Marriage Agreements Mediation with Guest Judith Kaluzny (#101)

Josh Nelson interviews seasoned family law attorney, Judith Kaluzny. With over 25 years of experience practicing divorce and family law in Fullerton, Orange County, Ms. Kaluzny brings deep expertise to the table. Since 1986, she has honed her skills in mediation, completing over 100 hours of top-tier training.

Learn how mediation can lead to positive, lasting resolutions.

Contacts:
https://www.judithkaluzny.com/
http://www.keystonefinancial.com

Instagram: https://www.instagram.com/keystonefin/
Twitter: https://twitter.com/Keystone_Fin?advisorid=33004651
Contact Josh Nelson: https://www.keystonefinancial.com
Contact Jeremy Busch: https//www.keystonefinancial.com
Podcast Editing: Tim Leaman/info.primegen@gmail.com

Transcript

Hi, everyone. Welcome to the Wiser Financial Advisor Show with Josh Nelson,
where we get real, we get honest and we get clear about the financial world and
your money. This is Josh Nelson, founder and CEO of Keystone Financial Services.
Let the financial fun begin. Recently I had the opportunity to sit down with
Judith Kaluzny. Judith has practiced divorce and family law in Fullerton,
California, for over 25 years. She has spent her life in the courtroom and also
in mediation, and as you can imagine, we have a very interesting conversation
talking about a contentious subject, something that a lot of people go through
throughout their career and their life is divorce and marriage. We talk a lot
about both, actually talking about marriage agreements, talking about how to
actually get through the divorce process and mediation, and also talking about
the emotional aspects. Judith is also the author of the book Marriage License
Handbook, which can be found on barnesandnoble.com and amazon.com. She can be found at judithkaluzny.com. Great conversation that we have. I think you'll
enjoy it and find it very informative. Welcome Judith. Thank you. I'm pleased to
be here. Yeah, absolutely. Yeah, it'll be an interesting conversation. As
always, we try to learn stuff, right, on the podcast. We try to learn from each
other and, you know, try to, you know, avoid mistakes too. I think for a lot of
people, whether it's financial or even emotional, a lot of times if we can avoid
mistakes by using experience from other people, it can really make things a lot
smoother for us. So you have a lot of experience, you know, several decades of
experience in family law and divorce and mediation. And maybe just walk us
through a little bit of your career and maybe some highlights and, you know,
where that brings us today. Well, I can tell you how it started. It was back in
the early 70s. California had just switched to no-fault divorce. It was in the
air anyway. And here I am with seven kids, 17 years of marriage. I never had a
full-time job. I did not have a college degree. And I talked to a friend of mine
who was a lawyer. I said, what am I going to do? She said, you can go to law
school. There was everybody's second chance law school. So I said, oh, okay. And
my husband's lawyer brought it up at court that I had applied to law school. And
the judge said, well, it's admirable of you to want to better yourself, but
there's not enough money to go around, so you have to go to work. Wow. Oh, my. I
was devastated. However, I did start law school, and that's how I became a
lawyer was because I didn't know how to work. Yeah. That was a lot to overcome.
