Money + Love Part VI: Break-Ups, Separations & Divorce

About the Episode

Breakups suck, but at least our Making it Count hosts were brave enough to talk through the financial ramifications of ending a relationship with Samantha Garcia, a Wealth Advisor at Halbert Hargrove. Together they demystify those common questions around finances and divorce and shed light into the best way to protect your assets through the process. Even if you are currently rocking the single life, you’ll want to tune into this episode – promise us, future you will be thankful.

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Cristina asks Question 1: “Before we get into how to deal with finances during a breakup, can you talk a bit about some of the financial issues that can contribute to a breakup or divorce?”

Samantha responds: “Money is one of the top reasons why couples break up or get a divorce. There are many reasons why this is such a contentious topic. First, you have the classic spenders versus savers. Typically, there will be an ongoing conflict between someone who wants to save money and someone who wants to constantly spend it. Unless there is an open, continual dialogue, it’ll lead to some not nice situations.”

“Debt is another big issue between couples. Debt can be very eye-opening in a relationship, which is why I'm an advocate of open and honest conversations. The last issue is who controls the money. This is where financial abuse can come into play. One person could be making all of the financial decisions or keep secrets from the other person.”

Will follows-up: “That’s very good advice and we’ve been given that advice about debt before – having that open dialogue is key because it can also eat away at a person. It’s very complicated to keep that a secret and try to swim out of it on your own versus asking for help and acknowledging that it’s just the situation you’re in. It doesn’t speak to your morality as a person.”

Read More: 5 Financial Money Problems in Marriage & What to Do About Them


Will asks Question 2: “What are some first steps people should take when going through a break-up or separation?”

Samantha responds: “I think it depends on the type of breakup or separation you’re talking about. If it’s just a committed relationship without any shared assets, then it’s good to make a financial audit. Create a spreadsheet to document everything you have and note which items belong to who. If you’re going through the divorce route, then you’ll need a team of experts who can help you.”

“You should get a financial advisor to help you go through all those assets and a lawyer to dig deeper if you need that. Regardless of a breakup or a separation, the first step is to figure out what you have. And then ask yourself if your partner was hiding anything from you. A good place to answer this question is by looking through your tax return since it has all your financial data right there. Once you’ve completed that, think about your priorities by deciding what to keep – are there things that are just yours?”

Will follows-up: “Recently I’ve seen some friends, unfortunately, go through the process of divorce and it’s very difficult, no matter how amicable it might be, there’s still a lot of feelings involved. One thing I’ve realized has been good in my relationship is using budgeting software that we can plug all of our accounts into and monitor together. It keeps us both accountable to what’s on each others’ credit cards and when bills are due and our spending habits. So since we have this full picture, I don’t think I’d ever be surprised by anything if we did have to go through a divorce.”

Samantha follows-up: “That’s a great idea because you are laying it on the table and having that open and honest dialogue as you go through your finances together. I don’t think all couples are that open with each other, but if you and your significant other are in a space where you can do that, then it’s a great idea.”


Cristina as Question 3: “Let’s talk about how property is divided when a couple gets divorced. This is a legal question, I think, and it varies from state to state. What are the frameworks that can be used?”

Samantha responds: “Since this is a legal question, I have to give a disclaimer since I’m not an attorney. However, using the knowledge I have, I can tell you that it varies from state to state. The two most common frameworks are community property states and equitable distribution.” 

“In a community property state, all martial property is divided in half. And there’s a big note there – marital property, not all property. In equitable distribution, the state determines what is fair to both parties.”

Cristina follows-up: “So if the wife makes more than the husband, in an equitable distribution, the wife would end up with more because she has technically put in more? Is that how it works?”

Samantha follows-up: “It could end up that way, but it’s going to come down to what the lawyers and judges determine is fair and equitable if it goes to court. Or it could be a spousal support situation, which is different.”


Will asks Question 4: “Let’s dig a little deeper into equitable distribution. What are the factors that would determine what’s equitable and fair to both parties?”

Samantha responds: “The judge is going to take a broad view. If your divorce goes to court, there are many factors that come into play. For example, a spouse giving up their job to take care of the children will be considered since they’re giving up their earning potential and financial health in the long run.”

“Another possible factor is if one partner is supporting the other while they’re in school. I've seen that happen in real life where one spouse supported the other while they were in school. They went to school to better themselves financially and in their profession. Because of that, there was not a 50-50 split and there was a settlement of the one who went to school back to the spouse who supported them during that time.”

“One other case that’s important to mention: Deliberately spending beyond your means or burning your assets ahead of a divorce settlement will also get taken into consideration by the judge and the court. This situation is more common than you think because one spouse may be blindsided by the divorce and think they are going to stick it to the other by doing this. But it just doesn’t always work.”


