🎧 New Episode Alert: This week we’re joined by Amy Colton, a wealth advisor, Certified Divorce Financial Analyst (CDFA), family law mediator, and founder of Your Divorce Made Simple. Amy has helped hundreds of couples untangle the financial side of divorce, and she’s been through the process herself three times. This episode is a masterclass in divorce financial planning: what to know before you hire an attorney, where money quietly disappears, and how to protect yourself from decisions you won’t understand the cost of until years later.
Guest: Amy Colton, wealth advisor, Certified Divorce Financial Analyst (CDFA), and family law mediator. Founder of Your Divorce Made Simple and author of 27 Tips on Divorce and The Kitchen Table Divorce: A Practical Guide to Finalizing Your Divorce in 90 Days.
Theme: Why the financial side of divorce is the piece most people skip, and what it costs them when they do
Episode summary
Most people are told the same thing the moment a marriage starts to end: call an attorney. Amy Colton has built her practice around the argument that this is the wrong first move, and she has the case files to back it up. Divorce, she says, requires three professionals at minimum. Someone for the emotional side, whether that is a coach, a therapist, or a solid support group. An attorney, eventually. And a financial professional, which is the one almost nobody addresses. Her question cuts through the whole thing: what do people fight about? They fight about finances. So why hand that fight to someone who does not do budgets, taxes, or investment strategy?
The conversation goes deep into the places where money quietly disappears in a divorce. Amy has pulled hidden income out of tax returns, found $350,000 that nobody could account for, and worked with a physician whose husband had opened an LLC in her name and claimed an $87,000 loss she knew nothing about. She talks about the woman who had no idea her husband earned two million dollars last year until she finally read the return she had been signing for years. Amy calls this financial abuse, and it is the subject of her next book. Alongside the forensic work, she and Karen walk through the practical mechanics that most divorcing couples never learn until it is too late: which assets are taxable and which are not, why the marital home can carry a capital gains bill years after the decree, what a QDRO actually is, how restricted stock units complicate a settlement, and why fair almost never means an even split down the middle. Amy has also lived it. She has been married and divorced three times, and she is candid that in her first divorce she used her attorney as a therapist, which she names as one of the most expensive mistakes people make.
We cover
- The three professionals every divorce needs, and why the financial one is the one people skip
- Why most people do not need an attorney on day one, and what should happen first
- The real cost of the attorney-first default: 12 to 18 months, hourly billing in six-minute increments, and communication routed through two offices
- Mediation as a starting point rather than a last resort, and what a flat-fee process changes
- Taxable versus non-taxable assets, and why a 401k and a brokerage account of equal size are not equal
- Dividing the marital estate means dividing liabilities, not just assets
- The marital home, capital gains, and the difference between the $500,000 married exclusion and the $250,000 single exclusion
- Why filing status matters: the IRS treats you as divorced for the entire year regardless of the date, and Karen’s timing strategy for couples finishing paperwork in the fourth quarter
- What Amy finds inside tax returns, why she asks for at least two years, and why some cases require five
- Restricted stock units (RSUs), vesting schedules, and how to divide something earned during the marriage that does not arrive until after it
- Financial abuse: hidden income, undisclosed LLCs, improper Schedule C filings, redacted returns, and what to do when documents are withheld
- Forensic tracing in practice, including missing financial statements never turned over in discovery
- QDROs explained: what they are, who prepares them, why the money has to move like to like, and the employer question you must ask before finalizing
- When you can avoid a QDRO entirely by moving IRA to IRA
- Moving money between retirement accounts during divorce without penalty
- Why “fair” and “50/50” are not the same thing, and how equitable distribution and community property states both try to reach the same goal
- Using your attorney as a therapist, and what that mistake costs
- The hardest divorces to navigate: when one party wants it and the other does not
- Building financial stability after the decree, including income-producing versus growth investments and why depleting your principal is the danger to watch
Highlights & takeaways
- “What do they fight about? They fight about finances.” Amy’s core argument in one line. If money is the battleground, the absence of a financial professional is not a small oversight. It is a structural gap in how most people are told to divorce.