How to get a job, let's put it that way. In any case, and then I had been, women
were looking for lawyers in those days. And so I just naturally grabbed, I mean,
people called me for divorces, and that was my start. And then after maybe 20
years or less of divorces going to court, a friend of mine who was a sociologist
had taken mediation training, and she asked me to be her attorney consultant for
mediation. And so I started sitting in on it once in a while. And then it was so
interesting to do mediation that I started sitting in the whole sessions that
she had. And then I started taking mediation training, and then I quit court. I
quit litigation. And so for the last 20 or 25 years of my practice, I did not go
to court. And in the mediation process for a divorce in this state, at least, no
one has to go to court. We do it all by mail. We mail it in. Wow. It's a
different experience. Yes. So, yeah, it makes a lot more sense than the other
way. And it takes a lot less time, too. In mediation, I mean, like divorce in
the state of California these days, well, especially in Southern California,
theminimum, if you get a lawyer to go to court for a divorce, the minimum it'll
take you is two years. Five years is not unusual. But in mediation, I had a
couple that came in to me in February one year, and they had one house, two
kids, three 401ks, and spousal support for a stay-at-home dad. And they were all
signed, sealed, and delivered, and finished by the end of April. February,
March, April, they were done. And I told the wife that normally it could take
two years going to court, and she said, how do people stand the stress for that
long? And in fact, recently research has been showing what the stress of the
parents' divorce does to children. It's very harmful to children. So they pick
up, and there's the new research term called ACEs, A-C-E, Adverse Childhood
Experiences. And your parents going through divorce is one, but how intense that
gets probably varies with individuals. Although, I hesitate to talk about how
bad it can really get, but there's an awful lot of child suicides and murders of
children because of the stress caused by divorce, and it pushes some people over
the edge. Yeah, yeah, I can tell you from firsthand experience, yeah,
thankfully, yeah, it didn't have anything that intense, but going through the
divorce process, and I was maybe blessed, lucky enough that we were able to
settle before we actually got to a courtroom, and it certainly wasn't five years
like you're talking about. I can't even imagine how people would survive that
emotionally because even going through it over a one-year period of time on my
end and for my kids as well was just terrible emotionally. So over the years,
working with a lot of clients and a lot of friends who have gone through
divorces, and certainly nobody plans on that, right? I don't think anybody goes
into a marriage expecting that they're gonna get divorced, but sometimes that's
kind of where you find yourself and helping everybody get through that process,
especially when there are kids involved. I know from firsthand experience that
that was extremely stressful on them as well, just the uncertainty of everything
and knowing that there's some contentions, even if you try to hide that or mask
that, they're still gonna see it, right? Right, so considering the thought that
an awful lot of divorces arise from financial problems, I wrote a book. Yes, the
Marriage License Handbook. A Marriage License Handbook to help you realize what you're getting into. I mean, it's like, I was inspired by Michael Pollan's book,
The Omnivore's Dilemma, where it's a history of four meals. His last meal was an
all-natural meal. And for that, he decided to go shoot a wild boar for the
entree. But to do that, he had to take a 14-hour class and pass a 100-question
quiz to get a hunting license. Wow. And I thought, okay, and to get a driver's
license, you have to study the little book, take an eye test, a road test, a
written test. To get married, eh. Yeah, go to Vegas, right? Give me 56 bucks.
There's no preparation whatsoever, and here you are sitting out. You can change
your name. You can share your wealth. You can share your earnings. You're gonna
share your house with another person. You're gonna live with them. You can buy
property together, and you can take on the risk of somebody else's debts and the
financial responsibility for another person and the emotional responsibility.
And considering that you might even have children and raising children and
possibly facing ruinous divorce someday. With no required preparation. Right,
yeah. Yeah, people don't know what they're getting themselves into, right? I
call this the rules of the road for getting married. Yeah, absolutely. Yeah, the
Marriage License Handbook, it's on Amazon, it's on barnesandnoble.com,
dependingon where people like to buy their books. But really what it is, is kind
of helping people think through those issues, right? Before they actually sign
on the dotted lines. Exactly. Marriage, essentially, in essence, marriage is a
contract. It's a personal relationship, but it's a contract. And you could write
your own contract for what you're agreeing to when you get married. Consent is
the essence of getting married. However, all states require a solemnization.
Well, you have to take out a license and then have a solemn, we call it a
solemnization. That means you stand in front of somebody and say, I do. You
know, that's the basic consent. And you need one witness, basically. And what
you're agreeing to in this contract is written by the state. It's in your state
law, what you're agreeing to. Who knows? However, you can write your own
agreement, commonly known as a prenup or a premarital agreement. And prenupsdon't have to be just about who owns what. Or, you know, if you're rich and oneis poor, it can include things like: * How are we gonna run our life
financially? * Are we gonna have a budget? * Who's gonna pay the bills? * Do you
owe any money from buying that Mustang? * What if we have children? * Will we
raise them? * Do you care about religion? * Will we be sending our children to
church? There's all kinds of things you can think about for writing an
agreement. One of the things most people would never think of is how do you
compensate one parent if they take a time off of work for raising children?
Right, absolutely. Yeah, pretty common. And one thing people don't know is that,
well, I'll use me as an example. Married 17 years. I get to be 65 years old. I
go to social security. I cannot, and I'm working as a lawyer now, earning money.
