The Costs of Splitting Benefits with Tyler Wrage
All right, we get it. A review of benefits programs might not seem like the most entertaining fodder for a podcast about divorce. But wait, just hear us out.
See, if you’re on your spouses benefits program, you could be looking a unraveling a potentially expensive web of coverage, from life insurance to health plans to pensions, IRAs, and 401ks, each of which leads to choice you get to make on a specific — and regulated — time table.
So, what happens when your divorce gets in the way of the coverage that helps you stay healthy and feel safe? Tyler Wrage is a benefits consultant with The Strategic Group and joins us to walk us through the process of separation of shared benefits.
Pete Wright: Welcome to How to Split a Toaster, a divorce podcast about saving your relationships from TruStory FM. Today, your toaster is about to be uninsured.
Seth Nelson: Welcome to the show, everyone. I’m Seth Nelson. I’m here as always with my good friend, Pete Wright. Today on the show, we’re talking all about benefits. No, Pete, not those kind of benefits. What happens when your divorce gets in the way of the coverage that helps you stay healthy and feel safe? Tyler Wrage is a benefits’ consultant with a strategic group and joins us to walk us through the process of separation from his side of the house. Tyler, welcome to Toaster.
Tyler Wrage: Thanks for having me, guys. We had a t-shirt made up that said benefits with friends. I didn’t know that, that would’ve been apropos for today.
Seth Nelson: Is it friends with benefits or benefits with friends? I don’t really know how that works. Does it really matter?
Pete Wright: And which one do you get paid for? Wait.
Seth Nelson: Yeah, that’s a whole different show. On the advice the counsel, do not do that.
Pete Wright: May it please the court. Tyler, welcome. We’re glad you’re here today. This is one of those conversations that I don’t think we’ve ever had specifically about benefits and yet, I think a lot of people, all the people going through a divorce at some point are going to have to deal with this splitting the bennies.
Seth Nelson: Oh, yeah. Dealing with insurance is fun, right Pete? You can hear people hitting pause on the dial right now.
Pete Wright: Right. Please tell me more about COBRA!
Seth Nelson: Tyler, we don’t mean to make fun of your profession and what you do for a living, so why don’t you just share with our listeners exactly what you do generally. Then we’ll get into some specifics, and I have a pop quiz for Pete coming up that I don’t think he’s even [crosstalk 00:02:08].
Tyler Wrage: I didn’t know on the mic stand ranked, are we insurance agents? Are we above attorneys or below?
Seth Nelson: It depends if the claim gets paid, brother.
Tyler Wrage: [crosstalk 00:02:21].
Seth Nelson: Right? Typical Laura answer, it depends.
Pete Wright: Check your local jurisdiction.
Seth Nelson: All right. Tell us what you’re doing, Tyler?
Pete Wright: I have a brokerage here in Tampa, Florida, and we focus mainly on group insurances, helping business owners retain, attract, maintain their employees, that whole process from hire to fire and everything that encompasses. It used to be that we would schlep the health benefits, but in this day and age, we help out with payroll, HR. COBRA’s been mentioned a couple of times. Then making sure ultimately that the carriers are paying the claims. The beauty with an insurance contractor, maybe not beauty, is the only agreement that you have is as long as you pay your premiums, they’re going to pay your claims. We try and make sure that that happens.
Seth Nelson: Allegedly pay your claims. Allegedly.
Pete Wright: Lest we forget, there’s an attorney here. Allegedly.
Seth Nelson: Exactly. All right. Pop quiz, because there’s a lot of different kinds of insurance out there, Tyler. I want to make sure we’re focused on what our listener needs to know if they’re going through a divorce.
Tyler Wrage: Pete, how many different types of insurance can you think of?
Pete Wright: Well, medical, health insurance. I’m going by the insurances that I have. I’ve got dental and vision and general. Is it general health, basic health? I pay for dental because my teeth are… They don’t want to live in my head anymore. There’s short term, long term care. Did I say that already?
Seth Nelson: Short-term disability. Long-term disability.
Tyler Wrage: [crosstalk 00:04:05].
