Husbands and husbands get divorced. So as a married couple, as a husband and wife, we're deciding we want to live under separate roofs. This is not going to change how we parent you. Even if you're an adult, this is not going to change how we are around the grandchildren. We are not going to be that couple that at wonderful events, whether it's Thanksgiving or family trips or Bar Mitzvahs or communions or weddings or celebrating the birth of a child, where that spotlight is going to come to a side show called us. It should be on you. And we are not going to be that sideshow, and we've made commitments to you, whether it's to help with postgraduate school or to help put money down on a house or whatever. And we are going to have a united front. We might not have as much now because we're going to have two separate households, but we're going to try to keep those commitments to the best we can. Or we're even going to say we're going to keep those commitments and we're going to live lower than our standard of living because we want to keep that commitment. That is more important than what size house I live in.

Matt Feret:

Seth. What happens to wills and trusts when couples divorce and their kids? And I'm thinking specifically not only if I have life insurance, what happens to it afterwards. I mean, I can think of, right, if my first beneficiary was my wife and now, we're divorced, I've got to either change it or it'll pop down to the two or three kids or the kids that I have. But what happens if you've got a trust that has the family trust and then let's say you've got a million dollars of life insurance, you die. It goes into the trust at age 25, this happens, but the wife is still on the trust, or the other spouse is on the trust. What do you have to do and think about if you've got that scenario as a married couple and then you divorce?

Seth Nelson:

So, part of the divorce process would be looking at what you have, including what's in trust. So, if you have a family trust, if you have a pour over trust where the life insurance goes in to the trust, there's all different mechanisms. The big issue is whether it's a revocable or irrevocable trust. If it's irrevocable, you can't change it. That's a problem. But hopefully when you're creating that irrevocable trust, it wasn't going from spouse to spouse, it's already funded. It's going to the kids or the grandkids. So that would maintain the same. Let's just have a quick refresher on trust. Trust is a bucket. There is the person who creates it and funds it the grantor. So, they put the money in. Then there's the trustee. The trustee is the only one that can put their hand in there to get money out. That's it. And they can only spend it on the next group, the beneficiaries. So, if it's an irrevocable trust, you can't change it. It's already created. It already has the trustee, the trustee can change, but the beneficiaries are going to be there. And that's that. If it's a revocable trust, which means you can change it, well, that's easy to do in divorce. You get with your estate and trust lawyers, and you go change it and you say, look, I have an alimony obligation to my former spouse, so I'm going to maintain a life insurance to cover my alimony obligation. So, if I pass, then my former spouse will get that money. And let's just say it was $500,000, but you have a life insurance of 1.5 million. She gets the 500 off the top, the million goes to your beneficiaries, and that can all be handled through a trust. So, look, depending on your net worth and how taxes work, and depending how gray you are in a gray divorce, there are scenarios where it is financially devastating due to estate taxes to get divorced. Because if you have enough funds and you get divorced, you don't get the automatic, well, my wife gets everything and then when she dies, it gets taxed and goes to the kids. I get taxed over here when I die, and she gets taxed over here when she dies. If you've got extreme wealth and you're in that tax bracket, you need to really talk to an estate and trust lawyer and make sure you're setting up your trust properly and decide whether or not it is really worth financially getting divorced. You can go live your separate lives, you can go do what you want, you just can't remarry. You can file separate marry tax returns, you can file joint tax returns, you can work all that out. And the way you work that out legally is in a postnuptial agreement talk. Your eyes just went like, what are you talking about?

Matt Feret:

Yeah, no. So, I mean, I've heard of that, right? You've got two couples that just never got officially divorced, but one's living in Atlanta and the other one's living in LA and for whatever reason, they're living their separate lives. They're both okay with it, but they're still technically married. I guess it's up to the individual. But is that a decent scenario? If I guess a couple can work that out?