I cannot, oh, and every person who is married 10 years or more is entitled to
check, to collect on the ex-spouse's social security. It doesn't take anything
away from the spouse. But, so I learned, well, I knew it intellectually, but
believe me, it was an emotional blow to realize that I could not collect on my
married social security and my working social security. I had to take one or the
other. Right. And stay-at-home parents don't realize it's gonna be a financial
blow that way. I was sitting there in the social security office. They're very
good people. It was there only 30 minutes. Wow, that's impressive. And, oh,
anyway, I was telling the social security person that she's doing her keyboard
work. I said, you know, our chief of police retired and he's got two
retirements. He retired from Los Angeles and he retired from Fulton and he's
collecting $212,000 a year, you know, and I can't- Well, I can't collect both of
my pensions. And she said, you should have been a chief of police. Yeah, I
guess. In any case, that's a financial consequence that people need to consider.
So you might wanna put that in your agreement while you're thinking about
getting married and having children and whether one spouse will stay home and
what will you do to compensate for the time out of the workforce? So- So it's
helping people think through all these things that they probably don't, a lot of
it they're probably not even aware of. Yeah, and another thing you could put in
your agreement is, you know, problems are gonna arise and you might wanna think about establishing a plan for how to resolve problems if you can't get through it. Like: * We'll go to mediation. * We'll do this. * We'll do that, you know,
an agreement, how to deal with problems. And if youdon't write an agreement and
you're married for 10 years or so and problems come up, you know, you can do
what I call post-nups. You can write binding agreements during marriage and
agreements that will change your state's default contract. So one example was,
well, a woman came to me when I was still doing litigated divorces. She had
established a business 11 years before and it was a thriving business. And when
she started it, she had wanted it to be separate property and she consulted with
the lawyer. He said, oh no, you know, it has to be community property. Not true,
not true at all. She and husband could have written an agreement in writing,
doesn't have to be fancy language, but signed and dated an agreement that it
could have been her separate property. And so, oh, another post-nup agreement I
did in mediation. Husband and wife, I had a couple of kids and husband loved
wife dearly, but he was getting awfully upset with her spending habits. And it
was making them really, really nervous. So they came in and I worked out a
financial agreement that separated their finances. And that he could feel
confident. And in that case, I advised them to file their agreement with the
county recorder, because filing of that financial agreement with the county
recorder gives official notice to any creditor that they do not have community
property money. So that wife's debts are her separate debts, husband's debts are
his separate debts. So that, it's maybe a creditor might not notice that, but
still it's official notice. We have a lot of client situations that we've run
across over the years of people that are going into maybe a second marriage or a
third marriage, kind of down the line. And an agreement, obviously you could
sign that at any point in your life, but oftentimes when people are getting
married later in life, they do come to the marriage with a different collection
of assets and income and businesses and things like that. So what advice would
you give to them as far, because sometimes, frankly, people sit in front of me
and it gets really awkward, right? When that comes up, right? Prenuptial
agreement, because one or both, right? Start to feel a little bit funny, like,
well, don't you trust me, right? That's kind of the emotions that come out. What
advice would you have, or what would you say to folks that are kind of feeling
that? Well, you might quote Ronald Reagan, who said, trust but verify, which is
actually a Russian proverb. Oh, boy, interesting. Trust but verify. Yeah. One
way to talk about these things instead of getting an argument is to make
proposals, like say you're intended. You know, well, I propose that we do blah,
blah, blah, blah, and then that invites the other person to make a different
proposal, and you can go back and forth with proposals. On the other hand, if
you really can't do that, you might think of consulting with a mediator. Sit
down with a mediator, and the mediator will kind of guide you to it. A mediator
can help you listen to each other, and a mediator can help you focus on one
issue at a time and help ask questions, you know, to promote understanding. I
mean, a mediator is not a therapist, but a mediator can help clarify issues and
help you understand each other's proposals, you know? And help you respond to a
proposal positively, and then ultimately come with decisions. And, you know,
making agreements means you can always do a new one as things change later on. You know, 10, 20 years, your agreement isn't satisfactory, you can change it.
What are some really bad recommendations that you hear in your line of work?