Pete Wright: Life insurance. Did I talk about that? That’s good. That’s something’s that’s in there.
Tyler Wrage: No, you’re good. Keep going.
Pete Wright: What else? There’s all the usual, like home insurance, flood insurance, car insurance, all the act of God insurance. Can you do that? I don’t know. Am I out?
Seth Nelson: That’s usually an exclusion from the papacy.
Pete Wright: You can’t actually call for that? What does Tyler say? [crosstalk 00:04:28] the act of God claim. All right, vision insurance. Vision. Vision. Okay.
Seth Nelson: Yeah. I think you got that.
Pete Wright: And that’s all just me, I imagine there’s more for businesses that I’m not thinking about.
Seth Nelson: I’m so disappointed in you.
Pete Wright: Is there attorney insurance that I have to have?
Seth Nelson: There is attorney insurance, but I usually don’t like my people buy it.
Pete Wright: To protect me from you.
Seth Nelson: Exactly. Why would I have people insured for that? That’s ridiculous.
Tyler Wrage: Pet insurance. Come on. That’s top of your list.
Pete Wright: Oh, [inaudible 00:05:04], I’m sorry.
Seth Nelson: We have a whole podcast on who gets the dog and you don’t even think of pet insurance.
Pete Wright: Of course. That’s the one.
Seth Nelson: Okay. So let’s take all those insurances and talk to Tyler about what he knows about and how he can help everyone today. So here’s the situation that happens a lot, Tyler. People are married, they don’t necessarily each have their own insurance from their place of employment. Usually one of the spouses is covered under a family plan on the other spouse’s insurance. And that’s what you do. You create plans and depending on whoever’s coming to you, they’re a business owner. And they say, I want to provide medical or health insurance, vision and dental for my employees. And I want to do it for the employee, but I also want to offer it to their family. You price out those plans and there’s a million [crosstalk 00:05:57].
Tyler Wrage: And most of the time, well, I guess some of the instances that we’ve run into, where the business owner now is going through a divorce or has been through a divorce and the spouse needs to find coverage, individual coverage. Once their Cobra is exhausted.
Seth Nelson: Okay. So first off, let’s just break this down because every time, every time you say Cobra, I think Cobra, [crosstalk 00:06:26]. All right. That’s not what we’re talking about.
Tyler Wrage: Which is kind of what it feels like when you get your Cobra insurance bills, you’ve just had your leg swept. That’s what it feels like.
Seth Nelson: Let’s talk about what Cobra is. Someone has insurance, they’re no longer going to be covered under their spouse’s insurance. That’s the scenario we’re setting up. They have yet to obtain new coverage.
Tyler Wrage: Correct.
Seth Nelson: Is that correct? And then we deal with something called COBRA to fill that gap.
Tyler Wrage: That is correct.
Seth Nelson: Okay. What is COBRA? How does it work and why is it so expensive?
Pete Wright: So we can get really nerdy. People think that COBRA stands for continuation of benefits, but it’s consolidated omnibus budget reconciling act of 80 something
Seth Nelson: Music to my ears Pete. Reconciliation act omnibus. I love these words, but what does that mean to the real person who actually needs their health insurance to go to [crosstalk 00:07:27].
Pete Wright: It means that if you lost group coverage at any point in time during the year that you would be able to go directly to the carrier and purchase the group plan that you were getting at a discounted rate because your employer was paying either 50% or more of the plan. COBRA, you can be charged up to 120% of the premium, direct to the carrier and continue on that group contract, this goes back to previous affordable care act type of legislation where you had very different contracts in the group world versus the individual world.
Seth Nelson: Okay. So just to break it down, cause he’s a simple guy. What we’re saying is I’m employed, my wife is employed, but I’m covered under her health insurance through her employer. We’re getting a divorce and I no longer have health insurance, but I can buy at up to 120% of whatever the premium is, which you know why you paying more for it, but I can buy it and I’ll have the same coverage that I had if I was still on my wife’s insurance.
Tyler Wrage: That is correct. That continuation of benefits.
