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BROOKE SUMMERHILL has written a new book to address “Divorce and the Wealthy Woman.”
In this conversation, Brooke discusses the complexities of divorce, particularly focusing on the financial aspects that wealthy women face. She emphasizes the importance of understanding one’s balance sheet, hiring the right professionals, and navigating complex assets during divorce. The discussion also covers the emotional components of divorce, the significance of having a supportive team, and the benefits of open conversations about finances, including the role of prenups.
Takeaways from “DIVORCE FOR THE WEALTHY WOMAN”
- Divorce can be a daunting process, especially regarding finances.
- Understanding your balance sheet is crucial during divorce.
- Breathing and staying calm can help alleviate anxiety.
- Hiring the right professionals is essential for navigating divorce.
- Complex assets require specialized knowledge and support.
- Cash flow planning is vital for post-divorce stability.
- Parenting during divorce needs careful planning and support.
- Open conversations about finances can strengthen relationships.
- Prenups can facilitate healthy discussions about money.
- Divorce is a journey that can become easier with the right support.
Chapters
- 00:00 Introduction to Divorce and Finances
- 02:58 Understanding the Balance Sheet
- 05:45 Navigating Complex Assets in Divorce
- 09:05 Building Your Professional Team
- 12:04 The Emotional Component of Divorce
- 15:09 Modeling Settlements and Cash Flow Planning
- 17:56 Parenting and Financial Responsibilities
- 20:41 Preventative Measures and Financial Awareness
- 23:53 The Role of Prenups in Marriage and Divorce
Transcript of “DIVORCE FOR THE WEALTHY WOMAN”
Frazer Rice (00:01.186)
Welcome back, Brooke.
Brooke Summerhill (00:03.378)
Hi, thanks so much for having me. I’m so excited to be here. Let’s chat about the most fun topics in the world. Divorce and finances, right?
Frazer Rice (00:09.952)
Well, and codified in your new book, Divorce for the Wealthy Woman. I have already started, and I think it’s a winner for a bunch of reasons. The big one really is addressing a viewpoint that I think has been missed by the financial books generally speaking,
Brooke Summerhill (00:15.794)
Mm-hmm.
Frazer Rice (00:31.086)
It really corrects a problem, I think, around information asymmetry in finances generally. And unfortunately, we’ve both been around it from a divorce perspective. Tell me what, first of all, let’s let our listeners remind themselves of your practice. And what do you do there? And then what was the book trying to accomplish?
Brooke Summerhill (00:53.554)
Okay, so hi, I’m Brooke Summerhill. I do specifically for the last like 15 years in finance. Specifcially in the last five specifically in divorce and finance for wealthy women. So I’m not very creative my book specifically and my podcast is literally called divorce for the wealthy woman. I love being able to understand the perspective of someone going through divorce,not feeling the fire, and creating a years long fight.
I help alleviate the stress of divorce and go through the finances, the emotional aspect, I’m in financial psychology. I’ve been doing that and I plan on continuing doing that. It’s a fun, fun, fun career path for me.
Frazer Rice (01:40.526)
One of the great things I think about your book is it starts where I start. You really have to be comfortable with what your balance sheet looks like.
Take us through a little bit about your experience in helping wealthy women get acquainted with something they weren’t familiar with initially. However, they have to get familiar with it real fast.
Brooke Summerhill (02:03.014)
So typically, you go to a lawyer . You’re about to get divorced and it was blindsided in your face. my god, what is going on? He wants to get divorced or she wants to get divorced. Doesn’t matter who you are, heterosexual couple or not. It does not matter.
You might not know where the finances are, right? And you’re going to a lawyer. You expect them to help you out, but you don’t even know where the assets are. You don’t know it’s on the balance sheet. So the first step is breathing.
Let’s not get into this sympathetic nervous system. No fight or flight, freeze, thaw, and let’s not go there if we can’t avoid it. And really just breathe and understand it’s going to be OK.
That’s the first thing I want to just point out is you can do the work on yourself without having to do hard interval training. You can just breathe. So you’re going to breathe and understand, OK, the balance sheet. I can figure this out. You got it.