We'll maybe focus more on mediation, since, you know, your law, your courtroom
experience was earlier on. What are some reallybad recommendations that you hear in your professions? Hiring a shark or a barracuda for a lawyer. I had one guy
actually lived in an apartment house across the street from my office. And so he
saw my sign, lawyer and mediator. And he wanted to do mediation and I sent my
wife a nice letter. And she responded by getting a lawyer. And it was a very
nice lawyer. It was a lawyer that the first thing she did was help them arrange
a parenting plan and get that settled. Very good. However, I think wife hung out
with the PTA ladies too much. And they advised her she really needed hard nose
lawyer, a barracuda shark. She went to the number one shark of Orange County. So I contacted my friend George a year or so later. How's it going? And he said,
well, after two years, $250,000 in attorney's fees, 17 appearances in court.
Finally, Mary and I went to a coffee shop one night, sat down and spent all
night. And we worked out our own agreement. And the barracuda got very rich in
the process. Right, right. So I would say, you know, try to hire a mediator if
possible. Become informed as to what your state law says is required. If you
don't already know, we have only nine community property states. And other
states, they divide property not equally, but equitably. And so what's fair and
equitable is for, you want a judge to decide that? Or do you guys want to figure
it out yourself? Yeah, I remember that, kind of going through that process
myself. And yeah, I remember my attorney saying that, is that you really don't
want to go into the courtroom. Because, you know, but if you guys can't figure
it out on your own, then it's out of your hands, right? It's out of your hands.
Now a judge for better or worse, right? I mean, it could be in your favor or not
in your favor. But, you know, if the two of you can actually be reasonable and
come up with something, either through mediation or something else, right? And
that's what we ended up doing. You know, then at least you may not be thrilled,
right? Either side is probably going to like every aspect of an agreement. But
at least it's something that the two of you had some input on. In this state, we
have an awful lot of help for people going through divorces. The judicial
council are the people who run the courts. They have an excellent website that
in plain language carries you through the steps of all sorts of court
procedures, adoptions, probate, and family law, you know? And it's really, they
really do good work. And then all the courthouses now have self-help
departments. And you can go in and get instruction as to what you need to do.
So, as I say, I think, you know, mediation is the best way to go. There are high
conflict people. In this state, it's, well, it's estimated that like, you know,
three to 4% of couples that go to going through divorce are high conflict. They
definitely need a different process. Mediation is never appropriate when there's
any domestic violence, not ever. Right. So there needs to be a process for
process. Like there's a guy that's an absolute genius and a warm-hearted man.
He's called Bill Eddy, E-D-D-Y. Bill Eddy? E-D-D-Y. And he has the High Conflict
Institute in San Diego. Oh, interesting. And he's written some wonderful books.
And one of them I gave to our supervising judge of a family court, and it's
called Dealing with High Conflict People in Court. And it instructs judges how
to deal with people. Yeah. And then there's another book that I recommended as
one of two references in my book. And that's called, it's called, oh, wait a
minute. Five Types of People Who Can Ruin Your Life. Interesting.Five Types of
People Who Can Ruin Your Life. Narcissists. Right. And then for dealing with
ordinary office and social media, he's got a slimmer volume called BIFF,
B-I-F-F, how to respond to contentious people. And that's be brief, informative,
friendly, and firm. And I told him that he needs to write one of those for
teenagers or preteens. It could be helpful. Yeah, I mean, just sooner or later,
if you're around this world long enough, you're gonna run into those people,
right? That are high conflict. I remember the term scorched earth being used in
the divorce process that, you know, some people out there are just scorched
earth, that that's what they want, right? Is just, they want the conflict. Well,
I can tell you is that I'm working on my magnum opus. The process, I've had this
in mind for umpteen years, umpteen years, that the process of divorce is totally
illogical, totally illogical. I started thinking about this one time when I was
representing a deputy sheriff and he had a son that he was involved with a young
woman before he was married. And so the kid was with mom and now this deputy
sheriff was married and having children of his own. Anyway, one day grandma of
his premarital son calls up and says, your child is living in a drug house and
if you don't go get him, I'm going to. So dad went and got his kid and then I
met with him and the mother and we worked out a simple parenting plan for her