Pete Wright: That’s what I was going to say. You’re not changing any of your coverage. You change your same clinics, hospitals, same doctors, you don’t change anything. This is just to fill in the gap until you figure out a plan that is, I guess now more affordable.
Tyler Wrage: Correct.
Pete Wright: 120%. Right? So up, up to 18 months in order to maintain the plan that you were on and the deductibles that you had met towards that, or any out of pocket spend that you had contributed towards that plan, which is a big deal for a lot of folks who have ongoing health issues, which the majority Americans, I think do these days,
Tyler Wrage: Right? So they can feel comfortable. If you’re going into a divorce, at least there’s something that will… If you have a surgery scheduled or dental stuff in motion, you can feel comfortable knowing you at least have 18 months to work through those, whatever those issues are.
Pete Wright: Correct.
Seth Nelson: At a higher premium rate though, you got pay for it.
Pete Wright: There is a cost. A [crosstalk 00:09:52].
Seth Nelson: Oh, that’s easy Tyler [inaudible 00:09:55]. Good. Let’s move on. Okay, but let’s talk about this. Because timing is important here. Everyone check your local jurisdiction, but I will tell you in Hillsborough County, Florida in a great state of Florida, Tampa, Florida, when you are going through a divorce, there is a court order called a standing order that says everything stays the same. You’re not supposed to just one spouse cancel the other spouse’s insurance. So let’s just assume the premiums have been paid. You’ve met your deductible and were in September and it all renews in January and you have some surgeries or you have some doctor visits or you have some well visits or some annual visits that maybe we’re a little behind on. We should get those done right away. Right, Taylor? Because they’re already covered. We’ve met our deductible in essence, we’ve paid for them. Let’s use them because in Florida, when you get divorced, your former spouse cannot keep you on their health insurance anymore. Is that last statement correct?
Tyler Wrage: You cannot be on that group contract as a spouse any longer, you will have a COBRA offering. Like we talked about or through the court order, which I’ve seen in my instances we have some attorneys say, "Hey, I have this couple going through a divorce. I need to know how much it would cost in order to have to put this spouse on an individual plan. And then they can litigate to that."
Pete Wright: You’re saying so they could stay on an individual plan on the company during the process of divorce. I’m a little bit unclear on what you just said.
Seth Nelson: So I think what Tyler is saying is this, Pete, you’re going through a divorce. The court requires you to maintain coverage for your spouse, but when you are divorced, you’re no longer allowed to be on that plan, it has nothing to do with the divorce court. It has to do with the contract with the insurance company.
Pete Wright: Okay.
Seth Nelson: So now the question is, in my hypothetical, I’m going to need coverage. My employer doesn’t offer it. I have to get my own individual plan and I want to know how much that’s going to cost me because I’m trying to figure out my budget. I’m trying to figure out if my former spouses are going to have to pay me alimony. That’s a need that I have. How does that all get put into the sauce. Right, Tyler. Is that accurate?
Tyler Wrage: That would be correct
Pete Wright: If I do nothing. Right. Do I automatically switch into COBRA? Does that just happen the second the contract is defunct with the group plan?
Tyler Wrage: It is an automatic. You will have to elect COBRA. They will send you a COBRA offering. That is another law that’s out there that states that a COBRA offering needs to be made and then responded to in an appropriate amount of time. And then premiums received an appropriate amount of time, 45 days from that termination.
Seth Nelson: Which is fast. Pete, think about that, 45 days, you just got through a divorce either by a trial. And the judge finally signed the final judgment when he got around to it, or by a settlement agreement and it got mailed in, and then you got it and you’re like, I’m done. And you forget about the COBRA in 45 days, which comes quick. You now have [crosstalk 00:13:29].
Pete Wright: Don’t forget, we’re speaking in some grand hypotheticals, but if you have ongoing medical issues, getting appointments right now, right now is really hard. So that 45 days might as well be six months for a lot of just sort of routine stuff that you’re trying to get done.
Seth Nelson: Absolutely. It’s so hard to get in to see the doctor. So that’s the one thing lawyers got. We can always blame the doctor.
