March 20

Hirsch Serman – Creating a Values-Based Divorce And a Values-Based Life

Episode Description

What if you could get a values-based divorce - one that aligns with your values, rather than one that destroys everything you hold dear?

Hirsch Serman, MBA, CPA, and CDFA, discusses the values-based approach he uses to help clients prioritize, organize, and simplify their financial life during and beyond the divorce process. Hirsch is committed to helping each client understand the more complex tax and financial implications of their situation so that they can create a divorce settlement that truly accomplishes their goals. He also discusses how making sure both spouses understand their financial situation allows them to create a settlement that works for both parties. Finally, he emphasizes the importance of understanding the financial implications of your decisions and your spending.

Show Notes

Hirsch Serman, is an MBA, CPA, CDFA and trained mediator. He specializes in the financial and tax aspects of divorce. His values-based approach is to Prioritize ~ Organize ~ Simplify your financial life during and beyond the divorce process. Hirsch is committed to helping each client understand the more complex tax and financial implications of his or her specific situation. 

Where to Connect with Hirsch
You can connect with Hirsch on Facebook at Women's Financial Wellness. He is on LinkedIn as Hirsch Serman. You can also find him on his website at or email him at [email protected].

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Creating a Values-Based Divorce And a Values-Based Life with Hirsch Serman


divorce, people, work, life, finances, priorities, hirsch, values, decisions, financial, pay, piece, spend, understand, spouse, clients, strategy, talking, discussion, point


Hirsch Serman, Karen Covy

Karen Covy 00:03

Hello and welcome to off the fence where we deconstruct difficult decisions so we can discover what keeps us stuck. And more importantly, how do we get unstuck so that we can make even difficult decisions with decisions with confidence. I'm your host, Karen Covy. I'm a divorce and decision coach as well as a recovering lawyer, mediator, arbitrator, collaborative divorce professional and author. And joining me here today is my guest Hirsch sermon. And I'm going to read this because this man has so many credentials on letters after his name, I want to make sure to get it right. So Hirsch is an MBA, a CPA and a CDFA. And he specializes in the financial and tax tax aspects of divorce. His values based approach is to prioritize, organize and simplify your financial life during and beyond the divorce process. Hirsch is committed to helping each client understand the more complex tax and financial implications of his or her specific situation. As a certified divorce financial analyst and a certified public accountant and a trained mediator. Hirsch is uniquely equipped to recognize and creatively work through financial complexities, tax ramifications, and inequities in the settlement process that are often overlooked. Hersh, thank you for joining me today.

Hirsch Serman 01:27

You've set the bar pretty high. Appreciate it. Thank you.

Karen Covy 01:30

Well, I didn't set the bar high. This is just who you are. And I'm so thrilled to have you here on the show. And I'd like to start by jumping into something that is what I'm going to call your tagline. I don't know if that's really what it is or not, but you talk about prioritize, organize and simplify your financial life. How do you help clients to do that? And what does that mean to you? To me, it really means identifying your values, and wanting to live a values based life and then creating an approach in how to do that. So the priorities are really what are your values, what's important to you, I think, especially when somebody is going through a divorce, that they the first thing they need to do is actually step backwards, not forward. There's so many things that need to think about, like they've probably forgotten who they are, or very possible. They've been through, you know, this 20 years, or sometimes we see 3035 years with a marriage, people getting divorces that they don't even remember who they are, they don't remember what they want out of life. They've been putting so much effort into maybe saving their marriage, all of these things play in to where they are now. But they need to start looking forward and in a very different way. So learn again, what brings you joy, very possibly, they've lost a lot of these things, and maybe even all of these things. And a very big one, obviously, from my side is to understand who you are financially. And so those are all the priorities, what are the things you want in your life, from the financial side of it, and a lot of the pieces that don't seem like that financial, obviously have a financial impact because they make us money, or we've got to plan for them. So the first part is really that prioritize what are those values? How do I want to live my life, the organizer is getting educated, and putting a little bit of a system around that. And so I do things differently in some of the ways I don't do a budget in the regular way I do what I call a divorce budget, which I've created, which I think helps you a little bit with the strategy of divorce. And then ultimately, being able to simplify it, putting it into that system, being able to work in a way that works for you. That becomes more simple a lot of people are they find the finances don't.