And you might need to hire someone like myself who’s a certified divorce financial analyst, you might have your lawyer help you. You might ask your soon to be ex if they’re willing and amicable to understand the balance sheet. You might go to a financial advisor, wealth manager, your family office and ask some questions.
So this is a time of learning and it’s okay that you don’t know where everything is. And the balance sheet is terrifying for most people. 98 % of us have money anxiety. It’s okay. Breathe.
Get help and support where you can. The foundation is the balance sheet. If this is the only thing you take from today, is just breathe and know that the foundation is your budget, your expenses, what’s coming in, what’s going out.
Can you figure that out? Even though you might not know where your assets are. Do you have Bitcoin? Or have different properties? Do you even know if there’s liens, mortgages, loans on them? That all will get figured out. But you’ve got to know what you’re spending.
I would say, you tell me if you have a different experience. But most clients do not know their budget. And that’s OK. Doesn’t matter your wealth, income, anything. Most people, at least in America, do not know what they spend every month.
So that’s the foundation is to start theirs. Understand, what are you spending? Just keep a little log. It can be old fashioned. And I have plenty of technological apps that can help with this. But keep it old fashioned. Just write down, what are you spending? And keep that for a week.
Brooke Summerhill (04:28.752)
That can help you in your divorce process and remember to breathe. There you go.
Frazer Rice (04:32.91)
And it’s part of my process, I think, is to just understand what you’re spending. And then the next step is really understand where it comes from to help support that spending. It’s like analyzing someone who earned 100 million dollars from this movie. It’s like, OK, that’s the headline. Now it’s a lot different in reality. Certainly taxes, how it’s paid to you.
We’ll get into this in a second, and sometimes it’s not in cash.
Sometimes it’s in different types of assets. Whether it’s stock or maybe you own homes, and it may not be necessarily liquid right up front. It sounds like we’re parking our cars in the same garage on that front.
Brooke Summerhill (05:19.154)
Absolutely, absolutely agree with you.
Frazer Rice (05:22.114)
So maybe let’s go through some of the complex assets that you think about that come up in any, not all divorce situations, but definitely in many of them. Many times people have grown their wealth through a private business. so even, you know, the number that is settled upon in the divorce settlement may not be readily available from a cash payout perspective. How do you take people through that?
Brooke Summerhill (05:47.473)
Oof. So I have an entire chapter on businesses because majority of my clients, I’m going to be very sexist here and say majority of my clients, husbands in a heterosexual relationship do own a business or have just been bought out of a business or are starting a startup or have something behind the scenes that they’re aware of or maybe not even aware of. So businesses are huge thing. That’s why I put a chunk of it in my book because
The biggest advice I can give is hire, I’m going to be a repetitive throughout this whole podcast today is hire the right professionals if you can, because you don’t know what you don’t know and that’s okay. You’re going to breathe through that and acknowledge you don’t have to be an expert in divorce. But when you have a business reading, listening to podcasts, doing all of those exercises are wonderful and hiring an expert.
So getting someone who’s understanding the finances in a divorce specifically, so business valuator, or just having a consultation. That’s enough to understand, this, I need a forensic accountant, because I don’t know anything that’s going on within this part of the businesses that I’m a part of, but I’m not really a part of, or I need a business valuator. Let’s just have a consultation. It could be really a non serious, non threatening, non emotional way to start it.
I’m just going to have a consultation to understand, do I need this business valuator? I would just at least have those conversations to understand more about your husband’s business or your business in general on what are the numbers behind it? Because it is very complex, just as you’re saying. Businesses, absolutely, you want the right experts involved.
Frazer Rice (07:30.506)
And sort of as a broader business, or not really business, but sort of as a broader sort of contextual situation here, the type of wealth, whether it’s private funds, people who are invested in private equity or hedge funds or stock options or RSUs for people who are in the tech world, things that are held in trust, there’s the concept of carried interest and real estate and concentrated stock.
This is to go back to your comment that there are people out there that can help you. Understand those assets, I guess for lack of better word, can and can’t do. As far as either provide cash flow or are easily divisible in a divorce settlement. Does that square with your thinking on that?
