Money Rehab with Nicole Lapin
Catt Sadler and Law Mother: Saving Your Wealth and Health During Divorce
Fri, 28 Feb 2025
This week, Money Rehab is hosted by Pamela Maass Garrett, aka Law Mother, attorney and money expert. Divorce, of course, is a legal process— but it's also an emotional one. Today, Pamela shares seven tips for protecting your wealth during divorce. Then, Pamela is joined by phenomenal journalist and podcaster Catt Sadler for a conversation on protecting your mental health during divorce. Pamela Maass Garrett, aka Law Mother, is an attorney and money expert helping you grow and protect your wealth through her bestselling book Legally Ever After and her upcoming Wealthy Ever After book and app. Subscribe to Catt’s podcast here: https://podcasts.apple.com/us/podcast/catt-sadler-now/id1562073520 Find Pam’s freebies here: https://www.lawmotherco.com/moneyrehab Follow Pam here: https://www.instagram.com/lawmotherco/ If you or someone you know is in an abusive relationship, find resources here or call 1-800-799-SAFE The content in this episode is for entertainment purposes only, please consult an advisor before making any financial or investment decisions. All investing involves the risk of loss, including loss of principal. Brokerage services for US-listed, registered securities, options and bonds in a self-directed account are offered by Open to the Public Investing, member FINRA & SIPC. Public Investing offers a High-Yield Cash Account where funds from this account are automatically deposited into partner banks where they earn interest and are eligible for FDIC insurance; Public Investing is not a bank. Cryptocurrency trading services are offered by Bakkt Crypto Solutions, LLC (NMLS ID 1890144), which is licensed to engage in virtual currency business activity by the NYSDFS. Cryptocurrency is highly speculative, involves a high degree of risk, and has the potential for loss of the entire amount of an investment. Cryptocurrency holdings are not protected by the FDIC or SIPC. Treasury accounts offering 6 months T-Bills are offered by Jiko Securities, Inc.,member FINRA & SIPC. Securities in your account are protected up to $500,000. For details: www.sipc.org. Banking services and the Bank Accounts are provided by Jiko Bank, a division of Mid- Central National Bank. For U.S. Investments in T-bills: Not FDIC Insured; No Bank Guarantee; May Lose Value. Treasuries risk disclosures, see https://jiko.io/docs/treasuries_risk_disclosure.pdf. See public.com/#disclosures-main.
Chapter 1: How do fees affect financial progress?
You have probably heard me call myself the fee police because I hate, hate, hate fees. It makes it really hard to stay on budget, which then can delay our financial progress. When we're trying to make progress, life's curve balls often feel like taking one step forward and two steps back.
A time checking account makes financial progress easier with features like no maintenance fees and fee free overdraft up to 200 bucks or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you go to Chime.com slash MNN, you'll see all the reasons I love Chime. Like, did you hear me say that Chime allows you to overdraft up to $200 with no fees?
Chime also has no monthly fees or maintenance fees. And Chime has over 50,000 fee-free ATMs. So as the fee police myself, I approve. Make progress toward a better financial future with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN as in Money News Network. Chime feels like progress. It's me talking about public again, obviously. Are you surprised?
It is my favorite brokerage after all. By now you know Public is the only place I personally buy bonds. If you haven't heard my spiel, in the olden days, I would buy treasuries through the government website and it would always take forever. And also the branding was horrible. It kind of looked like the Toys R Us website back in the day. But with Public,
it's simple and easy to invest in treasuries right from your phone. There are literally thousands of bonds to choose from on public, not just government bonds, corporate bonds too. You can use public for more than just your bond investments, of course. On public, you can invest in stocks, ETFs, options, crypto, and they even have a high yield cash account where you can earn 4.1% APY on your cash.
And there's an exciting new offering on public that I cannot wait to tell you about. Now you can invest toward your future self through retirement accounts. On public, you can open a traditional IRA or a Roth IRA or both. I mean, why not? If you're looking for a simple yet sophisticated investing experience, head over to public.com slash money rehab.
One more time because trust you will thank me later. Public.com slash money rehab. This is a paid endorsement for public investing. Full disclosures and conditions can be found in the podcast description. I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab.
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Chapter 2: How to protect your wealth during a divorce?
Hi, money rehabbers. It's Pamela Moss Garrett, a.k.a. Law Mother. I'm a lawyer specializing in growing and protecting your wealth. And this week, I'm filling in for Nicole while she's out on maternity leave. In this episode, I'm talking about a seven-letter word that's hard to say out loud, divorce. If you've been through a divorce, you know there's no sugarcoating it.