They've never done it before. They are not sure what to expect, what's going to change, and all of that No, all of that's natural, we have a fear of the unknown, very often, it really becomes following this approach. And it's not rigid in the way you have to do it my way it's really around you because this is going to be your life. But being able to do that identify your your priorities and your values. Let's organize around them get you educated where you need to be find the resources that you need, and they get a system for you to work through becomes a much easier way for people to live their life and also the food was instead of their life beyond the walls. Okay, I love this. There is so much here to unpack. This is just I think it's brilliant. And what's what's really unique about you and about this conversation, is that I have talked to a lot of divorce professionals. I don't hear a lot of people talking about values and divorce necessarily in the same sentence, right? We all think of Yeah, we


We think of divorce as something where you kind of go through this temporary insanity, whatever kind of behavior you that exhibits and in you or your spouse, it is what it is. It's all okay, it's part of divorce. But a values based approach to divorce sounds so much more fulfilling, it sounds like it could make meaning out of the chaos, you know. So lost to that what you're saying, you know this, I know this, when you go through a divorce, your income generally is not going to change. However, you want all the things that you had in your life, but there are two families or two houses that have to be, you know, financed through the same income basically. And so we can't always get everything we want. And that's where identifying your values becomes so important. There's a lot of things we do in life that don't bring us that much joy, there's a lot of things we do in life that do bring us joy, let's focus on the items that are going to bring us joy. And let's create a life around that, as opposed to, I want everything I've ever had. You know, it's unrealistic to be number one. And number two, you know, most people are going through a divorce, they're things that they don't want in their life that they've had before. So let's really focus on where your life is gonna go. And again, the things that bring you joy, ultimately, are the things you know, joy can be also, I think security of the future brings people happiness, being able to know they're going to be secure. These are the things that I try to focus on and help them focus on. Yeah, that you know, that's so true, because you can't, it's hard to feel joy and feel happiness when you're worried about how are you going to pay the mortgage next week? Or how are you going to send your kids to daycare or whatever, whatever the expenses. So I think you're right, these are all intertwined together, but you work with people at some of the most difficult times in their life one of the most difficult times in their life, how do you help them navigate that? How do you help them make those values based decisions, rather than just, you know, going through the process, and doing you know, getting through it however they can and hoping for the best.


The best piece I said is a little bit of stepping back and really identify, I have a worksheet and a session that I do with people. And it's all around your values. And it's your priorities. And it's you, your kids, the finances, these are the kinds of things that we're going to run through. And there are items, so to speak, on the page that I've put down, but they're really intended to really be a catalyst in getting the discussion started, as opposed to being everything that we need to discuss, because everyone's divorce is a very personal event in their life. So we stop there. The second part to that is, then we run through column two, which is your spouse's priorities on the same page. And I think this is a piece that is missing in so many people's approach to doing divorce when they go through a divorce. And it identifies a few things. One is it identifies potentially, with a lot of those very difficult discussions are going to be because you both want the same thing. We both want the house house, the house is the classic one, let's just say that's it, there's going to be a hard discussion around that as to who gets the house, the alternative is now we can look at all the things that I don't really want, that maybe the spouse does, that I can give up towards getting that, well, that's gonna be a much stronger negotiation and selling of the idea than if you just walk in there, and it's all emotional. So that's one piece of it.