Seth Nelson:

Yeah, that's a personal choice. I would recommend that you get a postnuptial agreement to say, here's what we're doing. Here's the income that we have, or here's the assets that we have. Here's how it's going to be split upon if someone actually files for divorce at this point, or this is what we're doing that we're putting money in trust for the kids or the grandkids. But a lot of divorces happen because of lack of communication. And one of the big things people don't communicate well about is money. So, in fact, I got a call this morning from a young woman who's lovely and her fiancé are about to get married, and she goes, my dad said I could call you for marriage advice.

Matt Feret:

Not a bad idea. You might get a little different story than you expect.

Seth Nelson:

In all these premarital courses that they're taking, she's saying the advice they're giving is don't go to bed mad. She's like, what does that mean? And I'm like, first off, you always feel good when someone wants your opinion. But I told her, yeah, can you communicate about money? I talked to her about leaving the workforce that we talked about. I talked to her about is this the person that is going to stand by you and support you when you are struggling because your parents are dying? That's what you're signing up for. If you're talking about being married forever, they're going to be by your side when you are struggling and suffering through these difficult life challenges. So that's what I think young people and people getting married should be talking about as opposed to don't ever go to bed mad.

Matt Feret:

Good advice. In the gray divorce area, do you see as compared to, let's say, I'm going to pick the number, I guess age 50, right? 50 plus whatever that is. Do you see nicer divorces over 50? This has run this course as compared to say, people in their twenties and thirties, or can it be even more just absolutely angry and devastating and horrible?

Seth Nelson:

The reason why I would classify it as nicer, if I had to put that word on it, is because there's less issues to fight about. We're not sitting here attacking each other on whether you're a good parent or not. We don't have that issue. We're not arguing over what child support number is going to be because we don't have that issue. And if you're both retired, it gets even easier because we're probably not arguing about alimony. We're going to divide the assets and live off of our retirement. So, a friend of mine asked me once, would you rather have a hundred million dollars divorce case or a hundred million dollars divorce cases, and being the typical lawyer, I said it depends. And he goes, why wouldn't you want a hundred million dollars divorce case? I said, look, I'm here to help people, but if you're asking if I'm trying to make more money, if I have a hundred million dollars divorce case, it's a retired couple who is 65 years old and the hundred million dollars is liquid in a bank, this case is easy. They each get half, we're done. Okay, so that's why it's a nicer divorce because there's just less to argue about. But no, there could be a lot of hurt feelings, and it can be tough.

Matt Feret:

Yeah, grandkids. Let's talk about that. And then I want to get into one more thing for sure that I keep, I got to figure out when to ask it. I'm going to ask it right at the end here.

Seth Nelson:

The only thing I know about grandparents that I can say, with absolute and certainty, is they love their grandchildren more than their kids. They might not say it out loud, but they say it to each other, to their friends. That is their pride and joy. And then they get to give them back, look, your kids weren't the fault of your divorce. Certainly, your grandkids weren't the fault of your divorce. Don't bring them into it. Don't ruin their birthday parties by having the sideshow, be respectful. Don't bring a new boyfriend or girlfriend to family events. There's just really no need for that. And if you say, well, I want them to meet who I'm with now, it's very important to me. Well, that's about you. It's not about your grandkid's third birthday party. It's not about your kids' wedding. So be strong enough in your personality, in your ego and check it to the side and say, I am here for them. They're not here for me. And I am going to show up on my own and be there and be delighted that I get quality time with them and I don't want to distraction for them or for me of a third party.

Matt Feret:

Good advice. When someone goes through a divorce over age 51, and you said at the beginning of the show, right? A lot of men get married pretty quickly and some women never do again. In terms of alimony and payment. And is that a renegotiation? I mean, let's say I get divorced. My wife never remarries, and I marry someone who is, I'll just use a lawyer again. She's a wonderful lawyer that makes a boatload of money.

