4: Divorce & Finances – How to Protect Your Future with Sharon Clark, CFDS

Transcript

Speaker: A CFDS has completed specialized training in financial matters relating to separation and divorce through the Academy of Financial Divorce Specialists.

Speaker: It's a bit like having a 5,000-piece jigsaw puzzle with no picture and some of the pieces missing. And it's a really good thing that I like puzzles.

Speaker: Hey there, my name's Annabelle, your host, dog mom, musical theater lover, life enthusiast, and practicing family law lawyer. But most importantly, fellow traveler on this wild, beautiful journey we call life.

Speaker: And it's a real pleasure to meet you. I'm a Cheshire girl who swapped the rolling hills of England for the stunning Okanagan Valley. I earned my undergraduate degree in psychology from UBC Okanagan, but my path was always leading to law.

Speaker: So I packed my bags, headed off to Scotland, where I tackled law school at the University of Edinburgh and earned my LLB with distinction. Because who doesn't love a bit of a challenge, right?

Speaker: Well, now I'm back in Canada, living on the gorgeous West Coast in Victoria, British Columbia, and I am in the thick of my career as a family lawyer. My goal? To build a safe space where I can help you navigate the tough challenges that come with separation and divorce, and empower you to turn this challenge into an opportunity to rebuild, rebrand, and refocus your future.

Speaker: Welcome to That Was So Real, where my goal becomes reality. This podcast is your safe space. I believe that obtaining your legal separation is only the beginning of your new journey.

Speaker: And I'm here to save you time and connect you with the resources you need to move forward stronger and better than ever. Think of this as your guide to creating a life you'll love, whether you're still in the midst of your family law journey or already embracing your new chapter.

Speaker: Hi everybody! Thank you for tuning back into That Was So Real. Today I am joined by the lovely Sharon Clark, someone who brings not only a wealth of professional expertise but also a whole lot of heart to the work she does.

Speaker: Sharon is an accredited, chartered professional accountant with over 30 years of experience under her belt. working in everything from public practice as both a partner or manager to senior financial roles in industry and government entities.

Speaker: But she has made a big pivot, moving away from traditional accounting work to focus on helping people navigate the financial side of separation and divorce. She's now a Chartered Financial Divorce Specialist, which means she's got the specialized training and financial savvy to support clients through one of the toughest transitions in life.

Speaker: She's also in the process of completing the training to join the Victoria Collaborative Family Separation Professionals, a team of counselors, financial experts, and lawyers who take a team-based, collaborative approach to family separation.

Speaker: Sharon is originally from England, and yes, she still has the accent and a fabulous sense of British humour. And after qualifying as a chartered accountant in the UK, she had a brief stint with the Serious Fraud Squad in London.

Speaker: Yes, that's a real thing. Where she first discovered her love for forensic accounting. from there she headed to dubai where she lived and worked for over fifteen years before eventually settling in beautiful british columbia in two thousand and six on top of all that sharon's a passionate community advocate She's been an active member and former committee member of 100 Plus Women Who Care Victoria for eight years.

Speaker: A dedicated group of women who have raised over $800,000 for local charities. She's also nominated and spoken on behalf of organizations close to her heart like Need To Suicide Prevention and the BC Cancer Foundation.

Speaker: I am thrilled to have Sharon join us on the show, and I'm so excited for you to hear what she has in store for us today. So let's get into it.

Speaker: Hi Sharon, welcome to That Was So Real. I'm so pleased you could join us as the very first guest to talk about one of the most important considerations for every family going through ah relationship breakdown, which of course is the division of assets and debts and overall management of finances when you know one household becomes two.

Speaker: So thank you so much for being here. Yeah, you're welcome. Good morning, Annabelle. and And thank you for the invitation to this podcast. I'm grateful for the opportunity to spread the word of what I do and how I can help individuals, their lawyers and other professionals through this really difficult process of separation divorce.

Speaker: Oh, thank you. Yeah, it's going to be so helpful for people to understand a bit more about this role. And of course, you're here to speak about your role as a chartered financial divorce specialist.

Speaker: So we're going to get well and truly into the details of what you do and how you will help people very shortly. And first, I wanted to say I'm also excited to have a fellow Brit on the show. I was laughing to myself this morning thinking about how much more British I sound when I'm talking to UK friends and family, I think.

Speaker: We've discussed this before. So I imagine I'll have the same kind of new accent today and be surprising people. i sound like I just got here. You sound very plummy. and i do i Yeah. Yeah. But yeah, so let's I mean, I've introduced you to our audience already. But why don't you tell us a little bit about you and and kind of what brought you here?

Speaker: Well, I am a fellow Brit. You know, i trained as a chartered accountant in the UK and I left ah in, you know, when I was 25 and I lived in Dubai for 15 years, well which gave me a lot of, you know, a lot of insight into relationships and and dealing with all sorts of different nationalities.

Speaker: then, and then You know, in 2006, I came with my family to beautiful Victoria. And, you know, I spent time consulting.

Speaker: you know, I've gone into public practice again. um and I've been in, you know, some government ah positions. But I came involved being a CFDS and and and in the the process of divorce and separation quite by accident, really.

Speaker: A dear friend who was going through a divorce ah called me and said she'd received a whole bunch of financial information from the opposing party, couldn't make his or tail of it.

Speaker: Could I help? And when I went through my own divorce, I realized I had the advantage of the financial you know background and I had access to financial aid information.

Speaker: And then I realized I could help other people out there going through this really painful process. So that's when a tiny nugget of an idea started forming.

Speaker: So I invited my divorce lawyer, the venerable Trudy Brown, um who to meet me for lunch and ask for her opinion. And she said to me,

Speaker: I think that's a very good idea. And then proceeded to invite me to crash the monthly Brown Henderson Melby meeting to meet all the partners. And I decided then and there, this is what I wanted you to do for the rest of my career.