to, you know, see the child. And then she and her mother hired a lawyer two
months later and said, well, now that I got more time with my kid, I want
custody. And the judge ordered a custody investigation and evaluation. It took
months. The process was so horrible. My client and his wife almost got divorced
and it took, I think the cost was $5,000. It took five months and the
investigator did some bad testing. My client was of Chinese extraction from
Vietnam. He did MMPI testing, which I know you do not use that on a person with
a Chinese background because their cultural background and philosophies just is
totally incompatible. So I hired another psychologist to come to refute that. So
we get to court and we got this 53 page report. The judge didn't look at it. The
psychologist is sitting there in the stand. The judge doesn't want to hear a
word from him. The judge talks to mom and says, you know, mom, you got this kid,
blah, blah, blah. Dad, you had this child and you want blah, blah, blah. And in
20 minutes, he had settled the whole custody matter. And I thought, why didn't
we do this at the beginning? Right, right, absolutely. It did make sense. I
drove back to the office and I was thinking of, I don't know, remember the
bridge on the River Kwai where these prisoners spent years building a bridge and
then it gets blown up. You know, we spent all those months and monies and the
judge solved it with just talking to the two people. Yeah, well, and again- This
has got to change. We can't, you know. So anyway, my book that I'm writing is
called- The American Way of Divorce. And the state of California has tried three
times to fix family law. The first time was with Governor Brown I and his Family
Law Commission changed the process to no fault and said, we want this to be a
non-adversary process. Well, as a client pointed out to me, on the summons that
goes with the petition for, well, we call it dissolution of marriage. It's
supposed to sound nicer. Everybody calls it divorce. Right. Butso we're not
plaintiff and defendants either. We're petitioners and respondents. So under the
respondent's name, someone says to the respondent, you type in the name, then
underneath that there's a black box that says, you have been sued. That's their
idea. That's a non-adversary process. Right. And then the other thing that's
included on the petition is you have to choose a form of custody and visitation.
You know, what words go with custody? Win, lose, and battle. Right. Especially
when it comes to kids, it's one thing fighting over money but when it comes to
kids it's really very emotional. A client says to me one time that the courts,
the process forces you into hostility. So there are 15 or 16 states that have
changed their state law. Colorado is one of them. They have eliminated those
ugly words custody and visitation. In California, the state assembly passed such
a law in 1989 but our state Senate rejected it. So we still do custody. Makes
more money for lawyers. It's a whole major industry for psychologists too. Oh,
yeah, I'm sure. Yep. And I kind of unfortunately experienced some of that
process but you could see, you know, along the way you could see all the people
making money on the process. Yeah, and it's, what the laws changed to is some
form of calling it a parenting plan. You know, Tiger Woods in Florida did a
parenting plan. The Cowboys in Montana do parenting plans. And the oil men in
Texas do parenting plans. Like I said, there's about 16 states that have
civilized their law, their family law, at least to the extent of eliminating
fighting words and words all psychologists agree words to make a difference.
Absolutely. Absolutely. Anyway, if that's the actual day any feel at all for
when that'll be ready to share with the public. Oh, gosh. Oh, it's, it's, I want
to do it. The title is, in my mind is reminiscent of Jessica Midford in the 60s
wrote the American Way of Death. And the American Way of Death caused a major
upheaval in the funeral industry laws were changed, you know people became
enlightened. I hope to start the same. I sure hope so. Yeah, I sure hope so
because the system. Yeah, there's lots of parts of it that are broken, I can say
from experience and again working, working with so many people over the years
that there's definitely room for improvement. Total change from the ground up
my, my theme is a quote from from from Einstein. You can't fix a problem with
the same thinking that created it. We got to start with new thinking. And
anyway, so. Well, best of luck on that and for right now we get to enjoy the
book that is out though and I think would be very helpful for people that are
kind of, you know, thinking about that right so thinking about marriage, whether
it's a first marriage or second marriage, but the marriage license handbook, and
again, I guess two different places people could find that: 1. Barnes and Noble
2. Amazon And you mentioned to me before we started talking here that the.
There's an ability if somebody is involved with a nonprofit they could contact
you directly and get a discounted copy. Yeah, or discount bulk orders. Right.