The other piece of it is as I go through, and I'm understanding a little bit more of what is makes that person tick, let's put it that way. I've even had a situation or a few situations happen quite a few times, we'll run through some of these things. And then we get to the spouses. And now when we're having those discussions, we start to create the beginning of our strategy for it. I'll give you one example. I think I've probably shared this with you over the years, but we run into the spouse we get to debt. And the wife who I'm working with says, Oh chi is terrified to death. I'm like, tell me more about this, right? This could be something we can use. Well, when he was a kid, his parents declared bankruptcy. They ate in food kitchens, and he said it was just like a miserable way to go to high school or your friends are doing for the cost of a restaurant. So I said, Okay, well, let's look at your debt. They had actually about $35,000 in debt 20 plus percent on the credit cards. So I said, Well, you've got plenty of assets to pay this off. We're not going to mention that. We're going to save you two years worth of it, because you've been carrying it for more than two years, then we'll take all the debt.


Well, when you look at about 45% of that money, that's a windfall because you had to pay 50%. Anyway, you've only really taken on 5% more debt, but the goodwill and everything else that came with that, and what they did, you know, was amazing. And so they were able to use that in other areas as well, to be able to really get things because it wasn't a one and done it was, I'll do this, if, you know, I'll take the dead if you give me this kind of thing. So it was a play with it. And so they got quite a bit more by using this strategy. So that was, number one, the values of priorities, understanding yours, understanding your spouse's and what comes with that. Then we set up the divorce, what I call the divorce budget, which I've created, most people are how much do I earn? How much do I spend, you know, you can even like put a quick prayer in at the bottom line.


And the statistic by the way that I see about 70% of households don't have a budget. So this is unique and new for most people. So what the way I do a budget is I say, I don't want to know your income upfront. I only want to know your essential steps.


And we look at that, and we try to place that essential spend as close as we can into post divorce living. So what would your housing look like? Especially if you're not keeping them out of oh, those kind of changes are taken into account. Okay, I need to interrupt for a second, what do you define as a sensual spend? Great question. So essential spend on things you have to have to get through the month, I need food, I need a place of my head, what you would almost look at Maslow's lowest piece of the hierarchy, right? The safety the home, I need to have a car probably to get to work, the very basics like that, that I have to have to get through them all. Okay, then after we understand your essential spend, and by the way, cable is not essential internet is just to give you an example that we could not be speaking like this, if we didn't have internet, I know you and I do a lot of our work of the internet. Having a cable package for $350 is not necessarily an essential spam, that is a want that is a non essential or discretionary sin. And that's the second piece of it, we look at the discretionary spend that in your life. And firstly, it brings a tremendous amount of awareness of now how I'm spending my money, which is very important. The second piece to that is you now need to make decisions, or you're going to scale back on something, or you absolutely need that in your life, even though it's discretionary. Or maybe I've had people that say, I'm going to cut it out, I actually had a gentleman, it was about an eight or $9 million estate, walked into the big world of a big woodworker. And he says, you know Hirsch, I'm going through this, I'm looking I spent over $180 a month in these gorgeous woodworking periodicals, that the most gorgeous pictures step by step is that I haven't looked at them in a year. I go to the internet, I get on YouTube, I hit play, I look, I hit pause, and I go and do it. He just saved himself about 21 $2,200 in one little item like that.

Karen Covy

It sounds like everything. Yeah, it sounds like that ties back to your original point, which is values and priorities. And what I what I love about this is that you're marrying those two together in a way that it's, you know, it's like you you're looking at what are your values? And what are your priorities to create a new life, right? It's not just about looking at a budget. It's about saying how do I want to live my life going forward? So in a way, this is, in a very strange way kind of an opportunity, right to recategorize things?

Hersch Serman

Absolutely a huge opportunity. And if you think about what we've spoken through, you actually have a real solid framework of your strategy, you've got your values, you know what you want to keep more, you know, your top line where you want to start on your negotiation. And you know what, you can't go below. Now you're pushing for somewhere in the middle to upper half of that, obviously. But it really is the outline and the infrastructure of your financial strategy.