Seth Nelson:

Her income is of no matter, your marriage does not matter. So you can get married and divorced as many times as you want. You're going to keep paying alimony. If your former spouse gets remarried in Florida, check your local jurisdiction, alimony ends. Boom. Done. And that's very archaic because the old idea was, well, you needed financial support, right? Now you've married someone else to financially support you, right? That's back to the MRS degree. So that's really how that works. And the other thing to be aware of is you really need to work on your relationships every day with your spouse because if you have a friend going through divorce, divorce happens in clusters. It's higher likelihood that some of your other friends are going to get divorced in that friend group.

Matt Feret:

Talk about that a little bit more from your standpoint, because that really hit home. I mean, I'll just say it. There are people in our circles in our age, 10 years plus that are, it seems like everybody's having problems right now. They're going through it. I've read articles online, they're like, well, it's post-COVID. Everybody thought that we were going to have a baby boom. It ended up being a divorce boom. Is it the age? Is it that cluster effect that you're talking about? Or is it people were stuck in the house for two years and figured out we really didn't like each other, or all of the above?

Seth Nelson:

I think it's all of the above. And I mean the joke about COVID, right? You became a hunk, a chunk, a monk. So, what I know, and I've read the studies, I do this stuff all the time, and I think about all the time I read studies all the time is divorce actually happens in clusters. So be careful, Matt, if you've got some people in your friend group going through it, I would double down on communication with my wife. I would make sure we're good and we're going to stay solid. And it's just a natural tendency where someone sees something like, well, that was awful, that what they went through. But man, look at them now a year later, they're so much happier. They're so much more content in their life. They're living their best life, their color’s back, they're the person they lost during the marriage. And this is another thing that happens a lot in gray divorce, which I'm glad we're mentioning this because it's thought I had earlier, and I should have mentioned earlier. So, I'm sorry. People lose their identity, they lose their individual identity, and they wake up and they're in their fifties and they're like, what happened to that 25-year-old that I was with my hopes and dreams and aspirations? And they want to get back to that. So, as you're married, you need to keep your individual identity and then come together with your spouse on things that are important to you. But if you are now only defined as a couple and you don't know what part of you is you anymore, when you're looking at how many more years do I have left to walk this earth? Maybe you want to go back and find that 25-year-old self and live out some of those hopes and dreams that you never got been able to.

Matt Feret:

And if you're in a marriage and you're thinking that, maybe it's a good time to take a couple of guys trips or a couple girls trips, absolutely create some outside the relationship identity.

Seth Nelson:

And I would agree with that a hundred percent. Or just go read that book or get some exercise. There's a lot of ways to find who you are on a daily basis, but also make time for those friends. And if you are looking to your spouse to be your hundred-percent rock and support, you're looking at the wrong person because that doesn't happen. You don't share every last thing with your spouse. Sometimes you need a buddy to bond with over the game. Your wife doesn't like football. Why are you going to drag her into watch football when she hates it? Go watch it with your buddies. Have a good time. And I'm being very simplistic about it. But that's true. And the support that you might need when you're dealing with a business issue might be another business owner. And maybe your wife doesn't really know or doesn't really care. That's not her swing zone. And maybe it is. There are people that have businesses together. My wife never asks me about how work is going financially or what business decisions I’m making. She'll ask about my day and if I want to talk to her about it. But for the most part, we're talking about other stuff. When she wants to talk about the kids, we talk about that. When she wants to talk about her friends or something that they're going through. I might not be the best support for that. I'm like, I can't believe you. Women argue about that. I say it jokingly because otherwise I get in real trouble. But you got to look to others for support in different ways. It's not always going to be your spouse.

Matt Feret:

And I think it's probably really easy for married couples with children to turn their focus on the children and only talk about the children and family activities and what we're doing. And along the way, lose that one-on-one connection, spouse and spouse.

Seth Nelson:

Matt, I'll share this with you. And we've talked about this on The Toaster, at my house we have something called coffee service. Almost every morning I bring my wife a cup of coffee that I make, and I get up early and I'm off to work early, she likes to sleep in a little later, but she's made the commitment to get up a little earlier, lie in bed, or come out to the couch, have a cup of coffee, and we talk for five or 10 minutes. Sometimes that's the only time we get together all day. And so, we just really value it. Now, if I got an early morning trial or something like that, so it might not happen every day, but that's how we connect almost every single day.