Brooke Summerhill (08:13.522)
Absolutely. And my role is to really divide assets in a creative way that benefits both parties. They can move on, clean the slate, know, not have fights for years to come. So when you talk about dividing assets, that is spot on. Get the right professionals involved, understand your options and the scenarios, and then you can drive the car with control off the right highway scenario, or you can continue down that highway to another off ramp.
If that suits you in that creative solution of dividing the assets with complex assets like RSUs. And RSUs, restricted stock units, we can go into some of these definitions that are complex, or we can just say, reach out to us if you have questions on what is RSU or what is stock option, or what is these terminology things that you guys are saying. Because it’s very complex and scary, but it doesn’t have to be if you get the right professionals involved, understanding your options.
Frazer Rice (09:07.564)
So let’s pull back a second in terms of assembling your team. If you’re going, you’ve been side swiped by sort of potential for divorce, you’ve hired a divorce lawyer probably right off the bat. But that you really, in my opinion, you need more than that. We talked about the financial advisor to help you work through what’s owned and how it’s owned and what cashflow it can throw off and whether it can support you or not.
I would argue that this is a good time to reengage a trust and estates planner because when you go through a situation, know, divorce situation, the things that you have in place don’t necessarily apply in the same force that they did before and definitely need a look.
Your accountant, of course, if you don’t have one, it’s probably worth it to get started thinking about that because how you receive assets are gonna be important and how you pay taxes on them.
You’re gonna be on your own going forward. And so it’s gonna be important to understand those ramifications. What other people do you have in your cabinet there?
Brooke Summerhill (10:10.547)
Okay, so if we’re on a yacht and we have crew members, we have to have a few of them like you mentioned. I would say nowadays, if we go into the differences of litigation versus arbitration versus mediation versus collaborative divorce, there’s different types of lawyers that we would hire.
So we can go into that, but we’ll just say, you’re gonna hire the right attorney for you to help you with the divorce process, understand the law, and it’s not going to look the same for everyone because you might not need someone who’s going to litigate and really be your advocate every second when you can hire a mediator that can help you both get creative and neutral setting wise, get you divorced faster potentially. You hire the right divorce arena lawyer, advocate or mediator, someone in that nature.
And then yes, you absolutely need the accountant, CPA, tax attorney, sometimes the complex assets require hiring some consultants within the tax arena to understand what the private equity actually means within the contracts because they don’t even understand it. It can be very convoluted. So hiring the right teams with a tax standpoint is very important within the state that you are in or that business is in. That’s just another arena. The other crew member you want in a lot of
Frazer Rice (11:16.046)
Definitely.
Brooke Summerhill (11:36.691)
times I’m the one who’s bringing them in is absolutely trust the states. You might need a whole team and a crew around that because if you have dynasty stress that you didn’t even know you were signing off on for your children, you know, five to 10 years ago, you need someone to understand what that means. Or if you have an estate plan that is in the midst of there’s a lot of creative solutions here that you need the right team members. So trust in the states, like you said, big, big, big deal. Then we have therapists.
Frazer Rice (12:05.454)
No, I was just going to dive in and say dramatic foreshadowing talking about the emotional component of this. so divorce is a dramatic situation. To me, being a good user of professional services is using the right person for the right situation. I’ve gone through it and had friends go through it. I’ve had clients go through it where
Brooke Summerhill (12:06.792)
Go on.
Frazer Rice (12:27.212)
Sometimes they go through and they use the divorce attorney as their therapist and that’s an expensive and not very productive way to do that. Whereas having a therapist in your crew and using that person who’s trained for that and can get you from here to there in that journey of recovery.
It’s an important part and one that shouldn’t be neglected, especially when you’re facing… maximum stress legally and maximum stress emotionally and if you’re trying to sort of manage the firehose of information in order to make good decisions.
Brooke Summerhill (13:03.731)
Absolutely. Well said. I agree. So therapist is a tool. Parenting coaches, I utilize that a lot of the times. I’m a divorce mediator, but I don’t like to practice it because I like to stay in my financial analyst realm and helping women on that end. And so I’ll bring in, you know, divorce coach and a parenting coordinator.