Karen Covy

But that and that is brilliant, because that's something people don't I don't think they fully appreciate and you know, they know conceptually Yes, I need a strategy to negotiate, but they assume that their lawyer will have that strategy for them. And we'll know that. But but that's not as we both know, that is not always the case and the lawyer to a certain extent, I mean, they're not going to know what makes your spouse tick. They're not going to know what his or her priorities are, they'll be lucky if they remember to ask you what your priorities are, right. So the fact that you're doing the work and putting yourself in the driver's seat, and creating this strategy is I think, brilliant,

Hirsch Serman

I appreciate that I find the feedback I get from working this way with clients is tremendous. And, you know, I want to point out a lot of people, especially when you are so emotional, they're not always sure what their priorities are. And sometimes they identify things. And they change and think, how do my values change? That also is because we see, we kind of if we do the right work, I should start with that. And we really do the introspection and speak to the right people, we start to unearth, it's like, as I say, peeling away that you know, the layers of the onion, we really do on Earth, a lot of pieces that were missing in our life that we either gave up, or we compromised on or now we're discovering again, like, oh, I, I forgot I that's an important piece of my life, because I haven't done it in 10 years.

Karen Covy

Yeah. And it's a beautiful, so divorce. I mean, there's, there's not a lot of good that can be said about it on the one hand, but on the other hand, if you can reframe it, and like you said, use this as an opportunity to reprioritize your life, it can be awesome. And I really like your idea of using values to make decisions about how do you settle your divorce case? How do you what matters to you? What do you need? What do you what do you not need, I go through a similar exercise with my clients, you know, straight out of the gate, because by making values based decisions, you have a much better chance of ending up at the end of your divorce in a place you really want to be instead of wherever you ended up, right? So it sounds like that's what you help your clients to.

Hirsch Serman

Very much. And the other piece to it is, it's so easy to go down a million rabbit holes. Because there are so many distractions, or so many things that that are happening during the divorce, it keeps you quite focused in way you need to have those discussions. And if it's, if these are not your priorities, there's no need to spend a tremendous amount of time or effort for exploring those areas, because they're not going to be part of your life later. If you've identified them as non, you know, only, you only want your values as part of your life. And so it really does help you direct the conversations and keep a lot more.

Because when you may be when you're under stress, emotional scared, and everything else that really can derail a lot of the discussion.

Karen Covy

You know, that is, that's so much of a key as well, because divorce, let's let's be honest, it's overwhelming. It affects so many areas of your life. And there's so many balls that you feel like you've got to keep juggling while you're going through a divorce, to not let yourself go down a rabbit hole that you don't need to go down is huge, because you've already got a lot of other things to do and to worry about and to think about and not chasing your tail. Really, you know, it seems like it goes back to that point that you made about focus and helps keep you focused on what matters, focused on your values so that you can make better decisions as you go through the process. Right.

Hirsch Serman

Absolutely. I think the other piece I'm sure you've heard this is I've had clients will come to me in the middle of the process ago. I have no idea how we got to this point. And you're saying, Tell me more. And really, it's because they were, you know, going blind in many ways, they really didn't have a focus. They were speaking about the normal things, but they weren't really focusing on them. And their life beyond divorce. And so they were talking things that were not talking values in life. And that's a big difference.

Karen Covy

I think that's a huge difference in the way you work with people and approach divorce, as opposed to some other people who I've talked to who just it's like you're waiting for the next thing. For example, with lawyers, there is a very defined legal process that every divorcing person is going to have to go through and there are certain steps that you have to get through to get from point A to Point done right. And that's all for fine however, you can get through all of those steps without ever taking the time to create a strategy for how you want to do it. People go through it without having a plan or a strategy. And they wonder at the end, as to your point, how did I get here? Right? And it's so important to do the work to do the preparation to do the planning that it requires to get to the place you want to be, instead of Well, yeah, I don't know how I ended up here. But here I am. Right. And, and I think that your own personal journey with divorce probably helped inform how you created this approach. I mean, or maybe, maybe I'm miss speaking, how did your personal journey, like work its way into the things you do now? Right?

