WSJ Your Money Briefing - The Most Expensive Mistakes You Can Make in a Divorce

Episode Date: June 10, 2025

Divorce brings out strong emotions — and sometimes, that means less-than-perfect financial judgment. Host Julia Carpenter talks with WSJ contributor Joann S. Lublin to learn how you can avoid five of the costliest divorce mistakes.  Sign up for the WSJ's free Markets A.M. newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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You have to think about the fact that this is a process that could end up causing you financial harm if you don't think through some of the consequences of how you're coming at the whole issue. And if you don't think through the fact that the person you were going to be post-divorce is not the same as the person you were who got married. But luckily, there are ways to prevent these mistakes before they happen. We'll talk with Wall Street Journal contributor Joanne S. Lublin about what you need to know to avoid these divorce-related money pitfalls. That's after the break. At Desjardins Insurance, we know that when you own a law firm, your bar for everything is high. That's why our agents go the extra mile to understand your business and provide tailored

solutions for all its unique needs. You put your heart into your company, so we put our heart into making sure it's protected. Get insurance that's really big on care. Find an agent today at Desjardins.com slash business coverage. Divorce can be painful and expensive, but if you're able to take lessons from other couples' costly mistakes, you can hopefully minimize the financial strain. WSJ contributor Joanne S. Lublin joins me to talk more. Joanne, you interviewed a variety of lawyers

and financial professionals for your story, which is linked in our show notes. I'm curious what they had to say. Why is divorce such a high cost enterprise? Because it's taking a toll on you both emotionally and monetarily. And what frankly makes divorces super costly is the fact that people get too caught up in the emotional side and it then lasts a long time to get divorced while the meter

is running, no pun intended, for those divorce attorneys. You highlight five of the costliest mistakes divorcing couples make. One of the big things people miscalculate is their cash flow as a single person. How does someone stop that overspending before it gets out of hand? You need to think through the fact

that you're going to be a different person post divorce, not just in terms of your marital status, but in terms of your financial status. You now are going to be not only supporting yourself and supporting a separate household, you may also need a place to live where you can share custody or at least have your kids visit. And so it's important before that divorce gets final to do some realistic cash flow projections that not only look at what your income is gonna likely look like,

but how your expenses are gonna change. And I know for a lot of my friends and family members who have been divorced, they've also never lived as a single person as an adult. That's absolutely true. Plus, you may have done a lot of things jointly, but the other partner, the other spouse, was the primary owner or was the person

who carried the cost of that particular item. And so all those various music subscriptions that you've got or other kinds of what might be considered not terribly essential costs of living but are part of what makes life enjoyable are things that are now going to be your solo responsibility. Maybe after the divorce you end up then taking possession of the house but the other spouse was the up then taking possession of the house. But the other spouse was the one who took care of the lawn. Well, now you're either going to have to learn how to take care of the yard or hire somebody to do your lawn care.

And sometimes in a divorce, one party is accused of hiding assets. How can someone make sure they're seeing every card on the table? There's absolutely no way to see every card on the table, whether it comes to the issue of hiding assets or lots of other issues that occur in divorce. The reason that some spouses hide their assets in advance of seeking a divorce is that once a divorce has been filed for, each spouse has to submit a financial disclosure. If they've hidden those assets in advance, then they're not going to show up in those financial disclosures. So one way you can avoid the possibility of the spouse hiding those assets is by filing for

divorce first before the other spouse has the inkling that you want to break up the marriage and therefore head off the possibility of hiding assets. If you think assets have been hidden despite any steps you've taken to try and make sure it didn't happen, and it can be costly, obviously, depending on how long it takes, you can hire a private investigator to try and do an asset search, or you can use a forensic accountant. Usually, that is someone that is retained through your divorce attorney. You write so insightfully too about the illiquid assets and some folks are guilty of discounting these

or undervaluing them. Can you tell us more about what these assets are and why they're so important in a divorce? It's something that is really hard to get rid of easily or hard to get rid of easily without incurring some kind of penalty. Think about, for instance, an individual retirement account, an IRA. If you end up then withdrawing from it before you reach a certain age. There's going to be penalties.

There's going to be extra taxes. Another illiquid asset is something like real estate. And so I cite an example in the story in which there was a female client of a financial advisor whose husband wanted to evenly split all their assets. But they included a 401k and they also included some private equity holdings that were not totally liquid. So in this case, the financial advisor, Stacey Francis, advised her client, who was a stay-at-home mother, to take only the liquid brokerage accounts because she knew that her client could more easily sell those holdings and

therefore supplement her future income. And of course divorce isn't a purely financial process. It's an emotional one too. And you interviewed Maggie Kim. She's a musician and writer of Divorce or Die, the newsletter. And she said her divorce cost so much and dragged on so long, precisely because of the emotions at hand. What lessons does she want other people to take from her experience?

One of the things that she advises is to treat divorce as a business transaction, not an emotional transaction. And if you view it as a business transaction, you will then be a little bit more emotionally detached. And to make sure you don't get your emotions running wild and therefore running up your legal costs, she suggests that you put together a support army. These are friends, relatives, individuals that know and you trust. And so before you send off that nasty text to your soon-to-be ex about what do you mean

you want custody of the kids, you have that support army, read over your proposed text, even though you think you've been cool and calm about how you drafted it, and probably shorten it and take out a few of the all caps or bad looking emojis. I think most important theme here overarching to the story is you have to think about the fact that this is a process that could end up causing you financial harm if you don't think through some of the consequences of how you're coming at the whole issue. And if you don't think through the fact

that the person you were going to be post-divorce is not the same as the person you were who got married. That's WSJ contributor Joanne S. Lublin. And that's it for your money briefing. This episode was produced by Ariana Ossbrew with supervising producer Melanie Roy. I'm Julia Carpenter for The Wall Street Journal. Thanks for listening!