Tyler Wrage: Did you cue that up before we started our show today?
Seth Nelson: I did not, but my uncle and my cousin are doctors. So I like to make fun of them about that.
Pete Wright: So Tyler, how much does it cost? What does an individual plan cost somebody these days? And now you’re going to give me oh, their age and sex and [crosstalk 00:14:13].
Seth Nelson: But he already dropped the hint. Right? This what we were talking about pre ACA, that I assume has changed some things for people. Right?
Tyler Wrage: Right. Affordable care act did change the scene of the individual market. Pretty significantly. One of the positives of the legislation was it did away with excluding preexisting conditions and health underwriting on individual contract. So if someone does have ongoing health issues, they are able to find a plan that will accept them immediately. They won’t have to worry about any pre-ex clauses or anything to that nature. And I’m just going to stick with positives. I’m going to stay positive today. The current administration and one of the COVID bills have expanded the amount of dollars that are available for tax subsidies on the marketplace. So we do have some clients that are unable to get any tax subsidy to help mitigate some of that individual plan cost that has been expanded a little bit.
Seth Nelson: My understanding of this Tyler is what you’re saying is, okay. I was covered under my wife’s insurance. My employer doesn’t offer it. I make $30,000 a year. I can’t afford private insurance, but we have this big legislation that came out that says, there’s this market I can go to, I can buy insurance. And because of the income that I make, the government will pay a portion or all of my premium.
Tyler Wrage: Correct. Yeah. There been tax subsidy money set aside through pulled 10 cents at a time out of group premiums to sit over here and to pay for that.
Seth Nelson: So there’s a mechanism where the government’s allegedly collecting money so they don’t lose more money than they’re paying out, but we never trust what they’re saying on that front. But as far as the person that’s getting the insurance [crosstalk 00:16:15]. We don’t have to pay as much and we can get covered well.
Pete Wright: And there’s somebody listening to this who might be on the verge of losing the benefits, that’s important to know, even just that there is a direction. If you haven’t been paying attention to insurance legislation lately and omnibus bills, it’s nice to hear there’s something, there’s something that it sounds like is livable. Because the last time I was on COBRA, it was the fastest thing I could do to get off COBRA, because that was ridiculous a 120% of the full bill. So it feels like there’s opportunity here.
Tyler Wrage: Yeah. It is definitely good. And we’re seeing here in the state of Florida for the first time, since ACA was implemented, that the carriers that didn’t want to pay or play are, are coming back in. So we only had Florida blue Molina for a long time, Oscar health. Now we have United healthcare coming back, individual market, Aetna, Cigna, Humana coming back into that space. So something has happened where there’s been a stabilization of that individual market probably is that Florida blue has about 80%, 85% market share of that. And they’ll probably be trying to shed off some of those clients that they don’t want to have on any longer.
Seth Nelson: I want to point something out though. We’re talking about somebody here who the individual in my hypothetical, who cannot get insurance through their employer. So it’s called private pay, right? Private insurance, individual policies. Now, I know that there’s this magical window in my business where people have re-enrollment periods. What happens if you lose your insurance? Because you get divorced on February 1st or March 1st, but your employer re-enrollment for new people to come on the plan is until the end of the year. Can they hop on that?
Tyler Wrage: Lets just add to the hypothetical, the spouse that is insured, their group plan renews October one, the spouse that is the dependent spouse on the plan who’s going to have to [crosstalk 00:18:42].
Seth Nelson: I’m losing my insurance,
Tyler Wrage: You’re you’re losing your plan and the judge signs off in March. So you would have the ability to either or elect Cobra if you wanted to stay on that plan. And if you had the funds to do that, or you could enroll through special enrollment period onto a marketplace plan or just a private pay plan through one of the other carriers, through that special enrollment.