Speaker: So gained the CFDS qualification and... Here I am. And here you are. Wow, that's so great. I mean, what a story to kind of take something that you personally went through and and find a seed of inspiration and then take it to where you are now. That's really inspirational.

Speaker: That's great. i I think there's a lot of people in this profession, at your profession, that deal with separation of voice that that that have a story. the hell yeah And I'm just another one one one of them. Yeah.

Speaker: That's great. Well, so CFDS, Chartered Financial Divorce Specialist. What is a Chartered Financial Divorce Specialist? Okay, I'm going to call it a CFDS but because call it of yeah it's ah a real tongue twister.

Speaker: So in a nutshell, a CFDS is a financial professional, which in my case is a Chartered Professional Accountant or CPA, which I've been, you know, for over 30 years, both in and out of public practice.

Speaker: A CFDS has completed specialized training in financial matters relating to separation and divorce through the Academy of Financial Divorce Specialists.

Speaker: The very nature of the CFDS qualification is that we are a true neutral party, which is different ah to the traditional adversarial role of a family lawyer.

Speaker: right And neutrality does mean that we can work for both clients and is particularly effective in mediation proceedings or in the collaborative process.

Speaker: And I'm going to circle ah back to the collaborative process in in a little while. Okay, great. yeah i work closely with family lawyers during separation and divorce process, but i'm I'm really careful to tell my clients that we're not lawyers.

Speaker: We can't provide legal advice. And clients will hear me say a lot, you know you need to discuss that with your family lawyer. you know This needs to be reviewed by your family lawyer.

Speaker: So rather than giving advice, CFDS provides the financial information to help separating parties to making informed decisions.

Speaker: And we can look at the long-term effects of of a settlement. You know you can have a bit of paper that looks okay at the time, but how do you know what's gonna happen you know when you retire or whatever, and unless you you can look for further forward?

Speaker: You know, in practice, particularly when clients come to me before that they see their family lawyer, ah you know, I would summarize key financial issues and and what I think is potential legal issues that the client needs to work ah with the lawyer on.

Speaker: So in my role as a CFDS, I think my main objective is to level the financial playing playing field. What does that mean? ah Typically, you know, there is one party who's dealt with the finances during relationship.

Speaker: And often I see the other separating party is at a considerable disadvantage when they in both knowledge and access to financial information when they go through separation divorce.

Speaker: And in some cases, you know, there can also be a level of financial abuse. And I'd just like to touch on that subject a little by explaining what financial abuse is, because it's not always recognized.

Speaker: Financial abuse is recognized form of domestic abuse and is defined as taking control of another person's finances and so without their permission.

Speaker: ah Financial abuse can occur in a variety of ways, from spending family funds to withholding access to funds to coercing that other party into debt.

Speaker: And I think it's super important for all professionals during the separation of process to be aware if that behavior does exist. So how can I help? Well, I can help clients gain access to financial information and in ensure that they completely understand the financial matters you know during the process.

Speaker: As I said before, the advantage that we have is i can work with both parties. So there is, by very nature, financial transparency.

Speaker: Both parties have access to exactly the same financial information. And I may work more with one party rather than the other. to explain clearly the financial issues and to ensure both parties are going into the process on an equal footing, financial footing, you know, as possible.

Speaker: I'm also a member of the Victoria Collaborative Family Separation Professionals, which is a bit of a mouthful, which is an independent group of professionals who have all been collaboratively trained, which means all of them have specific training, such as mediation or conflict resolution for working in the collaborative process. And, you know, I just want to be able to touch on what the collaborative process means because clients often don't know about the process or understand what's involved.

Speaker: Collaborative family law is a process in which parties, their lawyers, a financial professional, and other professionals such as divorce coasts ah coach, a counselor, psychology, social worker, or a chartered business evaluator who are part of the collaborative team, agree in writing to work together to create agreements that resolve issues outside of the party's separation.

Speaker: And here's the important thing. no one will go to court or use threats of court. The client, the collaborative team professionals all sign what's called a so participation agreement, agreeing amongst other things is not go to court.

Speaker: So instead, you know, we work to create solutions that address the values and goals of both parties and their children with the sole objective of reaching an efficient,

Speaker: fair and comprehensive settlements of issues. And it can be a really effective process in dealing with conflict resolution. I'd like to say more about it, but perhaps we can visit that another time, Annabelle, and move on to the next question. Yeah, I mean, well, just so much to consider in in your answer, but the things that are jumping out to me are, yeah, the addressing the we call family violence concern, which yeah includes you know, coercive control and things like that to do with finances, right? And it can look as obvious as someone who doesn't have access to any of the the family's bank account account statements or anything like that and has just handed a credit card to work with and that's all they get to see.

Speaker: Or it can be... yeah Yeah, or it can be as not as obvious and there just be a lack of sharing of information, yeah which doesn't always necessarily mean that there's um control, but certainly there's a lack of clarity about what's actually in the family pot to be divided, you know, whether that be assets or debts.

Speaker: And it can be quite shocking when people finally receive disclosure of the other party's bank statements and in this process and go, holy cow, there's all this debt or there's there's all this money that I had no idea about.

Speaker: And it can be yeah quite overwhelming. So and I imagine, yeah, we probably don't have time to go through the whole collaborative. We call it collaborative with a capital c Because of course we all aim to be collaborative people, but collaboratively the collaborative law group, the trained um persons and professionals in that group, that is is great because when something like that happens and there's a shock, there's other professionals in position to kind of help like the, you know, counselors yeah and such like, right? I think that's how it kind of works.

Speaker: Yeah, and and you know i find some of the results of working with, especially both people or working through the processes that work, is that you know one side gets empowered.

Speaker: but you know and I involved them in the conversation I involved them in sometimes the work especially if it's sort of forensic accounting type work and you know I had one client that you know was bursting into tears at every you know every time she saw me and then suddenly she wasn't right and suddenly she was like I can do this I can go and see the bank I can go and do this on my own and That's an incredible perk of this this this job is that you can do that. And i it's it's a great thing.