- “There are so many nuances inside the tax return.” Amy asks for two years minimum and is currently working a case that requires five. Signing a joint return without reading it leaves you exposed. In one case, an improper Schedule C filing means the spouse who signed is the one at risk in an audit.
- “A 50-50 split is not always fair.” Amy walks through a live example: a husband who earned two million dollars last year and a wife who has been home with the children. He walks out and keeps earning. She has to rebuild an income from a standing start. An even split does not account for that.
- “You need to know these things before you make a decision.” On the marital home, capital gains, and future tax exposure. Amy’s point is not that keeping the house is wrong. It is that you should know what the bill will be in three years before you agree to take it.
- Karen: “You can do divorce by design. You don’t have to do it by default.” The default is two attorneys, opposing sides of a table, and a process that runs on somebody else’s timeline. Design is a choice you have to make deliberately and early.
- Karen: “The marriage is ending, not your relationship.” Especially with children in the picture. The people you sit near at the Christmas concert in six months are shaped by the process you choose today.
- “I used the attorney a lot as a therapist. And that’s a very costly mistake.” Amy on her own first divorce. Emotional support has a place in the process. It is not billed at $400 to $600 an hour in six-minute increments.
- Karen’s teeter-totter: equitable does not mean identical. One person may hold a watermelon while the other holds two cantaloupes. A good mediated outcome sounds like this: I did not get everything I wanted, but I did not lose everything I needed.
Content note
This episode discusses financial abuse and coercive financial control in marriage, hidden income and undisclosed assets, infidelity uncovered through forensic financial review, high-conflict and contentious divorce, and the dynamic in which one spouse wants a divorce and the other does not. Amy also shares that she has been married and divorced three times. The conversation is educational and general in nature. It is not legal, tax, or investment advice for any individual situation.
Resources mentioned
- yourdivorcemadesimple.com Amy Colton’s practice. She offers a free initial consultation, bookable through the Calendly link on the site. Amy works with clients across the country, since the financial mechanics of divorce are consistent state to state. What varies by state is the legal piece: alimony, child support, and parenting time, which requires an attorney licensed where you are divorcing.
- amy@ydmsteam.com Direct email for consultation requests.
- The Kitchen Table Divorce: A Practical Guide to Finalizing Your Divorce in 90 Days Amy’s book, available on Amazon. Includes client stories and the amounts those clients saved through financial guidance during the process.
- 27 Tips on Divorce Amy’s ebook, built from the questions she is asked most often. Much of this material is also folded into The Kitchen Table Divorce, so there is no need to buy both.
- Certified Divorce Financial Analyst (CDFA) The credential Amy holds. A CDFA is trained specifically in the financial and tax mechanics of dividing a marital estate, which is distinct from general financial advising.
- QDRO specialists A qualified domestic relations order is prepared by a specialist, not typically by attorneys or financial advisors. Budget for this as a separate cost, and confirm with the employer’s plan administrator what is permitted before your agreement is finalized.
- IRS tax return transcripts If a spouse produces redacted returns, transcripts can be requested directly from the IRS. If you used a shared CPA, you can also request copies from them.
Connect
If this episode gave you language for something you have been quietly worried about, follow The Good Divorce Show wherever you listen, leave a rating, and send it to someone who is in the middle of it right now. Ratings are how families who need these conversations find them.
Follow Karen McNenny on Instagram at @karenmcnenny and find her work, book, and speaking information at karenmcnenny.com.
Everything will be okay in the end. And if it’s not okay, it’s not the end.
Additional support
If you are anxious about managing money on your own after divorce, that is a common and reasonable fear, and it is a solvable problem. Amy offers a free consultation at yourdivorcemadesimple.com.
If you are carrying the emotional weight of this on your own, please do not route that through your attorney. A therapist, a divorce coach, or a support group will serve you better and cost you far less.
If you suspect financial abuse or hidden assets in your marriage, a CDFA or forensic accountant can review your returns and account statements. Trust the instinct that something does not add up.
Karen’s book, The Good Divorce: How to End Your Marriage Without Ending Your Family, offers the full roadmap for restructuring a family with intention instead of defaulting to conflict.
