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CNN Sunday Morning
Divorce Planning Can Help Working Women
Aired July 08, 2001 - 09:19 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: We're going to focus now on an issue that effects working women in America who are facing a divorce. And many women have careers that put them in the office nine to five, many others have careers at home raising children and those women are vulnerable because they don't get credit in the Social Security system and they're not building pensions of their own.
Joining me now is Bob Bordett. You may not be familiar with his career -- he's a certified divorce planner. You know, I always think about financial planners but not a divorce planner. In a way it's a but depressing that we have to hire you, Bob.
BOB BORDETT, CERTIFIED DIVORCE PLANNER: Yes, well, at times that could be but we try to bring an essence into the picture of the divorce for people helping them decide which assets to be looking at and how to make it more comfortable for them.
PHILLIPS: Certainly, they're facing a reality here -- it's happening. All right, let's talk about this generation here. I was reading a couple of articles about women now in their 60s before they were raising children, didn't really worry about savings account or pensions and now husbands are leaving them or they're getting divorced and they have nothing.
BORDETT: That's correct. And a lot of it is because they're not looking at their total financial picture knowing what was really there to begin with or what is there presently. They need to be able to examine to see whether they have pension plans, 401(k)s, profit sharing plans in addition to their -- the value of a residence and stock options.
PHILLIPS: OK, because it's not really easy many times to get a job in your 60s and start all over again with a career. So if a woman is going through a divorce, they hire someone like you, how do you begin the process? And is it cheaper to go through a certified divorce planner versus going through the court system?
BORDETT: I don't know whether it's really cheaper or not. It really depends on the situation. Sometimes we do add value that we can help them get a faster settlement and help them look at the overall picture, being able to say, "OK, here's what you have in assets." A lot of times they won't understand the pension plan, which could be a monthly payment to them. It's just not a value that is given on the statement at that time. There's a formula that has to be gone through to come up with the correct value.
PHILLIPS: Are there tax breaks for couples that may be getting a divorce?
BORDETT: Yes, I won't say tax breaks but the law allows them to transfer back and forth without any taxes involved.
PHILLIPS: Explain this qualified domestic relations order.
BORDETT: A qualified domestic relations order is known as a quadro. And primarily what it is, is the document for retirement plans that states how the retirement plan is to be paid out to the non-employed spouse. It goes to the plan administrator, signed by the court stating it is OK to send this money to the non-employed spouse. It also allows it where it can pass tax deferred at that time.
PHILLIPS: How do you get this drafted? When do you -- when do you...
BORDETT: Important?
PHILLIPS: Yeah, when is it important to get...
BORDETT: It gets drafted primarily during the divorce or towards the end after the divorce decree has been written up and the understanding's been there. Either the attorney -- there are some certified divorce planners that are now drawing up quadros. A lot of major companies already have packages for the quadros that you can go and get the package, follow their instructions and be able to then apply to the court with that.
PHILLIPS: A woman getting ready to have a divorce -- OK, no, let me backtrack a minute. I want to ask you this question. A new couple -- a couple that just got married. OK, you're not thinking about divorced -- you don't want to get divorced -- is it important if the woman doesn't want to work -- let's say she's going to be working in the home and raising kids -- can she say to the husband, "I need you to start a certain type of fund for me so if we do get divorced at least I'll have some type of pension or money coming?"
BORDETT: She could ask for an IRA spousal. Obviously, that's allowed. But the more important thing is to probably know what assets that they have from the start of the marriage and what's being accumulated. Just ask to know that there is a 401(k) plan or there are stock options being available because if she's more in tuned to what's going on if something should happen whether it's divorce or even death. If he should die and she becomes a widow she'll be -- already know what the assets are and what she has to work with.
PHILLIPS: Meanwhile Congress is getting ready to debate Social Security reform where stay-at-home moms could be getting money yearly, correct?
BORDETT: That's correct. And stay at home -- even stay-at-home moms now with a divorce if they've been married more than 10 years they do receive at least 50 percent of their husband's social security and it does not reduce the husband's social security upon retirement.
PHILLIPS: All right, Bob Bordett, certified divorce planner. I hope that I never have to hire you but thank you very much for the advice.
BORDETT: You're welcome. Thank you.
PHILLIPS: All right.
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