12 Days of Giving Day 5: Finding Financial Freedom After Domestic Violence - How One Mother Rebuilt Her Life

What happens when a mother, fleeing domestic violence with her special needs son, has to rebuild her entire financial life from a shelter? In Day 5 of our '12 Days of Giving' series, financial advisor Jamie Lima shares a powerful story of transformation that proves you're never truly alone in your darkest moments.

This episode goes beyond the typical divorce narrative, diving deep into the critical financial strategies that turned crisis into opportunity. Learn how proper pension valuation and understanding QDROs (Qualified Domestic Relations Orders) can make the difference between struggle and stability. Whether you're facing divorce, supporting someone who is, or simply want to understand how financial advocacy works in crisis situations, this episode offers invaluable insights for navigating life's most challenging transitions.

Jamie reveals how building the right support team - from financial advisors to legal counsel - can help you move from survival mode to creating a sustainable future, especially when children with special needs are involved. Discover practical steps for organizing finances during emotional turmoil and learn why having a financial advocate in your corner can dramatically change your divorce outcome.

For more resources and professional support, visit https://allegiantds.com/

As always we ask you to comment, DM, whatever it takes to have a conversation to help you take the next step in your journey, reach out on any platform!

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DISCLOSURE: Awards and rankings by third parties are not indicative of future performance or client investment success. Past performance does not guarantee future results. All investment strategies carry profit/loss potential and cannot eliminate investment risks. Information discussed may not reflect current positions/recommendations. While believed accurate, Black Mammoth does not guarantee information accuracy. This broadcast is not a solicitation for securities transactions or personalized investment advice. Tax/estate planning information is general - consult professionals for specific situations. Full disclosures at www.blackmammoth.com.

Chapters

• 0:00 Introduction to a Heartwarming Client Story
• 4:57 Navigating Divorce: A Client's Journey
• 9:49 Understanding Quadro: The Financial Tool in Divorce
• 14:54 The Importance of Financial Organization
• 20:10 Building Your Support Team During Divorce

Transcript

Stoy Hall, CFP® (00:00.664)
Another exciting episode of 12 days of giving second annual. It's really fun. Glad to have Jamie back on. Hey, I'm not gonna go through his intro everybody you know how this rolls. This is about the client and their story. So if you want that we'll have that in the description below. But welcome back and you know, let's dive right into it. Your topic. It's probably a lot of people more than they think or more than people that they know. And it's really exciting to get into it. So let's let's do this.

Jamie M. Lima (00:27.101)
Yeah, man, let's do it.

Stoy Hall, CFP® (00:28.952)
Alright, so tell us tell us a little background of how the client came to you with clients about and then we can dive into the whole story.

Jamie M. Lima (00:36.626)
Yeah, totally. And again, thanks for having me on, I this is going to be a great conversation. The case that came to mind when you and I were talking about this was, it was an easy one. mean, we've had a lot of cases this year, but this one really stuck out to me, not only from a personal perspective, because I really, really felt bad about the client situation, but I think from where we took, where she was to where she is today is really a heartwarming story, so to speak.

I can't remember exactly how the client came to us, probably through one of our Facebook ads or through our website or whatever. But the story is effectively, this gal was going through a divorce and she has a young son. I want to say he's 16, 17 years old or so. He does have autism, so he needs some additional support. once she decided that she wanted a divorce,

mainly that stemmed from some domestic violence issues that were involved with her case and in her life. And when she called us, she was actually living in a shelter. Okay. So her first step was I need to get out of this situation and get myself and my son to safety, which was amazing. And thankfully she thought that through first. And so she ended up in a shelter. can't remember exactly how long she was there when she came to us, but

she decided to reach out and get some help on the financial side, because she already had it. She already had an attorney who wasn't doing very much work for her on the financials and, and it was spending a lot of time and wasting a lot of money trying to figure out, you know, how to help her calculate alimony correctly, what kind of support she was going to need for her son, because he, he was, he's probably not going to be able to care for himself the way that, you know,

most adults would, you know, after they turn 18 and get into the early twenties, he's going to need ongoing support, right? So child support may end, but he's still going to need some level of support moving forward. The attorney couldn't figure out how to work through that. And so there were some issues there, but she decided to reach out. We talked a little bit about her situation and I actually, I actually cut her a deal on our fee. decided that I was going to do half of the work pro bono for her.