Pete Wright: So three choices, one, you get COBRA. We all know about that, it’s outrageously expensive. Two, you get private pay, but three, if your employer offers health insurance, you should go ask them right away. I’m getting divorced. I want to make sure the day the judge signs, the divorce decree, the file final judgment, how soon can I get on our coverage that you offer? And what happens, Pete is a lot of times, there’s a carve out to the open enrollment period. If there’s been a change that falls to say, "Hey, something’s changed in your life." And therefore you can get on the plan now. So one of them is if you get divorced, right? Another one, which we don’t typically think about, you have a kid, all kids are not born during the open enrollment period. So this isn’t a novel concept, but people forget about it. And they panic because they’re like, "but no, I heard open enroll just closed. I have to wait a year and I’m going to have to pay COBRA at 120%."
Tyler Wrage: Check with your employer.
Seth Nelson: So we’re giving you a couple little check things to do, because this sneaks up quick and can have major health and financial implications on your life with a little bit of time of little bit of investigation. And do diligence we can maybe make this a little [crosstalk 00:20:35]
Tyler Wrage: That’s a great point, Seth, because it’s the ying and yang of all of those, right? You have those life events, divorce, or a marriage, you have a death or a birth move in and out of state. Those are all special enrollment period triggers. And since you’ve been in long time, longstanding employee for that company, you would not have to go through your waiting period that a new hire would have to go to, to come onto the plan either, a 30 day, 60 day, 90 day, whatever that contract indicates. So you’d be eligible to come on first of the following month saying, hey, my plan terminates the end of this month, I’ll be on next month.
Seth Nelson: So play that out, Pete, right? You get divorced on the 15th. You have it all lined up with your employer. You’re allowed to start coverage the first of the next month. So we’ve got let’s call it 15 days.
Pete Wright: So for those 16 days, wear your seatbelt. Take good care of yourself.
Seth Nelson: But something happens in that gap. You’re still eligible for COBRA. Even after the fact, as long as you get the forms, you fill, them out, you pay the premium.
Pete Wright: Even if you have not done anything?
Seth Nelson: You’ve got 45 days to do it. You can look back, don’t rest on that. You want to be doing this up front. So you’re going to want that Cobra coverage for those 15 days, but maybe they didn’t get you the paperwork in time. Like Tyler said, it takes a certain amount of time for them to get it to you. It’s got to be reasonable. You’ve got to reply reasonably. You’ve got to be watching this stuff and remember you just had a car accident because you’re out celebrating because you finally got divorced. So let’s be smart about [crosstalk 00:22:17].
Tyler Wrage: The celebration until the second. Can we just do that? Can we flip the table areas here? Anything I need to do if I am getting separated and it’s my spouse that’s going to coverage. Do I need to do anything as a special trigger condition to make sure they’re off the roles? What do I need to be thinking about?
Seth Nelson: Tyler, you got a business owner. They come to you. They say my wife’s we’re getting divorced. She’s working at the company. She’s resigning, we’re getting divorced. She’s out. What [crosstalk 00:22:48].
Tyler Wrage: He’s going to notify us. We’re going to reach out to the carrier, reach out to that spouse, make sure that they are fully aware of all of their options. We really try and make sure that the employee or employer’s spouse has all of their options available. Are you working good, bad, indifferent? It is a life change and they are going to have to have some sort of continuation of their coverage whichever way.
Pete Wright: And usually Seth, just to go back a little bit, we put in the front end of the contract that employees are covered that full month so that they don’t have a drop off mid-month.
Seth Nelson: Oh, so they don’t have to worry about the 16 days of [crosstalk 00:23:33]?
Tyler Wrage: Yeah.
Seth Nelson: All right. Go celebrate your divorce.
Pete Wright: Don’t worry about it. Only if you’re working with Tyler. I wanted to ask that question knowing that it’s easier for the person who’s not losing benefits, but in the spirit of a divorce podcast about saving relationships, what are the things that the person who’s going to keep the benefits? What are the things you can do to come to it from a position of Goodwill in the divorce process and make sure that you’re helping a along the way and not making it worse for your former spouse. I don’t know Seth, is there a comment?
