The Hidden Cost of Waiting for Divorce: Part 1

David Bulitt: [00:00:00] Welcome to JGL Law for You. JGL Law for You is a podcast by lawyers, but not for lawyers only. On JGL Law for You, we will be discussing a wide array of topics to help you navigate the many legal processes, developments in the law, other current events, and how they may affect you, your family, or your business.

We are back at JGL Law for You, and once again, I have my friend, my law partner, Chris Castelli, talking about family law. And today, uh, Chris, who has been representing clients for over a decade, he’s a partner of mine at Joseph Greenwald & Laake, focuses his practice on all aspects of family law. And today, we’re starting at the beginning, which is a good jump-off point for anyone who is thinking about, possibly thinking about, maybe thinking about separation and divorce.

Chris, we’re here today to talk about the hidden costs of delaying a divorce. Welcome aboard.

Chris Castellano: Thanks as always, David. Yeah, this is such [00:01:00] a, an important topic because it’s a big step, right? The decision to go forward with a divorce. And so a lot of people facing that big step, they think like, “Oh, you know what?

Maybe I hold off. Maybe I see if things get better. Maybe, maybe, maybe, maybe,” right? But there is, as you introduced here and as you implied, there’s costs to delaying that divorce process and putting off that question. Those costs can either be obvious or they can be hidden, and that’s what we’re gonna discuss today.

David Bulitt: And when you, you, you talk about costs, we’re talking not only financial costs, but emotional costs as well, I assume.

Chris Castellano: Oh, absolutely. Divorce is all-inclusive, right? It’s all-inclusive to your bank account, and it’s all-inclusive to your mental account, right? Uh, and I’ll use that freely here because it really takes a toll on the person and the person’s family, and that’s kind of what we’re trying to get at here with starting this process [00:02:00] and what that true toll can be, especially if you delay that process.

David Bulitt: And most people, uh, whether you’re talking about divorce or just about anything else, there’s a fear of the unknown, right? And there’s a fear of change. There’s anxiety related to both of those. But on top of that, in addition to those g- sort of generic layers, why is it do you think that folks generally delay looking into divorce even though they think that that’s on the horizon for them?

Chris Castellano: I think you hit the nail on the head. Different people, of course, may have a different thought on this, right? But the fear of the unknown, I believe, personally, is one of the biggest impediments to change and taking action to effectuate that change or even start that ball rolling, right? Not knowing what to expect, not knowing what the end game will be, right?

If you’re the, let’s call it the financially dependent spouse in a relationship, and you’re facing that question of do I go ahead and I start this divorce process, what’s it gonna [00:03:00] look like for me? What is my life gonna look like at the end of the tunnel? Am I gonna have money to support myself? Am I gonna be able to go out to restaurants or bring my kids to ice cream after basketball or whatever it may be, right?

We don’t know, and that fear of that lack of knowing is, I think, one of the biggest impediments. But y- you can couple that with other unknowns. The possibility that, well, maybe I’m overthinking this. Maybe it’s not as bad as I think it is, right? It’s not like the stories I read in the news or celebrities and their divorces and all this flashy stuff.

You know, maybe we can reconcile. Maybe we can get back together. Maybe this is just a bump in the road. Maybe we go to couples counseling, right? And so that lack of knowledge and certainty about, well, maybe this isn’t the end of the road, that’s also an impediment. In other words, maybe we’ll be able to work it out.

It’ll get [00:04:00] better, right? That’s right. Yeah. And then there’s some of these other items that are just as critical, right? You don’t wanna disrupt your kids’ lives. How many times, David, have we heard people say whether it’s, and this is before I ever got in divorce law, but it’s that idea of you stayed for the kids.

I’m gonna delay things because I want my kids to go to college. I wanna start doing things when, when my kids are in college because somehow that’s gonna make a big difference for the kids. Or I wanna be financially independent Right? I wanna get to a place where I don’t need him or her anymore. I don’t need their financial support.

Or what about the fact that you have a group of friends or family members that really you think will look down on you because you start the divorce process? Or maybe, maybe you’re in a community, whether that’s a neighborhood community or a church community or whatever it may be, that looks down on you for initiating a divorce process.

All of these are those social factors that play into, you know, [00:05:00] an individual’s mentality or paradigm when it comes to divorce and initiating that process.

David Bulitt: Yeah, I mean, there’s, the, the fear is so m- so multifaceted, right? You know, I mean, we, you and I both know that the statistics are not favorable to kids who are children of separation and divorce.

I mean, I think, I think it was more than 50% of kids whose parents divorced are more likely to divorce than those whose parents did not divorce. Y- When I got started, which was on the tail, you know, the early part of the baby boomers were coming, were sort of coming around having kids and so forth, there was a lot of talk about what you just said, “We’re gonna stay together for the kids.”