Jamie M. Lima (02:55.008)
So I was like, if you can commit to, think we agreed to a small $1,500 engagement fee or something just to cover a few hours of our time. And then I did the rest for free for her. we did gather a lot of her financial information. We worked through getting an understanding of what she actually owns. There was a house involved. There were some retirement plans. And the biggest one was the husband's pension.

One of the things that a lot of attorneys miss when they're going through the, helping people get through the exercise of divorce and trying to understand the financials is they don't really understand the real value of a pension. Okay. And you and I understand time value of money calculations and discount rates and interest rates and cost of living and actuarial tables and those types of things. Cause we're in this world. Most attorneys and the average person are not. they think, well, if I'm getting $2,000 a month,

you know, from this pension, that's $24,000 a year. Maybe I'll live another 20 years. So I think the pension's worth $240,000. It's not necessarily the case, right? Cause if we have, there's all these other factors that are involved. So when we went through the exercise with her of, really trying to figure out what that real value was of the pension, it was substantially higher than what she was willing. She was planning on settling for based on the advice of the attorney.

So we've, we organize all of our information. We help her sort through all the financial details. We put a real value on the pension for her. And we also helped her sort through things like what is my future, what are my future support going to look like? what kind of child support, what kind of family support am I going to get? What does Alamo going to look like worked or worked through all those things. And that was, that took a period of, I think probably two or three months. It took us to get through this and all along the way, unfortunately we're getting zero help from the attorney.

getting zero L from the attorney because the attorney's like, I don't understand any of this. so we finally got, long story short, she went to settlement. We were able to get her to maximize the pension plan for her. So that was huge. Gave her access to some cash because she was able to take some of that money. was able to separate the pension. She took her portion of it by way of the...

Stoy Hall, CFP® (04:51.682)
Go figure. Go figure,

Stoy Hall, CFP® (04:57.505)
Right.

Jamie M. Lima (05:19.306)
quadro or the court order acceptable for processing. She was able to take a little bit of money out and use that to start funding her new life. So now last night, last I checked, she, she has a, deposit down on a new place for her and her son. And she's going to be able to get herself out of that. You know, that shelter here, here pretty soon. So it's, I can go into more, some more details about some of these other aspects of this too, but that in a nutshell, that's the story. And.

From my perspective, was like, you know, we gave up a lot of free time for her this year, but man, I mean, we put her in a really good spot moving forward, I think.

Stoy Hall, CFP® (05:56.192)
Yeah, that's that's impactful. Like I couldn't imagine going through her and her situation with an attorney. And this isn't knock on attorneys, although it kind of is. They just don't know what they don't know. And so they're going to charge you for that research. And then you have to hope that the research they're doing is coming from someone like us. And it just runs up the bill. But let's let's start from the beginning from a more emotional standpoint. When she was fed up and finally came to you and found you love

social media so I'm glad it worked hopefully. Where was she in her state of mind at that point when she first started?

Jamie M. Lima (06:34.472)
She was pretty down and out. mean, you can imagine the situation she's in, right? She's given what money she does have access to. She's given that to the attorney and she's put a lot, she put a lot of the attorney fees on credit cards and started to rack. I think she even took out a personal loan or one of these like payday advanced loan type of things in order just to get the cash to be able to give to the attorney.

So, and she's living in a shelter, she's dealing with the emotions that come with that. She's got a child that she has to care for who has health issues and needs of his own. And she's trying to work at the same time. So she has a job that she's been employed at for I think probably 20 years or so. And so she has those responsibilities, a lot of spinning plates. And she's trying to find a place that's safe for her to live because of the domestic violence that's involved.

I can't speak for her or what her mental state was, but I'm only guessing that it was, you know, it was rough.