Speaker: Wow, that's great. Yeah. I mean, just giving everyone the ability to be, to feel like they're an equal party in the separation, even if they weren't in the relationship, right? Just bringing people back in.

Speaker: And these are skills that ah presumably people can take onwards, you know, going forward and think, okay, I maybe didn't have a great handle on it this time around, but next time around, I have some skills. I know how to track my finances. I know how to look at investments and how pensions work going, you know, how to look at pensions and things like that. So very, very cool.

Speaker: so I understand now what the what the role is. But if I'm coming to you as a client thinking, I know my lawyer said to me, you need to put together your quote financial statement.

Speaker: And I have no idea what's going on. um And I would come to you and say, Sharon, help me out. So what what can you do? How does that look? OK, so you know, some separating parties do come to me first.

Speaker: you know, either individually or together. ah And they want to go as far as they can in the financial, with a financial professional before hiring a lawyer. So we can do or a lawyer may hire me directly or say to the client, you need to hire a Sharon.

Speaker: um You know, if there's specific things, you know, why do you need to see FDS? And, you know, I do get asked, well, why can't we use our normal financial, you know, accountant that does our tax? and And the answer is,

Speaker: Well, because we have specialized training. We have to be familiar with the federal child support guidelines and the spouse and support of advisory guidelines and, you know, and specific taxation issues that do only arise on separation, divorce and, you know, the division of assets. So and and and what do we give?

Speaker: So in general terms, you know, CFDS, can provide the assurance to two lawyers and their clients that financial facts, including taxation, are now and not analyzed by an objective professional, financial professional with specific training.

Speaker: and And we are... We're needed for financial matters that require a more in-depth review. If there's specific taxation issues or complicated calculations, you know, where there's a business involved, which could be, you know, a sole proprietor, a partnership or a corporation, you know, that's that's a whole different area of of of, you know, we look at is there profit in the company that is not being taken out that could be guideline income.

Speaker: And also, you know, when there's a more in-depth litigation, forensic type accounting, you know, work is needed. i will circle back that one too as well.

Speaker: So, but, you know, i would be hired if A lawyer goes, OK, we've got ah an offer on the table. What does that mean long term? And to see the effect of any settlement offer going forward is is really powerful because what looks good on a piece of paper, um you know, if we do financial projections, which include, you know, taxation and inflation, then we can go, doesn't work.

Speaker: you're going to be out of money. And I think that type of work can be very impactful as to getting rid of some of the stumbling blocks that that prevent clients sort of from reaching a settlement.

Speaker: And one of those you know can be, you know, I want to keep the house. Yeah, going to say, that seems like a perfect example when someone... It does. And, you know, I had one lawyer who, you know, said to a client that you need to hire Sharon.

Speaker: And there was an offer on the table. And the lawyer was saying, you know, you're and entitled to more. and And she was saying, no, no, nope no, we can't do that. So, you know, what I did was prepare financial projections going forward.

Speaker: So scenario one was, this is the offer on the table. This is what's going to happen when you retire. And two, three, four, and five were increments adding to that settlement offer.

Speaker: And just a simple table, side by side, all the financial effects on cash flow, you know after tax cash flow. And it showed almost immediately that she was going to be in financial trouble with the current offer. And so it seems an an odd way to to hire someone, but it did persuade a look.

Speaker: There's a lawyer saying, I think you're en entitled to more. And I'm saying, you should have more if you can, because you're going to be in trouble. And I think that was really impactful. And sometimes lawyers are just busy and they want to outsource certain work to us, you know.

Speaker: and know nothing about that. You know, and and I think especially, you know, I've had one lawyer say, hey you know, I can't even see clients for another six weeks.

Speaker: And I said to her at lunch, I said, well, you know, just throw them at me. You I can help them, you know, collect those those documents, which always takes a long time anyway. yeah And um i can I can do a draft F8 and F4 financial statements, which are legal documents.

Speaker: You know, I can i can do a guideline income. I can do, a you know, a division of assets, the net family property statement. and And then sort of throw it back at them for their review. Everything has on it.

Speaker: to be reviewed by your lawyer. And, you know, then the lawyer gets something that hopefully they like. So it's a sort of win-win all around. And i may be required to be a financial neutral ah in mediation, or as we've mentioned before, the collaborative process. Or the other time is if clients are going to court, and I've done say some litigation support work or forensic accounting type work, you know, they might need a, you know, financial expert in court.

Speaker: So that's kind of who needs me. Yeah, in a nutshell. Yeah, yeah. I mean, it's it's great because That example you used with the house, I see that a lot where people, they they they're willing to give away anything to keep the house, right? They're willing to make their right to pensions or, you know, have a buyout of a pension. And on paper, it looks great because they got the house, right? They don't have to get a big mortgage to keep the house.

Speaker: But having the ability to look forward and see that actually, you know, the house is maybe going appreciate a little bit, but what you have in interest in investments or in pensions or things like that are going to be pivotal for retirement, pivotal for being, having a healthy financial future. yeah And it's really valuable to have, you know, scenarios one, two, and three to see how that can all play out.

Speaker: Yeah, it's it's a real eye opener. And, you know, you know, I've had one lawyer say, well, you know, can it do? Okay, what would happen if if I keep the house?

Speaker: Or alternatively, we sell the house? And what would happen? You know, if I take half of the pension that was accrued during the the relationship? So, you know, i think that's a common question. Lawyers here. And, you know, i you know, I do think it's it can be very powerful.

Speaker: Yeah. And I mean, you mentioned financial statements just um yeah to kind of tap into that. I mean, one of the first things I do with clients is say, hey, we need to gather all of this financial information. So we need tax returns. We need notices of assessment.

