12 Days of Giving Day 2: The $400K Divorce Mistake We Caught Just in Time

Divorce is already brutal. But when the money is handled wrong, it stops being “emotional pain” and turns into “your future just got cut in half.” In today’s 12 Days of Giving episode, Jamie Lima is back—and we walk through a real case where a woman was about to sign a settlement that would have effectively given away $300K–$400K she didn’t need to lose and forced her to sell the home she desperately wanted to keep for her and her special needs daughter. 

Jamie breaks down how this client—Mary—came to him at the tail end of her divorce. Attorney in place. Settlement basically done. Everyone “felt” like it was fair. But the numbers didn’t smell right. Once Jamie dug into the pension valuation, the 401(k), the house, and the way the QDRO was being handled, it became clear: the math was wrong, the tax advice was off, and she was about to pay the price for other people’s blind spots.

We get into the uncomfortable truth: most divorce attorneys are not money people. They’re experts in law, not in pensions, actuarial tables, tax rules, or QDROs. Yet millions of people just nod along and sign whatever’s in front of them—because they’re exhausted, emotional, and just want it to be over. That’s exactly how life-changing mistakes get locked in for the next 20–30 years.

You’ll hear how a simple 30-day “divorce clarity” review turned a $2,000 investment into a $400,000 problem avoided, allowed Mary to keep her house, protect her daughter’s future, and avoid an unnecessary tax hit that her original advice would have triggered. This isn’t theory. This is what it looks like when someone who actually understands the numbers steps into the process.

If you’re going through a divorce—or you know someone who is—this episode is your wake-up call. Get a second opinion. Stop letting emotions and fatigue make permanent financial decisions. And stop pretending your attorney is your financial planner.

👉 Watch the full episode on YouTube: [YOUTUBE LINK]

This is part of our 12 Days of Giving series running from December 12–23, where each day we drop a real conversation designed to protect your money, your mind, and your future—not just entertain you for 30 minutes.

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 Divorce settlement mistake that almost cost her $400K
• 0:24 Real story: special needs child, house, and divorce stress
• 1:31 Why most people trust their divorce attorney with the money
• 3:06 The BS: “50/50 split” and pension values that lie
• 4:47 QDRO tax trap and bad 401(k) divorce advice in divorce
• 6:22 No BS: how to really value a pension in your divorce
• 8:11 Divorce attorney vs financial planner: who actually protects you
• 9:59 How a divorce clarity review saved her house and future
• 11:28 What to do before you sign your divorce settlement papers
• 12:56 Step-by-step plan to avoid your own divorce money mistake

Transcript

Stoy Hall, CFP®: 0:10

Happy holidays everyone. And Jamie is back for another 12 days of giving, and last year's was really, really fun. Also, one of actually the most downloaded episodes we had within the 12 days last year. He didn't know that, but I'm gonna lay it on him now with that. So without further do Jimmy, welcome back to 12 Days of Giving. Cannot wait for this year.

Jamie Lima, CDFA®: 0:28

I appreciate it, man. I can't, it went by in a blink of an eye. We, I feel like we just recorded last year's session and now here we are. Yep. Here we

Stoy Hall, CFP®: 0:36

are. So what do you

Jamie Lima, CDFA®: 0:37

got

Stoy Hall, CFP®: 0:37

for us this year?

Jamie Lima, CDFA®: 0:39

Well, uh, this year's is a little bit different. Um, I think it's a, it's it really a, an opportunity to share and pretty impactful story on a case that we had, um, recently this, this. I say young gal, uh, she may not feel like she's that young these days, but um, she's, it was one of our younger clients, uh, but she, she had a pretty unique situation where she had a lot at stake in her divorce and we. Spent a little bit of time with her peeled back the union, so to speak, and did a deep dive in some of the financial, uh, uh, documents that she had. And, and, and really just tried to spend some time with her going through her case. And, um, we were able to save her lots in lots of money, which was, I think is gonna really, in many ways, change her life, man. So, um, happy to share the details about it as much as we possibly can to give your listeners something to, to, to. Think about has, if they're unfortunately going through the divorce themselves.

Stoy Hall, CFP®: 1:45

Which we know statistically happens a lot, right. So it's not like something that is, you know, you know, cut outta the bag situation. Divorce happens a lot in America and it's something that we have to deal with. So walk us through as much as you can, kind of the background mm-hmm. Of, of getting into the divorce and reaching out to you. I know we bring that up on every episode. Mm-hmm. But we know it's very important to have a team, specifically when you're going through a divorce. Walk us through that a little bit and walk us through what, what you found out. And then we'll get through like how, not how much you saved per se, but like what you did in order to save her so much in the divorce.