Cristina asks Question 5: “The question of who gets to stay in a shared living space, whether it’s a house or an apartment, is a big one. How can people negotiate and navigate that?”

Samantha responds: “It depends on your situation. If you’re living in the property you bought together before you got married, then that property is yours. If both parties are the owner, then you need to figure out who’s staying there and if they can afford it – the mortgage payment, the property taxes, the maintenance of the house, etc. If you both can’t afford it or want to get out of the situation, then you’ll need to sell it and divide the proceeds.”

“I’ve seen a lot of situations where kids are involved, so one spouse wants to stay in the house to keep that level of consistency for the kids and minimize all the transitions this process creates. There’s also the option of co-owning the house, but it does come with some tax implications.”

“If you’re dealing with an apartment, then you need to decide who’s keeping the lease. Similar to the house situation, can one person afford to keep the lease on their own? I’ve actually seen a situation where a couple that’s been together for a long time recently upgraded their apartment and they had that conversation before they moved. They asked each other, ‘If we break up, can you afford this on your own?’”

“It can get tricky, but my advice is to keep a logical head and keep the emotions out of your decision making as much as possible. That’s why I said earlier, having a team around you can help. It sounds harsh, but I tell my clients that I’m outside of their relationship and emotions and have no vested interest in whether they stay in the house or not. I can be the logical one and help them talk about the financial ramifications without the emotions.”


Will asks Question 6: “Can you talk a little bit about the risks involved with continuing to co-own a house after a divorce?”

Samantha responds: “I laugh because you would think if you’re getting divorced, you wouldn’t want to continue to share property with this person. But I think it is a legitimate question for certain situations. Maybe the spouse with the kids can’t afford the house or apartment on their own and the other spouse is committed to letting them stay.”

“Regardless, it starts with a mortgage. If you both own the house, then you both have your name on the mortgage. You’re basically relying on the other person to pay the half of the mortgage that’s theirs. So your credit score is dependent on the other person paying for the other half. And if you’re not on good terms with your spouse, this can impact you financially for a long time to come.”

“You also have to figure out who’s going to pay for repairs. If one spouse is living there, are they responsible for all the repairs of the house or is the ex-spouse going to contribute? These are all things that have to be decided before.”

“You should also consider the tax implications of co-owning a house after divorce. Are you sharing the mortgage interest deduction? If you itemize then that’s a big deal. And I think bigger than that, if you’re going to transfer the property more than a year after the divorce is final then you may lose benefits of making it a tax-free transfer.”


Cristina asks Question 7: “To me, the aspect of a break-up, separation and divorce that sounds the most painful is when kids are involved. What can couples do to navigate the financial aspects of continuing to raise children together after?”

Samantha responds: “The most important thing to remember is that this is happening to the kids, they are not making the decision to have their parents split. They are not at fault. You need to make sure the children are mentally and emotionally prepared for the divorce by having open conversations. Furthermore, you should make sure they aren’t involved in the disagreements or in the details of who’s paying for what.”

“There are parenting apps where you can input your child’s expenses and figure out how to split them. Because it’s so important to find a way to communicate with your ex about the kids without becoming hostile and I know that’s not always the case. So using an app like Our Family Wizard can help keep everyone accounted for when the kids have activities every night of the week. You can include budgets for clothes, food, entertainment, extracurricular activities, etc.”

“One thing I think often gets forgotten is that your child’s needs change over time. A six year old child will have different expenses compared to a sixteen year old. Talking about college is another topic that is often overlooked in divorced couples. Are you guys going to pay for college? And if so, who’s paying for it and how much are you contributing? Record everything in writing, especially if you’re not on good terms with your ex.”

Cristina follows-up: “Well, not only college, but other large purchases like buying a car for your sixteen year old. You need to work out those as well.”

Samantha follows-up: “Right and there’s also things like health insurance. When you were married, you were probably all covered together as a family. So when you get a divorce, who is now covering the kids? This is where bringing in professionals to help you understand and work through the nuances can really help.”

Cristina asks a follow-up question: “I would think one of the first things you need to do during a divorce is updating your will and life insurance policy because you probably don’t want your ex as your beneficiary any more. Is that right?”

Samantha responds: “Yes, as soon as the divorce is final, it’s time to update beneficiaries and your estate plan documents so your ex doesn’t end up with all your money if that’s not the intention.”

Cristina follows-up: “Also part of your will is a plan for what happens to your kids if something were to happen to you and your spouse. But if you’re getting divorced, is that still the plan? Do you and your ex still agree on that?”