It's tough emotionally, legally, and yep, financially. And if you haven't been through a divorce, statistically speaking, there's a solid chance you know someone who's going through one right now. I personally went through a divorce in my early 20s before I became a lawyer. And I made a few mistakes now reflecting back on as a lawyer that I wish I would have known.
And I'm going to share those with you in a moment. Today, I'm remarried with two kids, and I feel like the lessons I learned through my divorce have made me an even better person and partner. Today, we're tackling divorce in two parts. First, I'm going to give you strategies around how to protect your money when splitting with your partner.
Next, you're going to hear a conversation between myself and Kat Sadler about protecting your mental health during a divorce. Because in cases of divorce, it's all about protecting your health and wealth. So let's start with the financial side of things.
Divorce is a business deal, meaning when you go through it, it's best to approach it with a rational, calculated mindset, like negotiating a business transaction. Yes, it's also emotional, but the legal process, it's about untangling assets and liabilities. And if you go into it only thinking with your heart, you might get financially wrecked. So let's talk strategy.
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Chapter 3: What are common financial mistakes during divorce?
I'd make yourself a to-do list with these seven things on it. Number one, get your financial house in order yesterday. Before you even say the word divorce, start gathering financial documents. This includes bank statements, tax returns from the last three to five years, retirement accounts, investment portfolios, credit card statements, mortgage documents, and other debts or loans. Why?
Because if things get messy, you don't want to be scrambling for paperwork while emotions are running high. And in some cases, although I really hope this doesn't happen, a spouse might try to hide assets once a divorce is on the table. So you want records of everything before that happens. Separate property is anything you owned before the marriage, inheritance, gifts given to only you.
And in some cases, this is yours to keep. But depending on your state, this can get messy. For example, if you had a real estate prior to the marriage and commingled it, it becomes marital property, which I'll talk about in a moment.
And in many states, if you have assets that increase in value, like real estate, stocks, and a business, this increase in value during the marriage is seen as marital property. For example, if you owned a condo before the marriage worth $200,000 and during the marriage increased in value to $500,000, then that $300,000 increase can be seen as marital property.
Marital property typically gets divided unless it's otherwise stipulated in an agreement like a prenup. How this gets divided is going to be state-specific and can often be related to how long you've been married. If you have a prenup, prenuptial agreement, amazing. That'll clarify a lot. You know Nicole and I are both pro-prenup.
If you don't have a prenup, you'll need to work with a lawyer to untangle who gets what. Number three, protect your credit. If you have joint credit cards, now is the time to get your name off of them or freeze the account. Otherwise, your ex could run up debt and legally you could still be on the hook. Also, check your credit report regularly.
If your ex is making financial moves in your name, you need to know as soon as possible. Number four, be smart about real estate. A lot of people get emotionally attached to keeping the house. But here's the hard truth. If you can't afford the mortgage, taxes, and upkeep solo, keeping the house might be a financial disaster. So run the numbers.
And if you do keep it, refinance the mortgage in your name so your ex isn't still tied to it. If they keep it, same deal. Make sure your name is off the loan. This is one of the mistakes I made during my divorce. In our divorce agreement, my ex-husband was to take over the mortgage and refinance. However, he never did. Unfortunately, this was back in 2008 when the housing market crashed.
So six months later, the house we bought was worth half the price and my name was still on the mortgage. When he stopped paying the mortgage, it wrecked my credit for about seven years. Number five, don't forget retirement accounts. Pensions, 401ks, IRAs, they all get divided too. And depending on how your assets are split, you may need a qualified domestic relations order to get your fair share.
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Chapter 4: How can emotional health be maintained during divorce?
For example, if you want an amicable divorce, yes, those do exist, especially if you have kids. A lawyer that's known for building bridges and being reasonable is more likely to get your case resolved sooner. I've personally seen extremely aggressive attorneys draw out cases longer than they need to be, which ultimately costs you much more money.
Be sure to interview a few lawyers before you'd commit. I'd say the most helpful criteria is to find someone who's handled divorces like yours, so don't be shy in the first meeting. Share the details that might be relevant, like how long you've been married, what your ideal situation is. I mean, really, don't be shy.
And if your divorce is relatively amicable, a mediator could save you a lot of money and legal fees. This was a mistake I made. I hired a very cheap attorney, and because he was so cheap, I felt like he cut corners. For example, he didn't advise me with regard to real estate issues and my ex not taking me off the mortgage. He dropped the ball there and that cost me big.
I really wish I would have spent a little bit more money to get someone who would have helped me cover my bases. Number seven, plan for life after divorce. Divorce is not just about getting through the process. It's about what happens next. Make a new budget, update your will, trust, and other state planning documents.
Adjust your insurance policies and start thinking about rebuilding your financial future. One of the biggest mistakes I see is people forgetting to remove their ex as beneficiaries on their accounts, and they unexpectedly pass away and their ex receives everything. Okay, so that's the money side of things. But as we all know, divorce isn't just financial, it's a full-blown emotional rollercoaster.