Stoy Hall, CFP® (07:36.568)
Yeah, it had to have been in those listening. Another episode in the 12 days of giving will be with one of my clients who runs a child autism clinic. So we'll dive into that piece of it because I'm not an expert in it. And I know you're not Jamie, but your story in that story will align. for those that are in that situation, we actually will have an episode shortly after this one about that.

Jamie M. Lima (07:39.679)
Yeah.

Jamie M. Lima (07:49.013)
Mm.

Jamie M. Lima (07:52.883)
No.

Stoy Hall, CFP® (08:01.524)
you got into a little bit of the details of like what a quadro is, right. And I think a lot when I've seen a lot of divorces that gets left out often. And usually because the attorney doesn't know the process or one if they don't know what it is to they don't know the exact process of getting funds available. Talk us through what a quadro is and how in this case it was utilized.

Jamie M. Lima (08:20.896)
Mm-hmm.

Jamie M. Lima (08:24.842)
Quadro is the qualified domestic relations order. Okay. And we use this term in general, we use the term quadro, but there's also another document called a court order acceptable for processing, a COAP, C-O-A-P, a court order acceptable for processing. And for those of you that are in the military or federal employees, maybe you work for the post office or whatever, that's the type of document you would need in order to divide up your retirement account.

subsequent to the divorce, right? Most 401k plans, 403b plans, typical private sector 401k plans are divided up by the Quadro, the qualified domestic relations order. And that document is effectively a legal document that says, this is what the parties have agreed to. And based on the length of service, the amount of payments,

that are coming off the plan or the value of the 401k plan, it'll provide all the details of what the agreement is. This person is gonna get this for this length of time, and this person is gonna keep that for this length of time. This is who the beneficiary is gonna be, so on and so forth. And you're right, a lot of attorneys will wait till the very end of the divorce to start talking about this and making it part of the process. The challenge with that is that

Until the document is accepted by the plan sponsor. Let's just use fidelity investments. For example, I worked for a company called fidelity investments for nine years. Very familiar with their process. Familiar. If fidelity will process thousands of these every month for people. When that document is created, it is a domestic relations order. It is not technically qualified until it's accepted and approved by the plan. So you have to take this document, get it all drafted. has to be.

done the right way, sent to the plan sponsor, they have to review it, which could take time, if it sits on somebody's desk for a few weeks. And then if it's not in good order, they'll then send it back to you for corrections. And then you have to go through this exercise again. So if you wait till the very end of the divorce to do all this, it could take you six months before you see that money. And the challenge with that is, like in our client's situation, she needed that money tomorrow.

Jamie M. Lima (10:48.8)
not next year. So you've got to be very careful about how you go about doing it and what that, to make sure all the I's dotted, all the T's are crossed, it's very, very technical. Very, very technical. And we will help, we help all of our clients and shepherd them through that process to make sure it's done the right way.

Stoy Hall, CFP® (11:05.656)
when you talk about access to because usually their retirement plans, right? Although all they are is qualified plans. Ultimately, you usually can't get to that money, right? If me and you aren't 59 and a half, we're not getting to it unless we went tax and withdrawal with the quadro is their ability to get access to one of the divorce spouses earlier than that or not.

Jamie M. Lima (11:13.568)
Okay.

Jamie M. Lima (11:24.872)
You can get access to it, but you're still responsible for the taxes minus the 10 % penalty if you're under the age of 59 and a half. Unfortunately, uncle Sam is going to get his, his fair share, regardless of whether or not you're doing the benefit is that you, if you do it at the time of the divorce, I think most plans allow you a year to take a distribution. Once you have that document in place. you, you, once you take the distribution and a lot of people use it, you know, to, to put that money down on a new house or.

Stoy Hall, CFP® (11:36.652)
always.

Jamie M. Lima (11:54.016)
furnished or new place or whatever it is, you can avoid that 10 % penalty by doing it subsequent to the divorce.

Stoy Hall, CFP® (12:01.524)
If not, you can roll it into your own plan. Use it like normal, like an IRA, and move on.