But then when you get to the divorce part, the interesting thing that I found was that the kids always knew. They knew thing- unless they’re really small, unless they’re really young, there was a general sense, right, that Mom and Dad aren’t getting along anyway. And so what are these folks really modeling for their children at home when they’re miserable?

Well, that’s

Chris Castellano: absolutely right, and I think that there has [00:06:00] been, you know, some, some significant progress and change in, obviously, the therapeutic field, right? And, and an appreciation that sticking it out for the kids And exposing the kids to constant discord and discontent and fights or this or that, that’s not gonna accrue to their benefit.

They’re not gonna thrive in that situation. If you’re genuinely working on it, I, uh, we’re not sitting here today to dissuade people from filing for divorce by any stretch, right? But this is about recognizing the forest for the trees, I think.

David Bulitt: So let’s talk about the financial piece, right? You made mention of the fact that some folks saying, you know, “I don’t want to be financially dependent, so I’m gonna, we’re gonna stay together until I can sort of embark on my own and not be dependent on my spouse.”

But the fact of the matter is, is that a family’s finances are not static, right?

Chris Castellano: Oh, yeah. During this process of your decision-making, right, you’re deciding whether or not, [00:07:00] well, I should go forward with this divorce. The family finances, that budget sheet, that’s not staying static, as you say. It’s ever-changing, right?

So expenses continue, right? Tuitions come due, the credit card debt that may be ballooning, right? Because you and I both know that financial pressures is one of the leading causes of divorce, and that being debt, right? The financial debt may continue to balloon. You know, we may be digging more and more into savings.

You know, right now one of the hot topics is all the increased in, you know, everyday expenses, groceries, gas, whatever it may be. That’s digging into everyday people’s savings And that’s gonna cause more and more and more financial pressure on these couples

David Bulitt: You look today at, in particularly younger people and, and you wonder, you know, how are they ever going to do anything other than rent?

And so if you’ve got a family with two parents, and now all of a sudden, and again, things are circular in some ways, but we tend, at [00:08:00] the moment we’re in an economic circumstance where prices are rising exponentially. By the time we finish this episode, gas will be up another dime a gallon, and, uh, right? So people need to keep in mind that while they may want to be in a better financial position, that, that circumstances outside their control, in fact, adversely affect the likelihood that that’s gonna happen, right?

Well,

Chris Castellano: that’s right. And as gas prices go up, and as other things happen, retirement accounts, they change in value. Stock accounts, they change. You know, if you’ve got cryptocurrency, we know how volatile that is, but it does over the course of a long period of time, it tracks as changes, whether that’s up or down, right?

And so we need to recognize that as you’re delaying this process, those accounts, they don’t delay along with you, right? They’re gonna continue on, and so you need to understand the financial impact of that [00:09:00] delay.

David Bulitt: But what about the s- situation where the spouse who is looking into separating wants to, but decides to stay because his or her spouse is in bus- may be in business on their own, and business is terrific.

So I, I, you know, I, I, this is, this is may not be the right time for me. I wanna s- hang in there while business is good, but business may not always be good.

Chris Castellano: Well, that’s right. You know, the business may not be good, and you wanna stick it out, and maybe you wanna see if you could ride those coattails of success, right?

And enjoy some of the benefits of sticking with the spouse. But there’s some downsides that you need to watch out for, right? That spouse who is kind of chugging along and enjoying success with the business, they may suspect that you’re thinking about divorce. And by doing that, the longer you delay this process, the higher the chance that that other spouse who could suspect that something is, is afoot, they’re covering themselves as well.

Maybe they’re [00:10:00] slowly trickling money into another investment account, another brokerage account, and it’s just enough that you don’t really notice, right? And again, we’re not trying to impose some type of, you know, start being suspicious of your spouse, but at the same time, these are real possibilities, right?

That another spouse on the other side has an inkling that something is afoot and they start protecting themselves, right? That’s another one of these hidden costs of delaying divorce, is the possibility that not only could the market continue and you lose out on money, sure, but your spouse could also be secreting money And you don’t get access to that.

So there’s a lot of these costs from a financial perspective.

David Bulitt: Can delaying a process, delaying the looking at divorcing, hiring a lawyer, can that affect one’s ability to get financial records or to sort of figure out what you have, [00:11:00] what you don’t have, where things are, that sort of thing? Oh,

Chris Castellano: absolutely. I mean, the individual who has always been particular about protecting records, that’s a lost art, I should add, right?

How many people still have a filing cabinet in their office at home or their basement or wherever, and they keep their documents? That’s a lost art because everyone knows, “Oh, you know, I’ll just go onto my Bank of America and download the statements.” Well, you gotta remember that there’s only a certain amount of data available for each user in the world, right?