Seth Nelson: Yeah, we do it a couple ways. The triggering event is the date. The final judgment is signed that the divorce should be assigned by the judge. So where we are, we’re in the fall here, we’re getting close to the new year. I will sometimes, by agreement between the parties, delay sending in the final judgment. So you work out a marital settlement agreement, you work out a parenting plan, but everything is settled in your case. The all only thing left to do is to send it to the judge. So he or she puts her signature on it.
Pete Wright: Okay.
Seth Nelson: Nothing check your local jurisdiction requires us to do that that day. In fact frequently, I’ll ask, do you have any medical procedures coming up? What’s going on? Can we wait three months before we send it to the judge? We’re all good here. Everything’s signed, sealed and delivered. It’s signed and sealed. It’s not delivered. The judge has to deliver it. So you just wait for the entry of the final judgment. And I’m going to dovetail on this too. Another reason to wait other than insurance is if you are still married at the stroke of midnight on the new year, happy new year, you can file married joint for the previous year. If you get divorced on December 31st, you cannot file married joint. So sometimes we’ll delay sending it to the judge till the first week of January. So we can take advantage of the tax code to give the government less money by having them do their joint taxes together for the previous year. Even though we’ve had the settlement signed and sealed since September or October. Or even longer.
Pete Wright: Okay. Lots of ways to play those dates. I hope this is useful for people as they’re thinking about strategizing their divorce. I want to ask one more question, Tyler, and maybe it’s loaded. We were asking about the ACA and you fanned a little bit. You said, okay, I’m going to stay positive, I’m going to stay positive, I need to know what are the pitfalls that are in your head that you’re not talking about? What are the things that people need to be aware of that might come up and bite them?
Tyler Wrage: A lot of times it goes back to what Seth was just talking about. So in order to qualify for your tax subsidy and get that premium to where it could be affordable and reasonable, you are going to have to get out your magic ball and predict what your income would be. That you’re going to show to the government for the next year.
Seth Nelson: I like how Tyler said that, not what you really earn, what you’re going to show to the government. Those can be two separate numbers, but we’re not giving tax advice here.
Tyler Wrage: I’m not a tax CPA or tax attorney or anything.
Pete Wright: If you get a tax subsidy based upon a figure, and then your actual income either fluctuates. If it’s higher and you should have gotten less subsidy money, then there would be potential to be dinged on the subsequent tax year. And we’re going to have to pay for this stuff somehow. So I don’t see taxes going down at any point in time and where people-
Seth Nelson: Pete, you just put him in the like hot seat. You see him squirming over there. He doesn’t want to answer these questions.
Tyler Wrage: Can we have the tough conversations? Sure. Let’s let’s get after it and have it.
Pete Wright: Well, again, I’m listening to this and I’m thinking, okay, you’ve painted a half hour rosy picture of the fact that I have opportunity, as long as I stay on my dates as long as I’m aware of the consequences of filing and make sure that my current employer is aware. There’s a lot of stuff here that makes splitting these insurance benefits not feel so terrifying. I just want to make sure that if there is a mind in yonder field that I don’t step on it.
Seth Nelson: Well, the stepping on it is if you don’t know what you’re going to be making, say I need it. And then, Hey, great news. I got a job making 150 grand, not 30, or I’ve always been doing part-time Realty being a real estate agent because I was raising the kids. But now that we’re getting divorced, I’m going to pick up the pace. I only think I’m going to make probably for the next year or two, about the same, maybe a little more, I’m putting more time in, but it takes time to build a business and you have a stellar year. So you might owe some money back. So you just have to watch it.
Pete Wright: A worst case is, okay, there’s a bill that’s going to come due and it may not come due for a year until I do my next year’s taxes. I feel like, at least you should know that.
Tyler Wrage: Right? Those are some of the pitfalls that I can think of. And I’ve only heard a handful of horror stories where people were really game in the system and ended up owing a bunch of money. And I don’t really feel bad for those folks. But the minute that you do start earning more income than you had reported that you were going to getting on with healthcare.gov and adjusting your tax subsidies is definitely the the best way to go. One of the issues too, is if people are late with the COBRA response, then they could end up… We do see this quite a bit is people owing two or three months of COBRA. And so if you have, let’s say you and three kids that would be probably close to two grand a month in premium, just for roundabout so now it’s 6,000.