So there’s a lot of little rules that you don’t think about that might be necessary to help a mediator, to help your divorce attorney and you, as the client understand what’s best for you, your children and your emotional setting during this financial whirlwind. And you mentioned financial advisor. I’m going to just put a little caveat there. It cannot just be a general financial advisor.
There’s tens of thousands of those all over the United States. I absolutely have a bias here, but it has to be someone who is specialized in divorce and someone who understands complex assets.
You cannot go with someone who is non-experience in the higher to ultra high net worth realm because they will not grasp what you need as quickly or as efficiently as someone who’s done this for years in that bracket. It’s definitely something that I like to point out all the time.
Frazer Rice (14:19.245)
No, and it’s absolutely just such truth right there because the assets are complex, the machinery around it can be complex and whether you can or can’t do things, you have to understand that quickly.
The tax ramifications of even dividing assets can be net less to everyone involved. And so we’re going to talk about modeling settlements in a second.
But then the other thing I tell people is that sometimes people walk into these situations having done trust in the state’s planning in conjunction with theoretical asset protection planning, maybe in lieu of a prenup or something like that.
And that’s not necessarily a sure thing. Family law is such that judges can take a look at certain situations and say, hey, you know what, this isn’t equitable. We’re going to go in a different direction here and you may owe it anyway. And so to have that
I hate the word holistic, but I’m going to use it here. The broader view of not only how the numbers work, but how it relates to the different legal and structural things in place. It’s vital to have, especially at the numbers that we’re used to talking about, because those mistakes, even unintentional ones, can be really expensive.
Brooke Summerhill (15:29.523)
expensive is the word there. It could be extremely, extremely devastating to not only you, but in the future, your children are going to most likely be part of that legacy or your philanthropic endeavors.
And if you’re making mistakes, even with your team unintentionally hiring the wrong people that don’t understand the complexities or the tax ramifications, that’s devastating for not only you, but yeah, yours to come and your family and charitable giving.
Frazer Rice (15:57.071)
So once we compartmentalize, it seems to be an important thing here. You have to be able to sort of put different things in different boxes as you step into the different components of settlement that are in place here. So let’s say you’ve got the emotional part kind of addressed in the sense that you’re working on those issues that you need to work on to come out the other side. You’ve got your team together from attacks and legal and trust in the states and divorce settlement.
Now, to me, is the notion where you have to step in and say, OK, this is now becoming a bit of a business arrangement where you have to model a settlement that is going to work for you and it’s going to work for your soon to be ex-spouse so that, as you say, you can move on rapidly, but in an orderly fashion. So you come out the other side and have something that’s workable so you can move on in both of your situations.
from the modeling settlement part of it, how much do you go into that cashflow planning, knowing what you cost and making sure that those things are funded so that you can enjoy your life going forward?
Brooke Summerhill (17:03.271)
Think that is the foundation of the house. think that again, I have a bias coming into it, seeing what can happen when it goes wrong and I’m coming in after the divorce and helping with money coaching. really is devastating to see, wow, you took this, this, this, this, and they didn’t model what would happen with your cashflow if you didn’t take this, this, this. It’s devastating.
Why I do what I do is really to be that precursor to look at those options before you make decisions. And there’s others that do what I do, you know, as a certified divorce financial analyst, we model out scenarios with the cash flow. So you have to understand your expenses and income and what’s going to be coming in and out basically. And that’s okay. Again, you are like most people and you don’t know what it is.
You can hire someone to help you through that and really work on it in a very easy and manageable step-by-step manner, where once you understand what you’re spending and what you need to live off of, then you can model out those cashflow scenarios with the different assets coming through.
And the software that I utilize makes it really easy and more fun and crisp and clean. Calculations are not hard. We’re not doing it by an Excel sheet, managing it every second for hours. It’s just, let’s look at this scenario for five minutes. And then
Frazer Rice (18:21.423)
you
Brooke Summerhill (18:26.939)
Again, let’s go off the highway. You’re steering the car. You have the foot on the gas. You tell me your values. And client, let’s go see if this highway will match. Let’s look in my software and see. Will it match your values if we took this scenario versus this other scenario? So she, for me, it’s a she.