Matt Feret:

Take the time. The old advice of date night, once a week, once a month. Just keep doing it.

Seth Nelson:

Go for a walk, get out there in the fresh air for 10 minutes, 15 minutes, hold hands.

Matt Feret:

Yeah, it can be little stuff. Just it's got to be meaningful, and it's got to be constant.

Seth Nelson:

Exactly.

Finding a Divorce Lawyer with Seth Nelson [56:33]

Matt Feret (00:56:33):

So, the question that popped into my mind, which that I wanted to ask, obviously I wanted to ask all these questions, but I drive around a little bit, throw on some sports talk. Listen how bad the Chicago teams are these days. There's always a commercial, right? Because it's all geared towards guys. All the commercials that some dad’s rights lawyers are out there, and you mentioned one of the pieces of divorce is still antiquated, and they're barking at guys going, if you're getting divorced, make sure you've got a dad friendly or guy friendly lawyer. If not, the system's going to screw you. Is that true or is that a marketing thing? I mean, what's the angle there? Is that simply a marketing thing or is that really true? And you have to guard against that for some reason.

Seth Nelson:

A hundred percent marketing. And what I don't understand about that marketing, look, it might work for them. They're smarter than me on marketing, I guess you've immediately cut out half of your potential clients.

Matt Feret:

That's kind of what I thought too. I was like, wait, you just cut your potential customers in half.

Seth Nelson:

And maybe even more. Because if you have a male couple, which one's calling, how can it be more favorable to one or the other? And if you have a female couple, I guess you're not representing either one of them. So, I think it's a hundred percent marketing. I've gone up against some firms that do that, and it makes no sense to me.

Matt Feret:

And where the rubber meets the road, it's the same approach.

Seth Nelson:

And your approach, I think a very good lawyer gathers a lot of information and tries to solve problems. And if you can't solve the problem between your client and the other client, through counsel or however you're doing it, there's a court system. There's a judge that will make the decision. It's the absolute worst way to solve a problem is to give it to a governmental employee. But people do it all the time. They're called judges, they're overloaded with work. They don't have enough support staff. The trial is just testimony that is just constantly being objected to. There's no flow to it. The judge could be a great judge having a bad day. So good lawyers work out problems. And when you're just marketing to one side and you only see one side of the issue every single time, I don't think that's the best way to solve disputes.

Matt Feret:

So good lawyers, how do I identify a good lawyer? I mean, it's not like I've got a divorced lawyer in my cell phone pocket. If I do, I'm kind of already down a road. How do you do it?

Seth Nelson:

So how do you find a good lawyer? So one, create a list of questions that you want answered at the initial consultation. Two, the lawyer should be doing more of the talking on the initial consultation than you. Because if you're just telling your story, that gives you no information about how your lawyer's going to handle your case, how you and your lawyer can communicate with each other, how they run their office in a way that's hopefully efficient to save you time and money gives you no information on whether you feel that they understand and can communicate to you the process of divorce and the substantive law of divorce, some of which we talked about today. So, create your list of questions. Call the lawyers and interview more than one lawyer and ask the lawyer, do they have anyone else that they would recommend? If they're not going to give you some names, I would not use that lawyer. People call me. I'll ask, are you talking to any of the lawyers? If they say no, I say, and this is true for all clients, the attorney-client privilege is very important to me, or privilege in relationship is very important to me. Do you want the names of other lawyers if I'm not the right fit for you? This is going to be one of the hardest time in your life. You should talk to some people. Now, if they are talking to people, I will tell them for every name you tell me. If I tell you I don't think they're a good fit for you, or they're not the best lawyer, I'm asking you to keep it confidential. But for every name I tell you that to kind of scratch off your list, I will give you another name to go talk to. I'm not trying to say bad, bad, bad. Oh look, I'm the only one left in this scenario because if they need your case, you probably don't want them. And actually, on How to Split a Toaster, we had a whole podcast about how to pick a lawyer, but those are kind of the highlights of that. And yes, Google reviews are great, but you really need to talk to them. And if they're telling you everything you want to hear, something's wrong. Something's wrong. If they're saying, yeah, we're going to win, we should file, let's do it. If you're feeling pressure from that lawyer, I talked to a potential client yesterday, she goes, I feel a lot of pressure. I said, let me back up. I am not pressuring you to hire me. I'm not pressuring you to file for divorce. You called me. I didn't call you. And I said, I'm going to be here tomorrow. I'll be here in November and December. I'll be here in June of next year. This is what I do. Do you want some names of some of the lawyers? She's like, no, that's too much. I feel better already. And there were reasons why I was explaining it's probably better financially to file sooner than later. So maybe that brought across that pressure feeling, but when she could articulate it and then you back up. So those are some of the things that I would do, and I would also make a list of what's really important to you and why and see how they respond to that.