Speaker: We need bank statements. We need financial statements for the business. And I don't blame anyone for not knowing what the heck I'm asking for in these scenarios. yeah It's like, oh, oh but that document that that I get from the CRA when I filed my taxes. I don't know. I threw it in a drawer somewhere.

Speaker: But, you know, we need to gather all this stuff. So I think having person who can assist even that early on in the process, even just yeah going through how to gather and find all those documents, um especially if you're not someone who's had a mind for those things in the past is really helpful.

Speaker: And that comes up often. So the preparation of financial statements. and then the other thing you mentioned, guideline income. So yeah talking about Child support, right? Spousal support and what someone makes.

Speaker: And you know if if there's a business and one person's involved, one person isn't, sometimes the person not involved has no idea whether there's money being held in the business, what the business value is.

Speaker: and what that person's actually making because people can hide money in their business or keep money in their business and not pay it to themselves and there's always a concern about people hiding income not always but there's often a concern so I imagine the forensic accounting piece is that kind of tie into that yeah I mean it it does um you know I I often I mean, i it's amazing how many partners actually do what what's going on in the business. um So one of the things I do is listen hard because they can often give me directions. Well, he's putting all personal expenses through the business.

Speaker: So that's lowering the income that's available for guideline income. And so we have to delve into that. You know, there ah there are adjustments ah and ah things that are perfectly valid.

Speaker: as per the in income tax when they do their tax return, but they're not deductible in terms of the child support guidelines. Like, you know, business use of home, ah you know, ah in in in in general, you know, they look at, well, if you were going to pay that money anyway, regardless of whether you had a business or not, you know, and it's got to be reasonable.

Speaker: So, you know, there are a lot of clauses that we have to know really well to be able to go through, you know, and um and we have things like, well, okay, there is that much in net profit or retained earnings or or whatever, but do they need operating capital?

Speaker: You know, working capital just just to, and and that needs to be looked at. So there's so much that needs to be looked at, but often I do find that women have been the bookkeeper at some point.

Speaker: Yeah. they no Or they know the bookkeeper well. yeah yeah they And they can be a key source of information. And I've had you know clients who, you know, just get empowered by that and they become super sleuths.

Speaker: And, um you know, I'll say to one client who, you know, i was it was amazing. And I would say, this is the piece that we need to to have that sort of complete that circle that I can present to a lawyer.

Speaker: And and she she goes away and she found it, you know, and it was it was amazing. So, you know, I do listen to the, um yes, you know, there are negatives at that, but I do listen and they often say there's tons of personal expenses going through the business. Now, that may be so, but if they're correctly put into the shareholder account and the the they're emptied out by having employment income or dividend income into the tax return, then yes, they're handled correctly. And no, that's not a valid point.

Speaker: You know, they're not on the as an expense in the income statement. So, you know, I also prove that that things are wrong. Yeah. So it gives a bit of a re reality check. Yeah.

Speaker: That's good. And if you're retained, so I've heard that you can be retained by both parties as sort of a neutral. um And then you can be retained by one party to help. yeah You know, you're you're going to end up looking at both parties finances. And in a if you're hired by a lawyer, for example, to help with it one client, you're going to see the other client statements and things like that and help yeah point to those kind of missing links. Right.

Speaker: But if you're hired by two people who come to you and say, we just need, to we want some extra help just going through all this and figuring all ah our finances. um How does that look?

Speaker: So you can talk equally to both parties? Or how does that look for like a retainer or like hiring you in that way? Yeah, we we we they hire me jointly. So, i you know, I have one engagement letter.

Speaker: And, you know, in my intake form, and they tick the boxes of the services they think they might require or or they tick every box. And, um yeah, the the engagement letter, you know, has two signatures on them.

Speaker: and And that keeps them, ah but I do work separately with them. I work together and I work separately. So, you know, a client I had recently has share options and RSUs.

Speaker: And so we spent a lot of time kind of going through that. How are we going to present it? and And then I would talk to the to to to the wife who had, you know, some, some health issues.

Speaker: So I don't have to talk to them together. um And I, you know, I do get them to upload documents to the same, you know, it's, it's called sync. It's, you know, where I collaboratively share documents.

Speaker: um And, you know, they have access to information, anything that I post in my little folder, they both can see. Right. And, you know, in this client that I had, there was some things that that that the wife didn't understand. So I had a separate Zoom call with her.

Speaker: So it works well. I mean, I think I was very, I've been very lucky to get people that actually can work together. Right. And, you know, I've got a couple now, which could do with, you know, getting a, you know, a divorce coach involved. So I've suggested that before we actually get dig into it. So, you know, and and that's where the mental health professional can really help there.

Speaker: um And then, you know, I get everything done and then I hand it over to the lawyer and say, okay, you need one lawyer. You need another lawyer. You need to look through whatever I've done because I'm not a lawyer and see if there's anything there.

Speaker: And then one can drop up a separation agreement. You know, one can advise on it and and then we're done in theory. Yeah. Yes. Yeah. That sounds like a smooth sailing. five Not always that well. I think that, you know, one of the first clients I had was, was so collaborative and I was thinking, oh, this is quite easy, but yeah.

Speaker: Um, but I, I would get, you know, someone like a divorce coach involved if I felt that there was issues between them that need, you know, intervention. Well, yes, because you can't be the middleman either in a conflict, I would imagine, that if that comes out. right so Well, you know, we kind of are, ah because yeah you know even a kind you know in a collaborative situation, the funny family professional is a true neutral party.

Speaker: A financial oppression professional is a true neutral party. The lawyers, however, although they work collaboratively, um They are hired by the individual and people.

Speaker: So we kind of because we're true ah neutrals, you know, we can go back and forth. Right. um Because, you know, and we, you know, I can say, okay, if it's getting a bit heated, the divorce coach or or the counselor or whatever, can take them aside and say, okay, let's, let's,

Speaker: decompress and then you know they can come back and especially in a zoom call instead of going to the next room you know they can just go into breakout rooms and and that works so yes i think part of my work you know does include a bit of refereeing bit of mediation uh most definitely yeah right and and i mean i suppose that applies for the lawyers too right Yeah.