Jamie Lima, CDFA®: 2:18

And you're right, man. I mean, like, you know, 50% of the people that we know and love, uh, that are, are in a, you know, marriage situation are likely, unfortunately gonna get divorced. And if they're in a same sex mar sex marriage or if they're in a second marriage, those statistics are a lot worse. Um, so a lot of people out there are going through this, but. This lady, uh, her name is Mary. I'm not making that one up. Um, and no, her name is Mary and, and she, she came to us, um, I forget how she found us. It probably, I think she, I think she came through one of our podcast episodes is how, how she found out about us. But the story, uh, the story goes, she, um, was on the tail end of her divorce, had hired an attorney. To, to get her through this process and wanted somebody to come in and really just get us be a second set of eyes on this potential settlement that she was willing, you know, planning on agreeing to when, before we, we got involved. And in her particular case, the, there's a, the, uh, another challenge that she faced is she has a special needs daughter who she is full-time caregiving for. So that adds in a whole other layer of complexity, especially around things like taxes and child support and, and ongoing support. Uh, so, so we, we, we sat with her and basically just, you know, try to get an understanding of, you know, where is she at right now and what is the framework for the agreement. And in this particular case, there's a pension involved. There's a 401k plan involved, and there's some other assets, one being, one being the house. And she really wanted to keep the house, but the, because of the amount of money she was, in this particular case, she's the breadwinner. And in this particular case, she was going to have to give up basically half of the assets to the, to the husband. And he wasn't really playing along as far as caregiving for the daughter. And, and so there was that dynamic involved, but there was also the, the complexity of. I, I might have to sell my home in, but I, I really wanna stay in it, but I ha I, I, I think I'm gonna have to sell my house simply because I don't know if I can afford to pay him, you know, care for my daughter, and then also give myself the future life that I am I'm aiming for. So, you know, we, and we hear this a lot, right? We, we, we deal with these cases all the time, and there. Every situation's different. But you know how it, you know how it is, even in the traditional financial planning roles that we play, you see the same movie over and over again. It might be different actors and maybe, you know, some different aspects that are different. But, you know, it's, it tends to be the same movie. And this was, we've, we've seen this one before. Well, she came to us and we, we have what's called a divorce clarity package. And in the divorce Clarity package, people come to us and for, for a reduced rate, they work with us for on a 30 day window. So they basically say, okay, like, send us all your stuff. We're gonna review what you have and we'll help you for the next 30 days. And these are, these are great engagements because not everybody needs us to work with them for a year or two while they're going through their divorce. Sometimes they just need your help in like point in time, which is what Mary needed help with. So we looked at the pension, which was the, the pension. People think that pensions are simply a calculation of how much money's coming in every month, and how long do I think I'm gonna live and multiplying those numbers together to come up with a, a, a, a value. Well, there's a lot more that's involved. There's things like the interest rate environment, the discount rate, the um, actuarial tables, length of employment, length of the marriage. There's a whole. The whole calculation we run to, to be able to give an actual, put an actual value on that pension. So we did that. Then we looked at the 401k plan and we said, okay, well, like how is this? How is this allocated? That was pretty straightforward. And then we looked at her options with the house and. When you looked at the agreement that she gave us, ultimately what it came down to was she was going to give up half of all the assets and she was, she was gonna sell the house. That was what the agreement was because based on, um, her situation that the attorney figured, Hey, this is probably the easiest way to cut this thing in half and just move on. And the other wrinkle on this was. They were, the, the way that the attorney was explaining how to do the Quadra, which is dividing up the retirement accounts, was also inaccurate. So we, we go through this whole thing and, and we're looking at it and we're like, something doesn't add up on the, the pension. So we're, look, we, we, we dove into it and ran the calculations and sure enough, the numbers that they were putting behind the pen, the value of that pension were completely inaccurate. So not only does this, is this lady putting all of her faith into this attorney to get her through this, the, the, the divorce, but she's also putting her faith in the mathematics behind the pension. She's putting her faith in the following the, the recommendations relative to the quadro and what to do with the house. And when we, when we actually spent some time with it and really dug into it. The difference between what we had as far as the value of the pension and what the attorney was giving was somewhere in the neighborhood of three or$400,000.

Stoy Hall, CFP®: 7:45

Oh,

Jamie Lima, CDFA®: 7:49

changes things because now she doesn't have to give up$400,000 over 401k. It's now down to like 140,000. Now she has more money in her back pocket where she can support her daughter. And keep the house. So you know, this$2,000 investment she made with us came out to be like a$400,000 win and she gets to keep the home that she wants to keep. So, you know, I felt good about this one man. I felt good about this one and I felt bad for the attorney'cause she had to go back to the attorney. And I'm not really sure how those conversations went'cause I wasn't privy to them, but I can imagine they didn't go too well. But sometimes it's just about. Understanding, you know, like how all this stuff works and, and the other, with the quadro, I, I forget exactly what the de but what the, the, the attorney was basically telling her, just taking distribution out of the 401k plan to do. And it was, instead of doing the quadro and dividing things up and not paying the taxes on those distributions. They, I, I forget exactly'cause it's been a little while what the, what the details are of the quadro. But I do remember that there was bad advice and it was related to the taxes. So we saved her on the tax front too.