Pete Wright: Suddenly you’re in $6,000.
Seth Nelson: Yep. So check first with your employer if you’re employed to see if you can get insurance, can’t, reach out to someone like Tyler and see if what you can do on either the ACA or on private insurance. But the concept is here. Let’s start dealing with this stuff early. If there’s a way to delay and keep you on. If you got some medical procedures that you need, let’s get them done. I know you got a lot on your plate. You’re going through a divorce. It’s not easy, but [crosstalk 00:30:41].
Tyler Wrage: Seth I have a question for you, when it comes to health savings accounts.
Seth Nelson: Oh no, no. Tyler, I don’t answer questions on this show. That’s not how it works. Go ahead.
Tyler Wrage: Health savings accounts are those viewed as a marital asset?
Seth Nelson: Florida family law check your local jurisdiction. Absolutely. You got a health savings account. You got money in it. The money was put in there during the marriage. That’s going to be a marital asset now, because you’re no longer on that insurance, you might not be able to get that. Let’s call it a thousand bucks out of it. But if there’s a thousand dollars cash somewhere else, then maybe you can get that cash. And it’s just an offset. But yeah, we look at [crosstalk 00:31:21].
Tyler Wrage: You can pay Cobra premiums or long term care premiums out of health savings counts in that pretax money that went in.
Pete Wright: Good to know.
Seth Nelson: And then there’s all sorts of fun tax calculations that we can do versus net gross. And that’s when Pete eyes roll in the back of his head and he [crosstalk 00:31:40].
Pete Wright: I mean, well, I got things to do so I can just mute out and just nod. And you guys can go to town. It’ll be great. Good podcasting. Hey Tyler, thank you so much for hanging out with us today and sharing your insights. Where do you want to point people who are in your area to learn more about what you do?
Tyler Wrage: Our website is a great resource, SGflorida.com as in strategic group, florida.com.
Pete Wright: If you look at the strategic team page, you’ll find most of them look a lot like Tyler, amazing resemblance those people.
Tyler Wrage: On the strategic team.
Pete Wright: Yes.
Seth Nelson: Couple related folks.
Pete Wright: Couple related folks.
Seth Nelson: Is that a nice way to say Pete, that Tyler’s family tree? What were you trying to say there?
Pete Wright: I’m saying there is a lot of inbuilt wisdom in that family to help you in your needs here, which is exactly why we have Tyler on the show. Thank you so much, Tyler. This has been fantastic. You’re a real asset. We appreciate your insight today.
Tyler Wrage: Thanks for having me guys. I appreciate that.
Pete Wright: Before we close up, we’ve got a question. It’s question corner. Welcome to question corner, Seth.
Seth Nelson: Let’s hit it.
Pete Wright: I got one from Angie who writes us this question, looking for your support. She says, hello. I really enjoy your show and all the great advice. And thank you, Angie. My question is, how will I know if I can stay in our home? Now, Angie goes on to tell us some of her backstory, she’s married for 30 years. Her husband wants to divorce. They haven’t been happy for years. She wanted to try and work on it. It sounds like they’re not going to work on it. The relevant part of the question is thus, I don’t want to move my boys out of our home, but I can’t pay the mortgage. I’m a stay at home mom and homeschooled my boys and one is now 17, but I homeschooled my 21 year old too, who is now in college, but also lives at home. Please help. I wish I could hire you. Broken hearted, Angie, what do you think, Seth?
Seth Nelson: I think she’s broken hearted on the divorce that she can’t hire us, Pete. That’s what I think. I could be wrong on that.
Pete Wright: Well, you choose your dreams.