Speaker: We end up being a bit of a go-between, but oh totally yeah that's the nature of it. But it's um going to be, like he's like we started off saying, so empowering in the end for everyone to have the same information and to feel like they're showing up to a process fully informed, right? Yeah.

Speaker: Yeah, yeah. And and it you know it doesn't always happen like that. In most of the cases, it may not happen like that. Right. you know um But when it does, it it's a beautiful thing. So, yeah. And so yeah and And I think where there is conflict, there are things going on in the background.

Speaker: I think that's when the ah the forensic accounting type you know, work, call it liquidation support if they're going to court, um that works. And that's a ah big part of what I do.

Speaker: Right. So, yeah, let's talk more about that because we circle back. So forensic accounting, I know I already asked you a quick question about it. So what is what is forensic accounting? What does that mean? Because people come to me and they say, we need a forensic accountant. And okay You just need to share your bank statements. so yeah yeah no And you're actually right. I mean, at the end of the day, in Canada, there is no such thing as a ah forensic accountant.

Speaker: Oh, okay. I found out the other day. Yeah. So there's a certified fraud examiner. i But I am not one. So, you know, I call it forensic type.

Speaker: You know, my background is audit. So, you know, I can delve into, as you say, the bank statements. You know, I can delve into the general ledger of the corporation because I'm familiar with with with them.

Speaker: And quite often, you know, in forensic accounting, you're wading through so much information and analysis. And the art of the game is to get all of that onto a one pager give to to, you know, to give to, you know, the lawyer and the client.

Speaker: or I come at it from different ah angles. You know, that is indicating that, you know, if I look at it a different angle, is that indicating the same thing?

Speaker: So that just increases the thing. You know, that's, you know, we're we're we're working in the right thing. But until we get disclosure um and without exception, you know, we haven't had bank statements.

Speaker: from the other side without exception. You know, there are certain things that are not disclosed, you know, we'll get financial statements from, you know, 2015 and not the last two years.

Speaker: You know, forensic accounting type jobs go in stages. And the first stage is really, you know, helping the lawyer to understand what's missing and what would be helpful and making sure that they have the the proof that they can go that route. They can't just fish, you know. um So that is ah part of that, you know, identifying documents that are missing and giving the lawyer, you know, help with the evidentiary base to ask for

Speaker: more documents um okay yeah so that's ah that's a big there's always schedule one that is here's the list of you you know missing documents and here's the list of things that I think we should ask for and this is the reason why and that's I think quite helpful to the lawyer um I would say yes

Speaker: And we can find, you know, where the other party is spending beyond their means. You know, we can do ah lifestyle analysis looking at, um you know, their spending before and their spending after. Right.

Speaker: If they're using joint funds, which inevitably, it you know, it's usually the case. um So we've got to prove that. We've got to prove that in all this bank statement,

Speaker: We're trying to prove that, yeah, they've used that amount of funds and our client has used that amount of funds and they should be adjustments between separation and and the current.

Speaker: And when that's sort of two, three, four years, you know, that can get quite a lot. um yeah You know, and I think we can look for financial discrepancies in the other parties, financial statements, where we get to review everything. and And what we find is that, you know, sometimes a person will not lie to a tax, you know, in a tax return.

Speaker: So it may be delved into one of the schedules, or it may be something simple as simple one transaction that indicates you know, hang on a minute, that's a BC Hydro bill that doesn't relate to the only property they've got.

Speaker: um And it it can be as simple as that going, huh. So, you know, you you you do have to analyze it and then, you know, take the bits that that really are impactful.

Speaker: And especially where there's a business involved, you know, in invariably it includes a guideline income. ah calculation for child and spouse support purposes.

Speaker: And it often includes that, you know, we're asked, you know, give your opinion not opinion, but, you know, what are the factors that would determine whether this really needs a proper third-party valuation of the business?

Speaker: And, um you know, we're asked and that usually is the end part of the report. um And a number of factors are involved in that. he's a sole proprietor and he's a one man band, you know, there is not going to be any goodwill. They can't sell that property, you know, that business to someone, you know, for for a dollar.

Speaker: If they've got a lot of assets, you know, Yeah. If they've got goodwill, they've got reputation. So we look at all of this, you know, we look at websites, we we can talk to the wife who who usually knows.

Speaker: yeah I say the wife, it can be the other way around. So just looking at at all aspects, um you know, to see if they' this could have a value. it it depends on the type of process. If they're going to court,

Speaker: You know, what type of report do they need? They need a full valuation. You know, so it's it's, could we just get a partial? And it very much depends on whether we can rely on both the information coming out of the ah the the business and, you know, the explanations provided by the client. So it's it's very much ah a measure of trust.

Speaker: If we feel that, you know, they're holding back things, they're hiding things, then yeah, you want a full valuation. And, you know, i I've spent time talking to and grilling, you know, a charter business evaluator as to why should we involve them?

Speaker: Right. So that's sort of part of the piece where I would pass that on to a lawyer with specific, you know, businesses. yeah Oh, okay. Yeah. So a business valuation, you would help decide whether that was needed and then you would hire someone or refer on to someone who could do that piece. Right. right? Yeah, I would, well, I'd help them to sort of say, okay, this this is kind of what the key factors, and then fit it in as to what this company does.

Speaker: And I think when I talk to a chartered business evaluator, they will often provide just an overview, just a phone call saying, yeah, right away, it needs a full valuation, you're going to court.

Speaker: So the guy that I spoke to was very long coffee thing. And um Yeah, and I think that can give a good indication of of whether evaluation is required or not. I don't make the decision.

Speaker: I just give people the decisions that will help them make that decision. yeah um And it's, you know, having evaluation, it's expensive. As in forensic accounting type jobs.