She’s getting to make those decisions. But I’m there in the passenger seat making sure. You’re not going to come to someone in six months to a year and be devastated because you don’t have the cash flow. You’re going to take the right settlement.
Or present it to your student to be X, where it’s best for both of you. You both can move on and not fight in court year after year. Because you didn’t get what you deserved, right? That’s resentment building. We don’t need emotions in it if we can make it part of the business thinking process.
Frazer Rice (19:12.751)
No, and it’s important to underscore the difference between owning assets versus generating cash flow. You can be wealthy on paper, but if you’re having trouble getting the tuition payments made. Or if that hasn’t been discussed as to where certain financial requirements are being taken care of either at one spouse level or the other, that’s when you end up tripping over things that might have been dealt with with a little bit more organized approach going forward.
Brooke Summerhill (19:44.787)
Absolutely, hire the right team members to help you through that. Because if you’re listening right now and your anxiety is spiking a little bit. Because you’re like, my gosh, I don’t know, I don’t know, I don’t know, it’s okay, breathe. This is all you need to hear is hire someone or at least consult with some people in this divorce world and you’ll get through it.
Frazer Rice (20:04.719)
So the part that I know least about, I don’t have kids. from a parenting and support component, I can sort of look from afar and have an opinion on it. But it’s quite a bit different when you have your own kids and you’re making sure that they’re taken care of, that their five, 10, 20 year plans are squared away going forward.
The emotional component of shared parenting, the establishing a schedule post divorce, those types of things which seem obvious in some ways but aren’t because suddenly you and your soon to be ex-spouse are going to be having different schedules and different priorities, etc. How do you take your clients through that?
Brooke Summerhill (20:46.653)
OK, great question. That’s a whole chapter in the book as well, children. And that is a difficult journey for most clients right at the start. And it gets easier. So if you’re listening to this and you’re just thinking of divorce.Oor you are just hit with papers and you are about to go through a divorce, or you’re in the middle of it and you still feel like it’s crunchy and it’s really difficult and you’re walking through mud in a way, it gets easier. It really does.
The first step is again, you can hire the right professionals. So hire a therapist for yourself. And it’s better than just friends and family because friends and family might fuel the fire. That is a mistake that I see a lot of men and women make as they divorce. So hiring a therapist for yourself, then parents and coaches, parenting coordinators, those who can really understand where you’re at and level with you to make those decisions or hiring the right mediator or divorce attorney.
Work specifically with those who have children because it gets way more complex with children, especially when you have bigger assets, then you need to understand what’s going to happen with the cash flow for schooling. mean, private schools, let’s just say you have two, three children, you’re going to have hundreds of thousands going out a year for just schooling, curricular, extracurricular activities, right? And things like that, you need to prepare who’s paying for that.
And it’s non-emotional, but it is very emotional, right? So we want to say it’s non-emotional, but it is absolutely going to be in preparation, hiring the right professionals around you, and knowing it will get easier. Because when we look at this from a standpoint of, OK, how do we talk about with our children? How do we work through this, our scheduling? All these things can be a lot easier and simplified if you have the right professionals guiding you on that path.
Frazer Rice (22:34.211)
One of the things I liked about your book is that even if you’re not getting a divorce, I think a lot of the things that you have in place are very useful in terms of a spouse who knows less about the financial situation.
This book in many ways brings, in my opinion, kind of a good framework from which to discuss things and how to ask questions.
There’s another book I just read which I like called MONEY TOGETHER by Doug and Heather Bonaparte and so this one I’m going to recommend pairs extremely well with that in terms of building, just really building a knowledge base. For those who aren’t in DEFCON 5 and are facing a divorce and so on and they’re able to maybe get to you ahead of time to say, you know what, everything’s good. But I don’t feel comfortable.
How do you talk to those types of people?
Brooke Summerhill (23:31.44)
My favorite part of the role is if we can be preventative because if we get in at the right time in our thought process of thinking maybe about divorce, most likely you could shift your mindset and understand more about the finances and gain confidence and clarity and then that control can just whirlwind into, I know my options and I want to stay married.