Hirsch Serman

So I, I've been a finance guy, my whole career, I've been a CPA over 20 years. And I went through a little over 10 years ago, I went through three life cycles that were major life cycle, they all happened in about 20 months. You know, running through the very quick was, my mom and dad were on vacation, my dad walked out of the bedroom where they were saying he had a heart attack, and he passed away. And my mom had never literally never paid a bill in her life. And she was so lost, and paid some twice and pay others what's his direct, they taking stuff out of my bank account, like, she had no idea as the dust was settling on that. And I should just a quick shout out to my brother, he took over the finances, I can't even imagine the stress. My mom was feeling every time she had to pick up a checkbook. You know, I went through my divorce shortly after that. And everyone was speaking finances and kids. And at the end of my divorce, we were looking at putting my mom into assisted living. And I realized which by the way, is a whole financial adventure of its own. And I actually work with people helping them there a little bit. But my focus is really divorced. And it's so interesting to me, because we teach our kids you know how to change a tire how to cook a meal, how to do our laundry, we don't teach our kids, or we don't have the schools teach our kids how to manage their daily finances. And I think these three major life cycles all in such a short period of time was such a light bulb. And during my divorce, I was working with people helping them. And I was like, wow, it is such a need for this. And that that really was what it was. And I'll tell you it's funny, because I have a radio show. I've got an MBA and CPA, CFA, I've been doing this for 10 years, and all the rest that comes with it. And yet I tell people, I've been through a divorce and all of a sudden I've got street cred, everything else does not matter. It's all of a sudden, oh, you know what I'm talking about?

Karen Covy

100%. But you know, what you said is so, so interesting. And I think I you know, I could ask the question, but I think I'm getting a little bit of insight into why your company is called Lifecycle Financial.

But that's a good point. You know, it's not just about divorce, that's the area that you tend to focus on. But to your point about your mom, I mean, a death of a spouse, when you've never paid a bill is terrifying. You're going through many of the same things, and you still don't understand personal finance. So, you know, the ability to make financial, I mean, we're not even up to make financial decisions. It's just how do you pay the bills? Right? And people don't think about that. But even at a very, very basic level, you've got money coming in every month, and you've got to pay the bills, you know, going out every now every month, you have to decide, well, what gets paid when it gets paid? What you know, if there's not enough money at the at the end of the month, what doesn't get paid? And you're you're making really important financial decisions. With as you mentioned, most people they have no background in that they have no training in that. How are people supposed to learn this stuff?

Hirsch Serman

So I'll tell you exactly what you're saying resonated with me. So, so early on in when I was working with people that I actually created a program called Who am I financially? And it is because of exactly what you said people are really in many ways clueless. And I don't mean that insultingly they have you know when you're married, you kind of divide and conquer, I'll take the finances. You take whatever it might be, and so we don't look at you know, the ex spouse since then when he doesn't know what she doesn't know how to cook. That's never an issue of the finances. You know, we tend to harp on. Now admittedly, you not gonna be able to cook anything if you don't have money in the bank account because you can't buy the food. But the idea behind the program was really, it's four modules, you can do one, you can do all four. But number one is the budget that we spoke about, and whether you getting divorced, whether you've lost a loved one, it doesn't really matter. Having a budget is an important thing, much easier to spend money than earn money. So we should understand where that money is going. That's number one. Number two is your net worth, we don't really have a full sense for it, especially if we've never been doing the finances. You know, we'll say, Oh, my house is worth $750,000. Okay, it's worth several 150,000. But you owe 500,000. So it's not really a $750,000 house for you, you know, but understanding that net worth, what is liquid like in a bank account versus tied up in your own? Or maybe in a retirement account? What's the difference between a Roth and a traditional IRA, and that there are very big differences, potentially, especially with the tax impact. So that's another piece is really understanding the network. I have a bill paying module and part of it like he was saying, how do you prioritize what are the priorities in your bills? And then the last one is if you have debt working with you and helping you eliminate debt.