Speaker: And I very much tell the client right up front, you know, there's a lot of a lot of work going on in here that is very labor intensive and it can be expensive. Well, invariably it is expensive.

Speaker: And it can be totally worth it if there are yeah indications there are assets that are very high value. Yeah, absolutely. You know, hire me. But if you just want to sort of, you're emotional, you know, you want to get back at them, then it's not worth it because you're not going to get that money back.

Speaker: and And sometimes there's a difficult emotional aspect of this, um which I can't solve, you know. So, yeah. Yeah, because, ah I mean, a business valuation is, I wouldn't want to give it a direct cost.

Speaker: Maybe we should. what I mean, what would a business valuation look like? um So, you know, you're talking, you know, you're talking time. And, you know, you're talking between, you know, $18,000, $25,000, you know, for a business valuation. Now, if that bill system is is worth a million, absolutely. Absolutely.

Speaker: yeah um So to know those pieces that that make make that decision, okay, we're going to you know hire someone jointly to value that business, it is worth it.

Speaker: oh yeah And you know our input is worth it. and But if he's just a one-man band and it's just him, no, take retained earnings. The money, retained earnings is is the profit that they haven't yet taken out of the business. So that's still kind of a value.

Speaker: and and split that 50-50. So it can be very simple very complex. Yeah, wow. And I'm thinking back to you saying too, if it can be, you know, between the date that people separate and then the date that things actually end up getting resolved, right not to scare everyone, but it can take, it it can, sometimes it's fast, sometimes it can take two, three years.

Speaker: And so there's yeahs obviously financial stuff happening in the meantime. And if they if there's been even something as simple as a ah retirement savings plan, you know, an RRSP that hasn't been divided, there's considerations ah for that. Contributions have been made to that, perhaps.

Speaker: yeah There could be a number of things going on. There could be joint funds that have been spent or maybe one person getting the mortgage and then... It happens all the time where one person's paid the mortgage throughout the relationship and the house hasn't sold for a year or so.

Speaker: and yeah that person says, well, I paid the mortgage. And the other person says, well, I'm still entitled to a value in the house. And all of a sudden we need to do this accounting. right and um and and we can yeah we can quantify that.

Speaker: right you know Part of my work is to say the lawyers like, okay, that there is instances here that one party you know spending that, the other party is taking that.

Speaker: um let's quantify it. right And you know that can focus ah you know everybody's mind on, ah oh wow. um And it's also where, you know, there's something hidden and there's one more dominant partner in the relationship thinking, they're not goingnna they're not going to know that I've taken money out until they hire me. as And, you know, suddenly they're on an equal footing.

Speaker: Right. But it as you say, it does take time. um So people have got to have faith. patience and the funds um and belief in in in the fact, you know, that this is going to get a result. So, and often I'll look at something and I think there's nothing here.

Speaker: And often I'll look at it and then dive into something and I'll go, okay, there is something. Okay, let's go down that rabbit hole. And I won't call it rabbit hole, but it, and I think

Speaker: That's why it's important for me to check in with the lawyer. Right. Is this relevant to law? Is this something that can help you? Because I don't want to go down a rabbit hole where we've done a whole bunch of work and you guys say, that's not really helpful.

Speaker: Yeah. um ah Yeah. And and that that absolutely can happen and or stop going down rabbit holes that the client wants you to go through. Yeah. You know, quite often, know, he's sold this amount of assets and and and I'm saying,

Speaker: actually there's no evidence of that um yeah so i can be the you know bearer of bad tidings as well um yeah but it can be as i say very impactful if you know there there are high dollar assets out there yeah that should be family property yeah Well, and especially in this scenario too, so the asset piece, but the income piece, it's so often that someone feels that someone's, you know, underemployed or not working to their potential, that they're saying the business isn't worth anything. So they're not making as much when in reality they are or could be.

Speaker: And that's key for a family and for children or spouses going forward, right? Yeah. and And I think sometimes just explaining um that, you know, the family law process recognizes that different roles are equally as important. And I think that gives, ah you know, a lot partners comfort that yeah I had a good role. may not have earned all the money, but I had a role and that's just as important.

Speaker: So I think that can be, you know, a good thing for certain clients who think, oh, they've been told, you know, well, I earn all the money. You know, you just, you know.

Speaker: yeah dealt with a few kids yeah kind of thing. Just casual. Yeah, exactly. So, so yeah, I think it's a bit like in some of the jobs that I've been doing, it's a bit like having 5,000 piece jigsaw puzzle with no picture and some of the pieces missing.

Speaker: And it's a really good thing that I like puzzles, no

Speaker: you know, and I think all the services that we do provide are, although we're not actuaries to value pensions, we're not child of business evaluators, but we can provide insight on that.

Speaker: And that that's a part of our ah role, looking at making sure that they you know there's adequate life insurance or or disability insurance. And I know lawyers look at that as well.

Speaker: And a part of it is helping the clients to budget. Right. And, you know, often if we're going through the collaborative process and they say, okay, you're okay with this budget.

Speaker: Okay. You know, and, and then you let them go for six months and you invariably hear one of them says, well, I couldn't work within the budget. So you have to think, are they spending habits not right? Or was that budget not right?

Speaker: And why? um So that's sort of an important piece of, of, getting them to go forward with something that's that works, you know that they stick to a budget, but also providing Canada Revenue Agency with relevant tax documents you know relating to separation and divorce, whether they need to file a separation agreement or every time the the the support changes, they need to tell CRA and there's a form for that.

Speaker: and all All cases are different. So sometimes lawyers go, this is an unusual so situation. yeah um i specifically need ah help on that.

Speaker: So sounds like that. Yeah, I hadn't thought about that piece, too. Sort of the ongoing advisory role of it. Right. Because a separation agreement happens. um Then what? Right. Yeah. man And I, you know, I have had a lawyer say to the clients, okay, we've done these financial projections.