Stoy Hall, CFP®: 9:03

That's massive.

Jamie Lima, CDFA®: 9:05

Yeah,

Stoy Hall, CFP®: 9:05

it's a big one.

Jamie Lima, CDFA®: 9:06

Yeah.

Stoy Hall, CFP®: 9:07

Um, how did she feel at the end of it, right? I mean, there's a lot of emotions there. One, she gets to keep the house daughter in the house, take care of her daughter. That is a, is a high, um, but you have the opposite of that emotion too, of Well, I've now maybe she feels wronged or, and not getting the right stuff from the attorney. How, how did her emotions go through this?

Jamie Lima, CDFA®: 9:29

Well, I remember when we, when I first met her, you know, how. How nervous she was, you know? And, and it's, it's okay for people that are working with financial planners, especially if you're going through a divorce, to have some of that anxiety because you don't know, really know what kind of feedback you're gonna get. You don't know if you have, um, you know, if you have a good argument or what your settlement's gonna look like. There's always questions that you have, which create creates that anxiety. And, and I could tell she had a lot of it. I, when I was able to deliver that news to her and we, we draft the whole recommendation and we'll put it all in, in, in, in, uh, documented form for her, and I was able to actually deliver that to her. Um, you could see the weight was lifted, for sure, for sure. That was, this was a, this was a huge win for us. Um, and now it's, you know, she, she's able to do a lot of the things she didn't think she was gonna be able to do. You know, and, and for the next, for the next chapter of her life. So

Stoy Hall, CFP®: 10:32

that's an amazing story and, and I think there's a few parts that I brought out, like the, what I figured out from it is one, just when you're going through the situation, no matter where you are in the process, unless you've already signed, obviously, is just a 30 day review. Just a little snippet of having someone else come in, one could save you, but also it might just give you that other opinion to stick to your case or to let you know what's real, what's not. The other is, and we've talked about this on, I think every episode we've been together is attorneys are great at what they do in their lane when it becomes to the money that's not their lane and it really should never be their lane. Right? That's what we do. That's what we're here for. And I thought you catching the quadro, that's, that's massive. And that one probably is one of the bigger ones in almost every divorce is some type of Quadro situation. For people to understand that like, yeah, you taking a withdrawal and then splitting it. Massive taxes, the quadro is there for his exact reason of being able to divide your assets without the taxable event. So those were the points that I really felt from this story that are, are one massive in what they do in terms of return of working with someone like you or, and or the fact of like, you just kind of need to know these things so you don't feel like you get, you know, cheap skated or any of those things.

Jamie Lima, CDFA®: 11:54

Yeah, and, and like you said, you know, the, the attorneys just don't understand this stuff, the financial aspects of things and, and how it all works. And to give bad advice on taking distributions out of her retirement account, you know, but instead of, you know, forgo or forgoing to the Quadro, or I, again, I forget exactly what the details were, but I remember I, when, whenever she told me that, I was like, I don't think that's how this works. And this, um, it wasn't, it wasn't too hard to uncover that mistake, but, um, yeah, man, it's. This again, this was, this was life changing for her and I'm glad to have been a part of it.

Stoy Hall, CFP®: 12:27

Absolutely. So everyone listening while you're sitting around, I'm sure you know someone who's going through a divorce, maybe going through a divorce. You are going through a divorce. Simplest thing is reach out. Whether it's to Jamie, myself, someone, obviously we want it inside of our own collective, selfishly, right? Mm-hmm. Uh, but hey, of course you're here as a resource because it is so important to get that set of eyes to see things that you don't know, especially if you're only working with an attorney. They don't see things either. And the experience that Jamie and his team have is, is bar none. So while you're sitting around maybe listening to this or even getting a glimpse of this, make sure to reach out so we can help. And I know there's a lot of people going through this, and just to have someone in your corner a little bit through this emotional time period will pay dividends regardless if we catch an issue like you just heard on this story today.

Jamie Lima, CDFA®: 13:17

And think about it from the, if you look at it from a, a medical perspective, right? If you had something major that you were dealing with from a medical perspective, you would get a second opinion and probably even a third opinion. When you're making decisions in divorce, these decisions are gonna impact you for the next 20 or 30 years of your life. These are incredibly impactful decisions that you're making, and sometimes you're making under what you feel like is a little bit of emotional duress. Why wouldn't you just take a beat and and get a second set of eyes on things? Is it just, it just makes sense?

Stoy Hall, CFP®: 13:49

It does it, it truly does. Jamie, appreciate you Have a happy holidays, everyone listening. Also, happy holidays.

Jamie Lima, CDFA®: 13:55

Appreciate you.