Samantha follows-up: “I’m a little biased because I’m a professional in this space, but I do think this is where it really does make sense to have a team of professionals come along to help you – a financial advisor, estate planning attorney, someone to cover insurances, etc.”

Listen Now: Real Talk: Why You Need an Estate Plan in 2021


Will asks Question 8: “Let’s pivot back to breakups. Do people in non-marriage relationships have any recourse when it comes to dividing assets if they feel their partner isn’t being reasonable?”

Samantha responds: “There’s a lot of misinformation out there. I feel like we’re talking about the myth of the common law marriage. If you haven't heard of it, it’s the belief that if you’ve been living with someone for seven years, then you have a common law marriage and you’re entitled to a percentage of the shared assets. This is not true. Common law marriage only exists in a few states. It is considered legitimate in Colorado, Iowa, Kansas, New Hampshire, South Carolina, Texas, and Utah.”

“In Florida, the relationship must’ve been established before January 1, 1968. In Pennsylvania, the relationship must be established before January 1, 2005. It’s also important to note that there’s a high standard of proof for common law marriage. You have to prove you are eligible to be married, that you have planned to get married, and you have also presented yourself as married in public. If you can’t prove all three of those things, then there is no common law marriage.”


Cristina asks Question 9: “So, what can people do in the absence of common law marriage to divide assets and avoid disputes down the line?”

Samantha responds: “Think of it as you keep yours and I’ll keep mine. If you’re living in a house that the other partner owns, they should be able to keep it. Bank accounts are separate? You keep your own bank account. You have your own vehicles you’re paying for on your own? You keep it.”

“If there are shared assets, you would need to negotiate who keeps what. If each party contributes 50% then maybe it’s a 50/50 split for what’s left over. If it wasn’t equal, then maybe it’s based on what was contributed.”

“In terms of joint purchases, that’s going to depend on a case-by-case basis. For example, if you bought a car together, who is going to keep it or are you going to sell it? If you can’t decide then you can always hire an outside arbitrator who can help.”


Will asks Question 10: “Last question before we head into our rapid fire round. What’s your best advice in a situation where there has been financial abuse or control issues?”

Samantha responds: “The best advice is to seek professional help. You may not know everything that’s happening if you’re under financial abuse, so you will need professionals to help you sort it out.”

“First, you’ll need a lawyer. I would also suggest a forensic accountant to help you dig into the financials you may not understand. They’re going to figure out what happened, get all the records needed to show financial abuse, and find a way for the victim to receive some of that back.”

“If there’s financial abuse, chances are there is no trust in the relationship. Even though it’s important to sort through all the assets, most individuals don’t have the capability to do that on their own.”


Will asks Quick Question 1: “What advice would you give about dividing shared investments?”

Samantha responds: “It’s about deciding whether you want to own the investment or if you want to sell it. If you need to split them, which investments are going to who? Are you going to liquidate and then split the proceeds or are you going to take everything as it is?”


Cristina asks Quick Question 2: “When should one partner ask for spousal support from the other?”

Samantha responds: “Spousal support is usually granted when one partner earns significantly more than the other. However, this is more common in long term marriages.”


Will asks Quick Question 3: “What’s one piece of advice you’d give someone going through a divorce that we haven’t already discussed?”

Samantha responds: “I think this may be my favorite rapid-fire question. It’s going to be a rollercoaster ride. You’re going to have highs and lows. You’re not going to go through this rollercoaster just once, you will probably experience these same emotions a few times throughout the divorce. Don’t let your emotions guide your decisions. If you can, wait on making other life decisions that aren’t part of the divorce.”


Cristina asks Quick Question 4: “Is there any advice about investment accounts that you would offer that you haven’t already mentioned?”

Samantha responds: “The biggest one we’ve talked about is making sure your beneficiaries are updated as soon as that divorce is final. In fact, you don’t always have to wait. You can get a provisional beneficiary designation change during your divorce so your ex wouldn’t inherit your assets if you passed away.”


Will asks Quick Question 5:We usually try for one fun question but that’s tricky with this topic, so we’ll settle for something reasonably light. What’s the one personal belonging you would fight for in a break-up?”

Samantha responds: “I think I would take the KitchenAid stand mixer with all the attachments.”


Samantha Garcia is a Wealth Advisor at Halbert Hargrove. To connect with her, you can add her on LinkedIn here or you can email her directly at


In this episode, Cristina and Will shared Money Management Tips & Savings Strategies, a downloadable guide from Addition Financial's resource center. This guide can help you create a household budget, set up an emergency fund and live more frugally.

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