Matt Feret:

Thank you. What are normal fees? What should I expect?

Seth Nelson:

They're all over the board. So, kind of back to the alimony question, how much and how long? That's what people ask about the divorce process, how much and how long? In our practice in Florida where I mainly practice in Hillsborough County and the surrounding counties, I do stuff all over the state. But six to 18 months is the average. Six months. If all people are given the documents, we're not arguing, we're reaching a settlement, boom, we're getting it done. Eighteen months, two years. If we're going to a trial, the more arguing, the higher the fees.

Matt Feret:

Is it a percentage or flat rate? Hourly?

Seth Nelson:

It is hourly. So, my rate is $500 an hour. We have lawyers that are 425, 375, 250 based on their years of experience. Then we have paralegals we charge for, we have legal assistance we charge for, and these are questions you should be asking your potential lawyer, because in this office, whoever's available to do the work that's qualified at the lowest hourly rate does the work. So, in Florida, you have to take a parenting class, you get a little certificate, we have to file the certificate in the court file. I don't look at that. That's not what you're hiring me at. 500 bucks an hour to do. Paralegal's going to prepare the notice of filing. You have to have a lawyer sign it. The lawyer that's a first-year associate at two 50 an hour is going to sign that, right? So, you got to talk to them about what your support staff, how much work do they do, what's the most efficient way? But when people say how much, I've had cases, and we do refundable retainers, other lawyers do non-refundable. I've had cases done for 2,500 bucks. It's rare. It's rare, but we've had it, and I've had cases not just in attorney's fees, but in litigation costs hundreds of thousands of dollars, if not a million.

Matt Feret:

Let's not be those people.

Seth Nelson:

You can pay for your kids' college, or you can pay for my kids' college. Pay for your kids' college.

Gray Divorce Final Thoughts with Matt Feret and Seth Nelson [01:06:16]

Matt Feret:

Great advice. And on that, let me ask this final question. I mean, we've been talking for an hour, but it's been really, really interesting. I learned a lot. Hopefully I never have to use it or anybody else listening or watching. It doesn't have to use it, but it's good to know. Thanks for sharing your expertise. What questions about gray divorce did I not ask that I should have?

Seth Nelson:

We've covered it all. The only one last piece of advice I would tell people, it's very easy for me to say and hard to do. Live your life, not your divorce. If you're going through it, you're not going to get that moment back when you could have spent quality time with your family, but you were thinking about your divorce. When you're out with your friends, enjoying coffee or drinks or dinner, and enjoy the moments with them. Don't talk to them about all this. Get a mental health professional and talk to them. You start talking to everyone about your divorce. You're just increasing the witness list. What did she say? What did he say? Don't bring him into it. Enjoy your time with the people that you love, and you cherish and your friends when it's time to deal with the divorce. Take a few moments out of your day, get your documents together when it's time to talk to a lawyer, prepare and go live your life, not your divorce.

Matt Feret:

Seth, thanks very much.

Seth Nelson:

Thanks for having me. I really enjoyed it, Matt.

Matt Feret:

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