And so these companies online, they’re not gonna keep your data forever. And so they have a end date that you can go back to on your statements, and that continues on. Whether you wanna delay the divorce process or not, those statements become less and less and less and less valuable or available, I’m sorry.

And so if you’ve got questions like, “You know what? I had X amount of dollars before [00:12:00] marriage. Our marriage is six years old, seven years old,” whatever it may be, “But I know I can always get those statements that show how much, you know, I put in or brought into the marriage.” Well, if you delay another year, and it just so happens that that was the year that your bank stops carrying statements, uh, as available to you, and you didn’t do that background preparation to save documents, you risk not having access to those documents, right?

And so that issue that you wanted to solve and prove may become a whole lot more difficult and certainly a whole lot more expensive, because then, you know, you have to go through the process of subpoenas to the banking institutions, and maybe they have to go to their Arizona-based, you know, archives that they all have and, and you gotta cross your fingers to hope that you can actually get the documents, right?

That’s just another one of those hidden risks

David Bulitt: And today, these days, when people use, basically make [00:13:00] payments from, from their phone or from their laptop, whether it’s Venmo, whether it’s Zelle, whether it’s one of the others, Cash App or something like that, they can become more and more difficult to track down the more time that goes by, right?

Oh, absolutely. I mean,

Chris Castellano: the age of information and convenience is leading to a whole lot less information, and it’s something to be aware of. I’m sure that you’ve experienced it in your practice. I’ve experienced it in mine. The rise in Venmo, Zelle, Cash App, whatever it may be, is making tracking money incredibly difficult.

And so the longer you let that go, the more difficult it’s gonna be.

David Bulitt: So let’s shift for a minute. We, we mentioned it just a moment ago, the housing market, and the house is an issue. The marital home, the family home is always an issue, both from an emotional perspective as well as a financial one, right?

And when you layer into that what we’re experiencing today, which is a instability in the market, the interest rates are higher than they were, substantially higher than they were, you know, [00:14:00] three, four years ago. Tell me a little bit about how all of that affects someone thinking about delaying, waiting, not going forward now with the process.

Chris Castellano: Yeah. So let’s do that in two parts, I think, right? Let, let’s have a hypothetical of somebody who was looking into getting a divorce when the interest rates were lower, right? L- let’s say 2021, 2022 time period. Rates were much better. House prices were starting to certainly climb, but they weren’t as drastic as they are right now.

And they say, “Ah, you know what? All these other non-financial factors, I wanna stay with the… stay together for the kids. Maybe we can reconcile,” all that. You keep all that in mind, and then they decide to stick it out, right? Things don’t change And so you say, “Well, I’ve gotta make a change now,” right? Well, you look into refinancing that same house today, and what would’ve been, whether it’s an [00:15:00] assumption or a refinance to maybe a 20, from a 2,400 a month mortgage to a 2,600 a month mortgage, the exact same mortgage ma- principle with a higher rate stands to be around, you know, 4,700, 4,800.

And, oh, let’s not forget some of the important aspects of that payment, right? And that’s homeowner’s insurance. And a lot of people, we don’t acknowledge this enough, but the longer your house goes, the more difficult it is to get a homeowner’s insurance policy. And there’s a lot of homeowner’s insurance policies that aren’t covering houses that have a roof, for instance, that’s older than 10 years.

And so if you go from that eight years to 11 years and you think, “I’m gonna get this house and I’m gonna have a new homeowner’s insurance policy,” and then they say, “Well, you know, guess what? Buy a new roof and then we’ll start to cover you.” And that roof’s $30,000. That’s a hard cost on a reality, right?

That a lot of people don’t factor in. [00:16:00]

David Bulitt: And there’s, there’s a multitude of things. Utilities, new HVAC, dishwashers, refrigerators. If you bought a house, you know, a lot of folks, especially in the area that we live in, there’s a lot more resales than there are new, you know, new home purchases because of the lack of places to build houses in the DC market.

So people are buying houses, right, that are 20, 30, 40 years old, still have similar appliances or the same appliances that they may have had in 1984, and not thinking about what’s it gonna cost on top of what I, uh, uh, on top of everything else, what it’s gonna cost to replace all that stuff.

Chris Castellano: Oh, yeah. I, I mean, they’re, they’re taking on what is essentially a mini mortgage with some of the potential maintenance and- Yeah

and upkeep requirements. Yeah, that’s absolutely correct.

David Bulitt: What about the non-financial piece, the emotional tie to, “This is my home. This is the kids’ home. And so if we go to separate, then one of us isn’t gonna be living here. The kids might not be here.” How does that affect the thinking of someone [00:17:00] considering divorce, and how does that affect the advice that you give them?