Like I’m happy in this. really uncovering and discovering what your values are around money and yourself, understanding your own memories around money and how you deal with money. So your money scripts as, okay, how did you deal with money as a child? That’s some of the questions I go into is, okay, and are those still popping up right now?
Have you seen some patterns and behaviors around money as a kid and as a teenager and as a young adult that are still affecting you now? And do we want to shift some of those behaviors and patterns so that you can stay in this relationship?
And also we want to uncover the finances in a way of, let’s be open and understand. Maybe we bring in your spouse to these conversations so we have an open conversation about where the money is, how you’re going to be living the next few years with your values.
Together you guys can build that relationship. Because most of the time, one of the person in the relationship does not want to deal with the money, or they’re scared of the money, or there’s some kind of script around money that’s scary. And so they put their head in the sand, or they turn out the light and they don’t deal with it. The other person is more in control of the money, right?
That person is making the money or dealing with the finances. So if we can bring them together during marriage, when they’re thinking of divorce or before that, that’s the best part. And then they can see they’re gonna be okay as long as they both understand it and have the support.
Frazer Rice (25:17.327)
As we wind down here, we’ve gone from divorce during marriage and now before marriage. Preenups, I in general, if the discussion can happen, I like the idea of having them. And I think frankly, it accelerates good discussion ahead of time anyway and helps get that information to both spouses. And as you say, give them confidence within the relationship. That’s such a great, I like that narrative a lot. What’s your predisposition there?
Brooke Summerhill (25:48.308)
There’s so much stigma around having a prenup. There’s so much stigma. There’s so much potential though in my mind in a positive light of having these tough, scary financial conversations. If you have a prenup or if you’re thinking about a prenup, if you guys can be open around the finances, how can you not both benefit from that? Talking with a lawyer or with someone in the financial realm with the lawyer paired in a room, having these really, really intense conversations.
And I say intense because it’s about money and that’s usually intense at the beginning and then it gets easier. If you can do that, how are you not gonna be set up for success? And you’re gonna most likely be well prepared for that marriage and stay married. I wish there was some research I could say, like this is the statistic. If you have a prenup and you actually, you didn’t just do the prenup because your parents are the wealthy ones and you wanna keep the money in the family.
It was for the right reasons of I wanna understand my asseets. I want you to understand your assets, I want to understand that we’re in a marriage because we love each other. Here’s the financial ramifications of this and that. And you guys have open conversations well before marriage conversation, like not the day before the marriage, right? And have it be an open dialogue with professionals. I think that’s a wonderful way to keep you both in this beautiful marriage for long term, where it’s healthy. That’s I agree with you having a prenup and that’s in my book too is
Frazer Rice (26:59.907)
Got it.
Brooke Summerhill (27:14.621)
Preenups can be a very, very positive tool. And in divorce, on the other side, understanding what you signed before you get divorced, or if you are thinking of divorce, understanding and going to the right lawyer, maybe the one who drafted it, who you trust, is a very good idea, too. Beware, they will most likely have to talk to both of you. you guys, long story short, go to the right attorney, make sure if it’s a neutral person that you both worked with, which is rare.
That should be a red flag. But if you both worked with the attorney, you both are in the room understanding the prenup before you get divorced so that you understand the ramifications of what you chose to do and what you chose to sign. So divorce, you need to know the prenup. But before you get married, get a prenup and have those really tough, scary conversations upfront.
Frazer Rice (28:01.871)
Terrific. Brooke, so glad we got to catch up again. What is the best way for people to find your book and otherwise find you?
Brooke Summerhill (28:10.887)
You know, I think nowadays Amazon is really an easy target to type in right there. Divorce for the Wealthy Woman is my book. And my phone number is in the book. My email is in the book. I’m very open. People have questions, conversations to be had. I’m right there for you. So they can reach out on my website. Just type in Brooke Summerhill. You’ll find me or buy the book online and learn something new.
Frazer Rice (28:36.111) – Divorce for the Wealthy Woman
All of that will be in the show notes. Great stuff, Brooke. Thanks for being on.
Brooke Summerhill (28:40.519) – Divorce for the Wealthy Woman
Thank you for having me.
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