This is, this is a very useful book for thinking about what you're getting into,
you know, and what consequences that might be. And as I say, you know I
understand that a lot of divorces start with financial problems and this helps
you to think about not only financial issues but child issues and personal
empathy issues like you know what is your philosophy of life can you talk about
sex you know and various suggestions like that. That's excellent and yeah I can
tell just from experience 23 years in this industry in thousands of meetings
with people over the years that the studies say that that's the number one cause
of divorce or marital strife is finances and I believeit. I definitely believe
it. With a number of conversations I've had with people, even in the best of
circumstances, people usually, there's usually a spender and there's a saver
among the couple. And then sometimes they're not able to come to a consensus. It creates a lot of stress. I'd like to make one suggestion for your audience in
whatever state. You might wanna check your laws. California family law requires,
imposes upon married couples a fiduciary relationship. And I'm sure you
understand what a fiduciary is. We are a fiduciary, yes. Yes, and highest good
faith and fair dealing. And in the divorces, the state takes, the judges in the
state take fiduciary responsibility very seriously. There was one woman who
bought a lottery ticket with community money. And although then they were going
through divorce and she found out she won and she didn't tell her husband, but
he found out and took her to court. And as punishment, the judge didn't just
divide the money. He gave the whole thing to the husband. Wow. Yeah, in
mediation, I had a noted official of LA County that wanted to keep things on the
quiet. So he came to mediation with his wife and they were getting a divorce
because she found out that actually their 12-year-old daughter found out online
that dad had been having an affair for five years. Interesting. And wife was
outraged, partly because they had a handicapped child also and wife had been
pinching pennies all this time while he's out there going to hotels and fancy
restaurants. So she asserted her fiduciary rights and husband came in with a
two-inch binder accounting for every dime he had spent on the other woman. The
agreements provided that when they sold their house, he would take, the total he
had spent was added up to $40,000. So when they sold their house and divided it
50-50, he took 20,000 from his half and gave it to her because he had spent
community money. Okay. Interesting. Yeah. Yeah. So, and they did that through
the mediation process or did they go to a judge? No, I right here. Well, good
for you. Yeah. Good for you. I'm sure some very tense conversations that you've
been in with people over the years. Well, we get through it. We understand.
Yeah. And this man was a public official. He didn't want this all aired in
court. So. Yeah. Yeah. He did the right thing. Yeah. Absolutely. After two
years. Yeah, I know. Right. Yeah. Well, that should go without saying, but
again, divorce situation, nobody plans on that, but stuff happens, right? And
then you've got to deal with that. You know, from what we had talked about
before, the best way to deal with much of this is doing some pre-planning and at
least know what you're getting into instead of being surprised later on and then
certainly avoiding some of the crazy situations like spending hundreds of
thousands of dollars on attorneys. Yes. Yeah. Yeah. Well, the best way to find
you is your website, correct? Judith Kaluzny. Kaluzny is K-A-L-U-Z-N-Y.com.
That's the best way to find you. And then there's also the
marriagelicencetest.com. That's marriagelicencetest.com. At the end of my book,
I have a test just like the DMV. Good. A written test. Yeah, maybe that'll catch
on. They'll make people pass that test before they'll let them get married,
right? Wouldn't that be something? It would. It would. It would probably
eliminate a lot of confusion out there, I'm sure. So, but we had a great
conversation today and yeah, thanks for spending the time with us. I think
that's gonna be very helpful for people. And again, just knowing what they
should be thinking about. Oftentimes, I think the mistakes that can get made are
just things that we don't know about, right? We just don't know what we don't
know. Yeah, and even if you don't have money, you can talk about the other
aspects of marriage before marriage. You know, it doesn't, a pre-marital
agreement doesn't have to be just about money. So, onward. Absolutely. Thank youso much. My pleasure. We love feedback and we'd love it if you would pass it on to me Also, please stay plugged in with us, get updates on episodes, and help us promote the podcast. plugged in with us, get updates on episodes, and help us
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podcast service. This episode has been prepared for informational purposes only
and is not intended to provide and should not be relied upon for tax, legal, or
accounting advice. You should consult your own tax, legal, and accounting
advisors. Investment advisory services offered through Keystone Financial
Services, an SEC-registered investment advisor. Keystone Financial Services and
Judith Kaluzny are separate and non-affiliated parties. Keystone does not
endorse or receive compensation from Judith Kaluzny. The views expressed
represent the opinions of Judith Kaluzny. The views are subject to change. This
material is for informational purposes only.