Jamie M. Lima (12:07.07)
Yeah, yeah. I like doing it subsequent to divorce and doing it directly out of the 401k because you get the benefit of not having that 10 % penalty. If you roll it to your IRA and then take money out later, you can't avoid the penalty at that point.

Stoy Hall, CFP® (12:21.932)
Yeah, absolutely. So obviously, distraught unorganized going through a divorce doesn't have maybe the best attorney who can organize the financials. What does that process look like in organization? I know we hit upon this on episode we had with you before but

The organization of the financial documents. What do you see happen most often when someone comes to you with this situation or any situation? Like when you first are trying to organize it, what is the hardest thing for them to understand about the financial organization?

Jamie M. Lima (12:40.8)
Mm-hmm.

Jamie M. Lima (12:53.86)
I think the hardest part of it is that we never have all the information. It's different because you and I have been certified financial planners for a long, time doing this work for a long time. And you know what that experience is like.

When you're dealing with somebody who's in a traditional retirement planning phase of their life, right? Or they're thinking about what their future financial life is going look like. They come to you, they have their bank records and they have their 401k plan and they have their tax returns and they have all this stuff. In divorce, it is not unusual for us to get 60 % of the information the first go around. So I tell people all the time, like, don't panic.

This is normal, but, I use that word organize over and over and over again. And I think that sometimes people that think that's all we do is we organize the information, it allows us once we have a systematic approach to this and we have a list of documents we need from each of these clients as they come on board. And by organizing that information, it helps us understand what we're missing. And sometimes those are the most important pieces.

Right? Like it's nice that we have credit card information and we have this thing and we have that thing, but wait a minute. What about that account that, you know, maybe we're going to find some hidden money. Maybe we're going to find a 401k plan that we didn't know existed, that you didn't know existed. And by, getting information and organizing it and putting it in a way that we can actually work with it. It's kind of like putting a puzzle together, right? Like it's, it's much easier when you can put the, you put the frame together first.

Stoy Hall, CFP® (14:22.369)
or pinching.

Jamie M. Lima (14:33.15)
And I think that's what we do with that organization is we put the frame and then we know like, okay, now we can see what this is all supposed to look like. Now we, and we will see if there's any missing pieces and then we, then we can, we can search for them at that point.

Stoy Hall, CFP® (14:45.868)
How much of that 60 % and only getting 60 % on the first go round is about trust and still building that relationship?

Jamie M. Lima (14:54.368)
It's a good question. think there's some of that. I think there's some of that. The beauty of the work that we do is we are advocates for our clients. And that's the one thing that I try to get across to them early on and help them understand relative to the work we do is like, we're on team story, right? Like we are on your team. We're gonna be your lead block. We're gonna be there to help you sort through all this and...

I mean, we can only do so much to help you with the emotional aspects, right? And the legal aspects, because we're not therapists and we're not attorneys, but from a financial perspective, we're going to be there to make sure you get your best, your, the most fair and equitable settlement possible. And I think that resonates with people. So sort of, might be a little bit of trust. Like, do I really want to share this information? Maybe there's some embarrassment. You know, I'm 50 years old and I haven't saved anything for retirement yet, or.

We have a lot of situations where like, hey, we haven't filed taxes in five years. That can bring up anxiety and some sense of embarrassment for some people. And I can understand that. But once we get into it, I really think people understand like, wow, I've got to get them as much information as possible because this is important. And they really are advocates for us. that if there is any semblance of that, I think it fades relatively quickly.

Stoy Hall, CFP® (16:13.645)
Yeah.

the point I wanted to get across to everyone is like that first initial hurdle, whatever it may be, it may be embarrassment. Maybe you just don't have the information or you don't know where to get it. That's okay. But once you start getting in and working with, you know, professionals like me, you also that changes and now do they get you everything and now you are part of the team, we say part of the family, right? I am part of the family. Now, there's gonna be a lot of things that we, we get to know we get don't get to know there's some things in there, but it's all protected in what

I want people to understand by working with you or this episode in general is ultimately having someone like us in your court.

and representing you being advocate for you allows that to go a lot further elsewhere, right? No, we are not attorneys. We're not CPAs. We're not therapists. However, we do have a lot of experience and education in those areas to bridge some gaps to help you get moving in whatever directions needed while providing you with Hey, we do need to go this direction, right? It is time to get an attorney, get everything organized, it is time or it is, you know, honestly, it's time to get a therapist, like you might need to

Jamie M. Lima (17:15.912)
Mm-hmm. Yep.