Speaker: Now you need to go and see Sharon every six months and update those. but and So, and it is nice to know, you know, sometimes, especially with the forensic accounting cases, you know, we do the report and off it goes and then we don't actually hear back.

Speaker: Right. about what happens and I think it's it's quite a good idea for me to check in with the lawyers um just to say hey did that work yeah because that I working in an abyss is always a learning process always always always you know you're always learning new things there's no expert on everything so I do find it with lawyers and other professionals is you know how can I make that better Yeah, and how can I help with those pieces if you've if you've um agreed to a pension division or things like that? Inevitably, there are things you have to file. There are things you have to do, provide to your pension provider and and figure all that stuff out. And, you know, as lawyers, we end up doing the agreement and...

Speaker: Same thing, we often, you know, we that's kind of our role is up at that point. And that's one of the reasons why I'm, you know, I'm happy to be here talking to you about this, right? Because it feels like we end up, our role is done, but then who supports people going forward after that? yeah How do we implement the plan, right? The plan's been made, good, everyone's hopefully happy, but how do we then go forward and see it through, right?

Speaker: Yeah. And I think, you know, especially when people do the projections, you know, part of that is figuring out the expenses, you know, which also is needed for the F8 financial statements, F4 and F8. So a lot of the information that we need for for a projection is actually on the financial statements, the legal forms.

Speaker: Yeah. And, you know, I just tweak that. do you want to buy a house? You know, do you want to sell it here? Or there's, you know, how much interest are you getting? You know, and the financial projections, They are specifically developed by the Academy of Financial Divorce Specialists.

Speaker: Right. Another the tongue twister. So many. For clients going through separation divorce. And they incorporate ah the taxation issues. They incorporate cost of living increase. They at...

Speaker: they look at what that CPP would be or, you know, OAS would be at that certain time. And they are only available to members of the academy, namely me.

Speaker: um So this can be just such a great tool um that i think I think would be valuable in so many situations. And, you know, I had a situation where The client had gone to mediation. The clients had gone to into mediation. I was, ah you know, I only was representing one part, one half of the client or one client, not one half of the client.

Speaker: And, you know, day one of the mediation, the other side said, okay, here's here's an offer. And, you know, there's invariably a time before for the second meeting.

Speaker: And um so they'll come to me and say, okay, what does this look like? going forward and I can do that and go, you know, what if we counted with this? And so I can, so that they maybe are able to either answer or put through a whole new ah proposal from them.

Speaker: um So looking at, you know, how that works going forward is, is really impactful. And I, I don't think that's well known um of, of what, what I do.

Speaker: Yeah. I think that is a key piece. That's the, I think that peace of mind and just feeling reassured by the data that, you know, you're not necessarily going to have an understanding of. And if you do, maybe just not in how it applies going forward in your life, like having that data and being able to go back and reply to a proposal. Yeah.

Speaker: Again, to use the word empowered, but feeling empowered. Right. Yeah. And I think some of the, you know, one of the key issues is that, you know, when one party keeps the house, know,

Speaker: And, you know, we all greatly say, well, okay, you know, you can take over the mortgage and blah, blah. Can they take over the mortgage if they've only got spousal support income? um You know, a bank would go, well, we want other income apart from that.

Speaker: And banks do vary. And, you know, I've i talked to a banking professional ah who they actually want me to to present to their bankers as to what I do.

Speaker: And, you know, and he was saying how difficult it is, you know, when they say, okay, well, you get the, ah you know, you get the house, you know, we figured out the equalization payment, but they have to qualify for that mortgage.

Speaker: And they have to look at that earlier. um They can't just sign the separation agreement and go oh, because once the separation agreement is signed, they they have that, that is, you know, written in stone.

Speaker: So I think also to help people who are doing that, that needs to be addressed. You know, go and see your bank manager, go on, go and you know, especially with the interest rates are going crazy right now.

Speaker: um You know, go shop around. so And I think that's another piece of something that that, you know, is a practical piece, but we look at Yeah. Like, what do you need to qualify? And let's figure it out before we make any proposals, before we realize you've made a proposal that actually might give you the asset, but you you won't be able to afford it.

Speaker: Right. Exactly. yeah You're going to have to sell it because, yeah you know, they're not going to transfer. So, yeah, that's that's kind of a key important piece um that that that gets missed sometimes.

Speaker: Yeah, crazy. Well, that's, I mean, I think we've covered pretty much everything that that you can contribute. But now if someone's thinking this sounds fantastic, I'm going to call Sharon, um but i'm I'm not sure how much this is going to, how much I need to budget. How how do i how do i set this aside? What's kind of your process for um for kind of, do you do hourly rates or retainers or?

Speaker: Yeah, so so yes to both. um we We do bill our clients. ah monthly based on the time spent and at our hourly rates and they're not all at my rate you know if I have an assistant they would be ah at a much lower rate and we do ask retainer before we start work and that retainer varies you know depending on the level of work um and the complexity of the work so if it's a forensic accounting type job it's going to be on that higher thing you know higher bracket if there's

Speaker: you know, an F8 financial statement, it you know, that everything's nice and simple, it may be be lower. And if there's a business, it's either to somewhere in the middle or higher.

Speaker: But one of the main advantages that I tell clients um who are able to work together, and there's there's a lot of times where they're not, is as a financial neutral, they can hire me both.

Speaker: They can both hire me and split flip the costs. oh yeah yeah Right. So, you know, instead of hiring two financial professionals to do this, you're hiring one that's collecting everything, you know, all the documents and and is producing something that both see. So for them, it's it's kind of a win win.

Speaker: And I would say get a CFDS in early. You know, the faster you understand the financial position, the less it will cost in professional fees. It's conflict.

Speaker: It costs money. um You know, and and we've tried to develop an intake form um that also asks, you know, if the clients come to me first, you know, that also ask questions but that a lawyer would ask.