So let's hear from someone who's been through it in the public eye. You may have seen Kat Sadler from her work as a reporter on E! News, but now with her podcast, Kat Sadler Now, you really get to know her. Today, I sit down with her to get her advice on how to protect your mental health during a divorce. Here she is.
Kat, you have an amazing podcast, Kat Sadler Now, and you used to open the show with this introduction. I'm going to read it to you. Used to say, after a broadcasting career spanning three decades, raising two kids, and dissolving a few marriages, I've learned a thing or two about life, about love, about becoming the best version of ourselves.
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Chapter 5: What lessons can be learned from Catt Sadler's divorce story?
Today I want to talk to you about how you learn those lessons in the wake of divorce. And I want to start with a story you told on your podcast about a driver who was taking you for the first time, your first time covering the Golden Globes, and he totally changed your perspective on the divorce you were going through. Can you tell that story?
Oh, sure. Wow. It's interesting because I hadn't really thought about that story for many, many years. And it wasn't until a recent Golden Globes that I kind of jogged my memory. It was such a seismic moment in my life. So yes, I'm happy to share the story. I was back in 2007. And I was working for the E channel, E entertainment at the time.
And I was heading off to cover the golden gloves for the first time in my career, which for a girl from Indiana who had dreamt of going to Hollywood and had, you know, engineered this broadcasting career, that was like, the epitome of like the creme de la creme kind of opportunity for me.
What people didn't know at the time was that I was in the middle of a split with my husband, the father of my kids, Kyle, I'm sure we'll refer to him a couple of times. So I'll just give him a name, Kyle, but I was heartbroken, you know, professionally, all these wonderful things were happening in my life and being realized for the first time. But at the same time, my family was, was crumbling.
And what was really going on inside of me was just like, feeling like a failure and feeling just so depleted and exhausted and devastated really with what was unraveling in my personal life and what was happening to my family.
And so I get into this car with my driver because, you know, on the national level, one of the perks is, you know, they send you a car to get you to the big, you know, award show. And I had my sweats on, I had my coffee in my hand, and I was heading off to go do my job.
And as glamorous and exciting and thrilling as that day seemed to be or appeared to be or I had anticipated it to be, I really didn't know if I could pull it off. I was the shell of a person. I felt like I was dying on the inside. And so I get in this car to go to work, and I'm kind of... feeling quite weak. And this man, the driver, and for the life of me, I can't remember his name.
I think it might be Monroe. He just bestowed upon me like this kind of wisdom for the moment I was in that felt really ordained. Actually, it felt really like this divine energetic moment where I felt like he was sent to me in that moment, on that day, during that drive for 45 minutes where he, he kind of reframed my idea about my divorce in a new way. You know, he was asking me questions.
I was a complete stranger. He was a complete stranger. I started telling him my story because it was so raw and it was so of the moment that I just kind of unloaded on this guy. And he was, he was, You know, like now Morgan Freeman is popping in my mind because he like he was like playing God. And then what came out of his mouth was even more beautiful.
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Chapter 6: How to achieve amicable co-parenting?
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And now for some more MONEYREHAB.
As a lawyer, I know that divorce is obviously a legal process, but it's also emotional. Can you talk a little bit about your emotional arc during that time? I know we just kind of started with you going to the Globes, but then you went through the whole divorce. Can you kind of tell us about how that was emotionally?
Mm hmm. Yeah. Well, and to your point, luckily for me, the procedural formalities of divorce, that was the easy part. Like that was really clean. And I know a lot of people who aren't as lucky who, I mean, I hear some stories and I'm sure, you know, some stories that can be really, really, really harrowing for people.
So, so the whole thing was emotional, really, you know, I had mostly, it was my kids, my kids, my kids, I, they were six and two at the time. And again, I I think I had had a rocky experience personally as a child. My parents, my biological mother and father, just, you know, they were angry at each other for years. And so... I just didn't want them to have a similar experience growing up.
I wanted their birthday parties to be fun. I didn't want there to be animosity or bitterness. So at first I had to make that kind of decision. And luckily with Kyle, right away, that was the one thing we agreed on. Listen, we had some things we had to work through and there was some therapy involved and that kind of thing. But the one thing we definitely agreed on was
We're going to do this differently. And eventually we're going to have to figure out our co-parenting situation. We're going to have to figure out how that looks. But no matter what, it's a kid's first approach.
And so even though, of course, the unsettled feeling, those emotions of the uncertainty of your future and what your family is going to look like and worrying about kids and worrying how they're going to adapt to the back and forth and all of these things that play into parenting.
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