Stoy Hall, CFP® (17:23.374)
see someone because it's above and beyond our scope at this point. But it's important to have someone that can help connect these areas that maybe you can't see because when you're living in a situation, it's like blinders. You can't see the bigger picture. Us coming in, we can actually help with that.

Jamie M. Lima (17:40.32)
Yeah, it's no judgment zone, right? I that's, I tell people all the time, like there's no judgment here. I don't care if you haven't filed taxes in five years. I don't care if you had to file bankruptcy a couple of years ago. we just need to know, understand what we're working with and then we can help you figure it out.

Stoy Hall, CFP® (17:56.492)
Yeah, absolutely. Absolutely. As we wind this up, and we are in the holiday season, what are some things you want to some takeaways you want people to come with this episode, or those that are sitting at home maybe thinking about going through a divorce or have friends that are or some initial maybe a couple tips that they should be thinking about as we get into the new year and they can take that step forward to get through that process.

Jamie M. Lima (18:20.692)
Well, I think a couple of things. Number one, as bad as you may feel like you have it, just know that there are people out there that have it even worse. Right. And, you know, those are lessons that I think we've learned as kids, right? Like our parents probably told us things like that when we were kids. And, and now we're, you know, I'm seeing it firsthand as an adult, like, wow, it's like, some people have it really rough out there. So, so we've got, we've got to be, we've got to give each other some grace. Right. Like.

You and you've got to be you've got to be accepting of other people and you've got you've got to really just Understand like the the holidays, especially if you're going through a divorce is a very very challenging time If you have and and even even more so if you have kids involved, right? Because now they're you're dealing with the emotions that go along with Christmas Maybe this is your last Christmas as your family unit and you haven't Said that you want to divorce yet. And maybe you're a significant other doesn't know that it's coming

Maybe you're planning on waiting until January or February to drop that bomb and you're dealing with all the emotions that go along with this as you're trying to pretend and put on a brave face through the holiday season. And that can bring a world of emotions and challenges in and of itself. So give yourself some grace, give other people some grace, because you never know what they're going through. A lot of them have it worse off than you do for sure. And I think

I think once you've decided that you want to go down that path and you've had enough, it's time for you to go in a different direction, whether it's amicable or not, you've got to find a way to surround yourself with team you. Team you. I mean, we have even talked about this in the first podcast we did together. Team you is making sure that you have your financial professionals there to support you. Your attorney, if you think you're going to need one, get your legal support.

mental health people, right? Find a good therapist and support groups that will help you through that. There's a ton of Facebook groups out there that can be there to support you. like, there's so many resources these days, divorce coaches, they're just, there's just so, so many people out there that they're out there to support you. And more importantly,

Jamie M. Lima (20:29.418)
keep your loved ones involved and keep them close to you. Because that was one of the biggest mistakes that I made in my own divorce is pushing them away. I'm not really pushing them away, but trying to keep them at arm's length so they didn't get sucked into that vortex of the divorce that I went through. And it was the worst mistake that I ever made because I actually lost some family members and some friends because they, you know, they just, for whatever reason, heard one side of the story, didn't pay any attention to mine and just ignored mine.

And that was because I kept them at arm's length. So whatever you can do to just have that support system around you is going to be helpful.

Stoy Hall, CFP® (21:05.964)
Yeah, so you heard it heard from Jamie, just talk through it, get your team involved. It's going to be a very emotional time during the holidays. If you need someone to talk to, Jamie is available. I'm available. We know others that are available. So if you're hearing and listening to this and you just want to DM us or email us, we're here. We're here for you.

Jamie M. Lima (21:26.342)
Absolutely, couldn't have said it better myself.