Speaker: And um so that when I then pass that over to the lawyer, I've got to think, okay, this this is their answer and and this is why I think it's definitely something that you need to look at.

Speaker: um You know, and we've developed a whole bunch of templates that, that we some lawyers have used and went thank you very much um ah to make the process more efficient um you know and to get the client say okay just fill out this excel sheet and we are we do tend to be cheaper than the average lawyer they go um and you know although we work closely with lawyers you know, and other professionals, doesn't it make sense that a CFDS does, you know, the financial work, ah leaving the lawyers and other professional advisors to concentrate on their particular expertise?

Speaker: Yeah, I mean, I love that. i'm I'm a big fan of not overstepping my my skill set. And i I always say to clients, if if I feel, i mean, we obviously as lawyers, we deal with the financial pieces, but if i'm I'm not going to to advise a client past my level of comfort when it comes to the financial pieces.

Speaker: and And I'm the same. Yeah. If I need to elevate it, say to her you know, if I'm doing forensic accounting type work, you know, if i need to elevate that to, to a Ford specialist, absolutely I will. And I'll tell the client that too.

Speaker: Yeah. yeah Yeah. And I imagine as well, it's, it goes, it goes about saying too, that if somebody came to you and you just thought, you know what, this, this actually isn't as complicated as, as you may feel.

Speaker: And maybe you actually, maybe you don't need my help. You know, I'm sure that I mean, and i I have those conversations too, actually, I think you've got it covered or you probably yeah and get to the next stage.

Speaker: i Well, I agree. and and when they, you know, and it it depends, you know, a lot of clients, they come out with, well, I know this and I know that. And they've really done the research. which And I'm thinking, no, it's either going to you know be pretty cheap or or you probably just need to go and see a lawyer, got it all figured out.

Speaker: And go and see a lawyer because that's really all you need. Yeah. um And I think that fosters good relationships with other professionals as well, is they're saying, no, they really need you.

Speaker: um And, you know, we have, we work closely together, um but we need both of us really. Yeah. Yeah. Yeah. I'm a big advocate of the first meeting. I always say, just have a first meeting with a lawyer, have a first meeting with an accountant, get the information and they're going to tell you whether, know, we're not here to to include you in a process that doesn't benefit you, go it but go and find out.

Speaker: Let's see, let's start off and see how we can do. And then we'll go from there. And I think, and see if it's a good fit. Yeah. And I'm always, you know, I don't badge a client if we have,

Speaker: you know And i do, i confess, I tend to spend more time to understand clients and sometimes it works and sometimes it doesn't. But I don't want to pressurize them. you know If you want to hire me, this is my process.

Speaker: And I think just being that open with clients and you know I say, if you're talking to a lawyer, get someone you're comfortable with that that is is talking to you in a way you want to be talked to. And the same thing, you know, go and talk to other, you know, other financial professionals.

Speaker: I might not be as good a fit as you think. And, you know, and it's great when they come back and go, oh yeah, we want you. and and And when we've persuaded both of them to get in the process, and that's a little golden nugget day for me, you know.

Speaker: Yeah, yeah, yeah, yeah, definitely. when And that's it. Everyone in in the end, um it's a high emotional kind of situation. It's a high emotionally emotionally charged time of people's lives.

Speaker: So you really do want to relate to the people that you're working with. right um and feel comfortable that you can share because even talking about financial pieces might not seem on the face of it as emotionally charged as talking about children and parenting but it can be and it certainly is because it plays out into the whole family successes you know going forward right yeah and um one of the questions i've been asked is am i going to be a lap bag lady when i i i retire And, and, you know, I've ah actually been asked that and and people say, you know, that really resonated with me. And hopefully the answer is no, you're going to be okay.

Speaker: Unless you want to, which is also cool. I mean, yeah, absolutely. Yeah. Well, that's great. And so if after listening to today, someone thinks I do want to find Sharon, where the heck is she? How do people find you?

Speaker: Oh, that's an interesting one. um Yeah, I mean, you know, there is a ah website of the AFDS, the Academy of Financial Diwali Specialists, where they list all the financial specialists.

Speaker: but And we can be charged accountants or there can be investment advisors. So you might have clients that want one thing more than others. They want to go forward and have some investment advice. We we do get the same training as a CFDS.

Speaker: okay Or say they've got a ah business and they really want an in-depth review of that business. So that's where they can find me. I'm on the Collaborative Family Separation Professionals website.

Speaker: And that's, you know, when people Google, you know, financials, it often comes out with that. and And of course, this podcast. You know, a lot of people don't know a CFDS exists.

Speaker: I certainly didn't before, you know, before I sort of fell into this is I've never heard of that. know, this is brilliant. This is exactly what I want to do um But a lot of people haven't.

Speaker: And, you know, that's why I appreciate today because, you know, now perhaps a few more people do. Yeah, and thank you. I you know and i so i didn't know what a CFDS was until you had come to our offices. so There you go.

Speaker: And we bonded with our English accent. We sure did. Yeah, and I just think, wow, what a... ah cool way to set yourself up for life um in in this realm right in the financial realm so it's uh I'm really pleased to share it thank you so much thank you so much I will put uh the link to all the places that I've found you before in the show notes from today's episode so everyone can click around and have a look and read over your bio and things like that but uh yeah once again thank you so much for being here it's great thank you thank you very much

Speaker: Wow, what an incredibly inspiring episode. Sharon is a key resource for parties looking to build a brighter financial future after separation.

Speaker: And I can only hope that Sharon's words today empower you to really think about your financial needs after separation and beyond. Thank you so much for joining me for this episode of That Was So Real.

Speaker: As always, if you found this episode helpful, I'd love it if you shared it with someone who might benefit from it too. And don't forget to subscribe so you don't miss future episodes.

Speaker: We've got more real talk coming your way. Until next time, I'm Annabelle Gosling and this has been That Was So Real.