Karen Covy

That sounds brilliant. And it's such that there is such a need for that. I think, because until you understand all of that UK, people talk about I want to be financially free, right? Well, you can't be financially free if you don't first understand how money works, and then make it work for you. So it sounds like this would be something not just for people who are dealing with a major life cycle change, but pretty much for anyone, right?

Hirsch Serman

Yeah. Oh, absolutely. It's definitely something anyone could work with. You know, I, it's funny, you say that, actually, because I, I have a client who was getting divorced, she was 63, her daughter was 38 years old. And her daughter, she referred her daughter to me because she knew her daughter to understand how to manage your finances. And her daughter had just inherited $50,000. And she was so proud to tell me, You know what, I have put that $50,000 in a four and a half percent CD, which is one and a half percent a year ago was a solid rate of return. But when she told me she had about $30,000, in credit card debt, she didn't understand, she was paying about 21% on the credit cards. So that 50,000 were really the 50,000, she could have used to pay off the credit cards, was actually costing her 15%. The difference in what you pay is what she earns one. But more than that, as opposed to the you know, the idea of I'm learning four and a half percent. So she was excited that she had made a good decision on the interest rate. Unfortunately, in the larger picture, it was not necessarily the right move. And she could save yourself a tremendous amount of interest. You know, when you paying 21%, that's for the year. You know, it's about $6,000 that she was paying in interest.

Karen Covy

Yeah, that is a big deal. And it's, you know, to your point, it's about looking at the big picture, looking at everything that's going around going on in your life, whether that you're talking about personal finance, whether you're talking about divorce, whether you're talking about dealing with a death, it's like if you look at anything with blinders on, you're not luck is likely to make the best decision overall, it may be the best decision in the vacuum. But in the bigger picture, maybe not so much. So this is Hirsch, this is fascinating. I mean, there's so many aspects of decision making and financing that are so helpful for so many people. I could talk to you forever. But I know we are, you know, on a limited time schedule here. So I want to wrap it up. But I want to ask you one question. And I apologize if I'm putting you on the spot. But I'd love to ask all my you're laughing at me now. I'd like to ask this of all of my guests. So what is one of the most difficult personal decisions that you've had to make over the course of your lifetime? And how did you do it?

Hirsch Serman

The first day I can say this, this is good payback, because I'm sure when you've been on my radio show, I've put you on the spot, so don't feel bad about it. I think, you know, I think the biggest one was after or during my divorce really taking an entirely it's HUGE step back and saying, Do I want to take my business in a very different direction? You know, I was in my mid 40s I was doing small business consulting to people who were doing fantastically well, but had no idea how to actually run a business. They just happen to do very, very well. And I helped them learn how to run a business. And I was now going from that level to work with individuals going through extremely vulnerable life cycles. And I think that is probably at least the last 20 years, the hardest or largest decision that I've really had to make. And I think it's the best decision I've made. Because I absolutely love what I do. I don't think I'm that typical, cold, heartless MBA, CPA, CFA, I do come with some compassion. But I love being able to wake up and take people who are in vulnerable situations in difficult situations, and help really give them insights that are gonna help them and and not just during the next six months or a year during the divorce but way beyond.

Karen Covy

Absolutely, absolutely. That is so key. And that's a whole nother area. I'll have to have you back on the podcast later that we can talk about which is making decisions when you're in such a vulnerable state when you're not you know, you're full of emotions, and you can't perhaps think as clearly as you'd like to think that's a whole nother topic. But we will get to that right now. Why don't you tell people where's the best place that they can find you?

Hirsch Serman

The best place to find me is probably on my website. It is the name of the company There is or .net at the end, it's just, like the company.

Karen Covy

That is awesome again, Hirsch, thank you so much. This has been such an instructive and helpful conversation. And for all of our listeners. If you like what you're hearing, please hit the Like buttons, hit the subscribe button, and we'll talk with you again the next time. Bye for now. Thank you so much. This has been great.


divorce advice, divorce financial planning, divorce tips, off the fence podcast

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