Seth Nelson: Exactly. Okay. So, great question comes up in almost every case, especially when you have children always check your local jurisdiction. I’m just giving you the concepts of Florida family law, or generally speaking, what you should look for to see whether you can stay in your home. She makes a big assumption here where she says I can’t afford it. So let’s back up. When we’re dividing assets, you have to do in Florida, it’s called equitable distribution. So if she gets the home and it has equity of a hundred thousand dollars, it’s worth $300,000. You have a mortgage of $200,000. If you sold it, we’ll ignore closing costs. If you sold it, you’d have a hundred thousand dollars left. If there’s a retirement account or a cash account or a brokerage account, or any other assets that add up to a hundred thousand dollars and the husband keeps that a hundred grand, whatever it is, or combination of items and you keep the house. So we start there. Well, now she says, that’s great, Seth, but I can’t afford the house. Okay. So now we’re moving over to alimony based on what is the mortgage? What are your other expenses? And what does your state or local jurisdiction do to help support you get money from your former spouse potentially to pay part of your expenses, which would include the mortgage. There’s all sorts of complications with that. Maybe you have to try to refinance it to get his name off the debt and only in your name. There’s all these things. The problem that everyone runs into is if there are two incomes in one house and you go to two incomes and two houses, your standard of living mathematically is going to drop because we have more expenses. So you have to then make some decisions. Do you want to be house four? Which means you put every last penny into paying that mortgage, because it’s so important for you to keep those kids in that house. And even though they’re adult children, one is one’s about to be, in Florida, as much as we love supporting our kids and that they’re in college and they’re living at home to better their lives. And that’s what we’re doing to be able to get them a higher education. The judge is not going to consider that as a viable reason to keep the house. They’re going to look at the numbers on this stuff. Now a 17 year old in their senior year, a judge might say, look, we’re going to let you keep the house till your son graduates, but then you might have to sell it. So talk to your lawyer, make sure you understand division of assets and debts. Make sure you understand any potential alimony and then let’s make some decisions on what if anything are you willing to go without, to keep this other thing that’s [crosstalk 00:36:58].
Pete Wright: And I think this goes back to something we’ve talked about before. How much can you set aside the emotional fear of uncertainty around the house and live in fact and truth. And I think what Seth has just outlined is the, how you will know stuff. So do your best to set aside how the fear and answer those questions before you start making a plan in your head
Seth Nelson: And it’s problem solving, Pete, right? Everything about all the homeschooling, all the hard work she did raising those amazing kids. That is all true, but it might not be relevant to solving this problem. How can I pay the mortgage? You know, Pete, at the end, we joked about it where she said, you know, I wish I could hire you. So I’m assuming she’s in a different jurisdiction, but some people have can’t afford to hire a lawyer. The other thing to do there is reach out, see if some lawyers do some free consultations and ask them the same question you just pose to us to help, not just you. And we appreciate the question so much, because it helps others that are listening that have the same question, but reach out. Maybe you can get a, a free consultation and you can get a better understanding of the lay of the land, on how these issues would be resolved in your local jurisdiction. And you can also ask them, how can I pay? I’m telling you, Mr. attorney, I can’t afford you. How can I pay for my divorce when I have such complicated issues? And this is such an important issue in my life and for my children?
Pete Wright: Outstanding. Looking for the right people on the team. Angie, we wish you the best. So thank you so much, Angie, thank you so much for writing to the show for allowing your question to be of support and help to others. On behalf of Seth Nelson, America’s favorite divorce attorney and our fantastic guest Tyler Wrage. Thanks everybody for joining us. We’ll catch you next week right here on how to split a toaster, a divorce podcast about saving your relationships.
Speaker 4: Seth Nelson is an attorney with Nelson Coster family law and mediation with offices in Tampa, Florida. While we may be discussing family law topics, how to split a toaster is not intended to nor is it providing legal advice. Every situation is different. If you have specific at questions regarding your situation, please seek your own legal counsel with an attorney licensed to practice law in your jurisdiction. Pete Wright is not an attorney or employee of Nelson Coster. Seth Nelson is licensed to practice law in Florida.
Seth Nelson is a Tampa based family lawyer known for devising creative solutions to difficult problems. In How to Split a Toaster, Nelson and co-host Pete Wright take on the challenge of divorce with a central objective — saving your most important relationships with your family, your former spouse, and yourself.