Tune up your finances
Spotlight: Adryenn Ashley
By the time you reach a certain age, learning financial lessons the hard way gets really old, not to mention expensive.
Most people are more than ready to stop wasting money and start doing things the right way around the time that they’d like to get married and start a family.
For women considering marrying a previously divorced man, reading Adryenn Ashley’s book, “Every Single Girl’s Guide to Her Future Husband’s Last Divorce,” may help them avert some pricey missteps that come with the territory.
Ashley is a certified divorce financial analyst and forensic accountant. These roles have given her a unique perspective on the process of getting married and divorced. Bankrate caught up with her to find out how couples, previously divorced or not, should deal with finances in their romantic partnerships.
Hometown: Mill Valley, Calif.
Education: B.A. in Psychology, M.A. in Film Production/Finance, Ph.D. in Jurisprudence (Constitutional Scholar)
- Author of “Every Single Girl’s Guide to Her Future Husband’s Last Divorce.”
- Certified divorce financial analyst
- Asset protection specialist
- Forensic accountant
What kind of view has your experience as a certified divorce financial specialist and forensic accountant given you on romance and finances?
I used to be a die-hard romantic. And now that I’ve interviewed more than 1,000 families for my first book, my perspective has changed.
Love can overcome many things, but when you have some core differences in the way that you view money and some other things that are very critical to marriage, you’re going to have a very hard time making it to a 50-year wedding anniversary.
I think that people would be better served if they knew themselves and what they were looking for long-term.
It’s sort of a business arrangement, not just romance.
That’s one of the ways that I try to put it into perspective is that in business, you create a business partnership agreement when you’re going to go into something long-term with somebody.
You lay out all the parameters of how you’re going to work together and what you’re going to do together and what you’re going to create. And then there is a part in there that says, if we get off track, here’s what we’re going to do to get back on track.
And then there is a teeny, tiny part in there that says, this is how we’re going to break up. And that is how I view a prenuptial — I call it a premarital agreement.
It is all about what you’re going to do as a couple.
Should prenups be a prerequisite for a marriage only if there’s a big imbalance in the parties’ assets?
Prenups should be required for everyone, and I don’t mean the lawyer-involved “I-get-this-you-get-this-this-is-my-stuff-don’t-touch-my-baseball-card-collection” kind.
I don’t mean that kind of prenup.
I think a marital partnership agreement should be what people have before they get married. Whether or not they sign the document or don’t sign the document, they do the work and do the exercise in creativity and communication and that gives them the benefit.
What research has already shown is that going to a four-hour premarital class lowers your divorce rate from 50 percent to 20 percent.
If the courts and the government really wanted to reduce the divorce rate, they would make premarital contracts required to get a license to get married, and they would see the divorce rate just plummet. And they’re not doing that because it’s a huge industry.
It would be putting a lot of people out of work.
Tune up your finances
How do you go about looking for assets if the parties are not 100 percent honest about what they own? Do you look at public records? What tools do you use?
Tax returns are the best place to start, and I’ll give you an example of a fun little trick.
If somebody earned $1,100 in interest off their savings account at the bank, they’ve had a lot of money in that bank account. So when they show that they have no money and they make $2,000 a month when previously they were making, oh, $300,000 a year, and writing off another $750,000 in personal expenses from their corporation …
When you look at this little line item and it shows $1,100 in interest, where did that money go? They took it out and did something with it.
Another little place — you have to own a certain amount of a company to take a loss, and if they have not declared that they own the business, there is one teeny, tiny box where their accountant will write it off. They will either do a depreciation or a loss.
Most people who don’t understand tax returns, they’re not going to notice that their accountant has done that. But it’s a nifty little spot to look for.
There are some really cool databases that you have to be a private investigator or a police officer to access, so it would really behoove you to spend a hundred bucks to hire a private investigator to log in and put in the name and Social (Security number) in there and see what comes up.
On one guy who claimed to be poor, I found a multimillion dollar home in Florida, a multimillion dollar home in Hawaii and a private jet — in four minutes.
That is the secret database. It costs $4,000 a year and you have to be police or a licensed private investigator to have access.
Trust me, the wife was happy.
Without hiring someone like you, a forensic accountant or a private investigator for that matter, how could women — or men — make sure that their future husband — or wife — is being honest with them about finances?
Communication. Laying yourself bare in front of them and then they do the same in front of you.
If you suspect that they are not being honest with you, why are you marrying them?
That would be something to really think about. If you have those kinds of reservations prior to saying, “I do,” you should not be marrying that person.
So what I would do is start the conversation by saying that ID theft is a big thing and I would like to pull our credit reports. Discuss them with each other and see where we’re at and create a plan to get where we want to go.
It just leads to conversation and that will lead to good things. You need to have an understanding about your money values and your beliefs about money.
A lot of times people go into a marriage not knowing that their partner has terrible credit. Should this be a deal breaker when it comes to marriage or can partners work through that?
It depends on the nature of the bad credit. If you are talking about a serial defaulter who cannot handle credit, who buys something and it gets repossessed, flakes on a credit card, you have to look at the behavior. That is what you’re marrying.
A lot of people, when they get divorced, their credit goes in the toilet. I’ve helped many people repair their credit from that. It’s not difficult.
Tune up your finances
Really, if it’s just that they have bad credit but they are a good person, or there was a circumstance like a divorce or medical bills — a single event or a series of events that will not happen again the future. How do they feel about it? Do they regret having bad credit or do they feel like, so what?
If it’s so what — that means you’re going to have bad credit.
And never commingle, that is a biggie.
Keep your money separate. You don’t know what can happen day-to-day. We live in such a litigious society. Someone could come after one of you and take down both of you for such silly things.
When a couple gets married, what should they do to prepare their finances?
Have a plan. Have a man and a plan. That’s what I tell women: You need both. Where do you want to go financially and how are you going to get there?
You really need a plan that includes a heck of a lot of logic and that you will actually do.
It’s not enough to have a plan and say, “Here are the numbers,” if you know you’re not going to be able to execute it.
Decide: Are we going to put money away for retirement in 401(k)s, put money into a self-directed Roth IRA and then start investing it in other ways to grow it faster or start a business?
What are you going to do and how are you going to do it?
Most people spend more time planning their wedding than they do planning their marriage and it should be the other way around.
What kind of financial situations can trip up divorcing couples?
There are certain things that couples do that leave them in a lurch or maybe they don’t know that they owe taxes. The fun part is when you get divorced and your tax return from three years ago gets audited and you find out you owe money or you have to fight it together.
One thing you can do — it’s a loophole, but I like it — you ask the IRS to audit your return. They only have 18 months from the date that you request it and then they can never go back.
So if you ask them to look at it and they don’t — or they do and they say OK — they can’t go back later and say, “No, we found something.”
It’s like getting a clean pass, or drawing a line in the sand — boom, done.
That is something that people can think about doing.
And if you are divorcing, there is no reason to wait until the final divorce decree to start dividing the assets. You can do that on your own. You can use interspousal transfer deeds, moving things around and switching them out and make it as painless as possible.
I find that most couples don’t do that. They wait until the last minute and let emotions get in the way and do things to spite the other person.
Here’s the thing for divorcing couples: Family court is not a court of law. Actual law and logic does not necessarily apply.
There is way more going on under the surface that you do not or will not ever know about that impacts your rulings and your case. The only way to keep that out of the mix is to stay out of court.
So that means doing your own marital settlement agreement and then you agree on everything and hand it to the court and say, “We agree on this. You better sign it.”