This is

Chris Castellano: always tough. It’s one thing to approach a potential client or a client on, on the questions from a financial perspective, ’cause that boils down to what we all refer to as a business decision, right? You can put dollars and cents to that, a- and it makes sense, no pun intended. But here, when it comes to the kids, when it comes to the family concepts, when it comes to the memories and all that, those are in the intangibles that you really…

I mean, you may have a lawyer that is gonna attempt to put a dollar value to that, but that’s, frankly, that’s a little disingenuous, right? Because you can’t put a value to someone’s memory or, or the possibility of memories. And so that is where the other side of our job, the counseling side, comes in, right?

You gotta talk to your client and really understand what do they value, and not from a financial perspective, but what do they value? A lot of people, and I’m sure you’ve heard this, they, they value the idea of, you know what? It [00:18:00] matters more to me to not, for instance, go to trial and litigate the case.

From an emotional standpoint, I don’t have it in me or that’s not what I wanna do, or I, I had 20-year relationship with this person, and I don’t wanna put them on the stand and they have to deal with that, right? So there’s these emotional factors that I think is inappropriate at best to ignore, because they’re a reality just as much as the person’s bank account, and you can’t just dwindle the person down to the idea of, of a bank account or an investment account or whatever it may be, because they have these other intangibles that are realities for these

David Bulitt: people.

To wrap up this part of this discussion, folks, we’re gonna have this discussion in two parts. But to wrap up this part, tell everyone a little bit if there is any disadvantage. What, if any, strategic disadvantage might someone have in waiting and saying, “Okay, I’m,” for whatever the reasons are, some of them we’ve talked about, some of them we haven’t, for whatever the reasons are, I’m gonna wait.[00:19:00]

How, if at all, might that disadvantage someone in a divorce circumstance?

Chris Castellano: So there is the emotional disadvantages There is the financial disadvantage, and then there’s the strategic disadvantage, right? We talked about the emotional disadvantage that, you know, you could put yourself in a situation where it continues, and frankly, your life hasn’t gotten easier.

The emotional struggles haven’t gotten easier. They still remain. Your children aren’t gonna benefit potentially because frankly, the exposure to discord isn’t that much better than the potential instability of a new situation and change. Okay, so we talked about that a little bit. From a financial perspective, we talked a little bit about investment accounts could change.

They could either go down or your other spouse could increase, right? And there, there could be a hidden benefit to that, we- which we’ll talk about during our next part of this discussion. But overall, the markets can be volatile, and [00:20:00] so you don’t know what it’s gonna look like. Okay, so we talked about that.

From a strategic standpoint, the other side could have that inkling, right? ‘Cause people have an idea, that intuition. Unless you have your head in the sand, the other side has the intuition of something’s not quite right

David Bulitt: here.

Chris Castellano: We’re not sitting down and sharing wine together and having a good old time, right?

So clearly something’s not quite right, and so they start preparing, and they may be of the mind to not delay. They’re talking with counsel. They’re strategizing. They’re saying, “Hey, you know what? I’m not gonna write emails or communicate to my spouse this way on kid issues.” And so they set themselves up so they don’t have pitfalls or mistakes, right?

They start gathering the documents to prove different items that you neglected to start preparing for or hedging against. They started slowly moving money away, right? There’s all these potential items that the other side could [00:21:00] be doing, but because you delayed even talking to an attorney, right, you delayed that process.

These aren’t on your radar, and these are the risks. These are the red flags that we’re trying to expose for people right now is, is you just have to have the information because you need to hedge against

David Bulitt: these potential issues. So the takeaway, it seems to me, aside from all the details that you’ve talked about today and more that we’re gonna talk about in the second part, the takeaway is if this is something you’re thinking about, don’t ignore it.

Go talk to a lawyer, right?

Chris Castellano: At the very least, yeah. Just have the conversation because the lawyer, you or I can sit down with a person and help them map this situation out, right? Where are these potential red flags? You may not have the tools to recognize some of these, but, you know, we’ve done this for long enough that we can help to identify some of these issues and say, “You know what?

That’s fine. If your goal is reconciliation, I’m not gonna get in the way of that. But [00:22:00] please be sure to keep this, this, this, and that At the forefront of your mind, right? At the very least, someone’s getting educated. That’s right, and there is absolutely no downside to gaining information.

David Bulitt: That’s true in all aspects of life, Chris, and I wanna thank you.

This is the end of part one of the hidden costs of delaying a divorce. Part two is coming next. Chris will be back. As always, folks, thanks for listening. Come back and listen to the rest of this discussion because this is as important as it gets for anyone who’s in a circumstance where they’re considering, worried about, wondering whether divorce is the right thing for them.

Once again, folks, I am David Bullitt, and this is JGL Law for you.