Navigating divorce or financial separation

Divorce or Financial Separation can be one of the most stressful and financially challenging periods of a couple’s life, and although at the outset things may seem calm and agreeable, as the reality of the split starts to solidify and the finer arrangements are discussed, emotions can often blur the ability for rational discussions in an effort to find an equitable financial outcome.

This is where a trusted financial adviser can be a valuable asset who will step in and assist in collating and assessing the financial assets and debts, whilst also considering the multiple other factors that are part of the complex division of two people’s lives.

A Financial adviser can help navigate the following areas to transition a client through the oftentimes rocky waters into the post-settlement stage ensuring they have a good foundation to be in a position to rebuild and meet their long-term goals.

The below are ways in which a licensed and qualified adviser can assist:

1. Asset & Debt Division

Financial advisers help identify and evaluate all marital assets and liabilities including real estate, investments, superannuation accounts, and debts. Additionally, we also assist in ensuring a fair and equitable division of assets and debts, as we have good knowledge of how these are usually assessed in a variety of different situations. We can work with your Family lawyer to ensure a fair outcome.

2. Cashflow & Budgeting

Advisers help create a realistic pre and post-divorce budget, taking into account changes in income, living expenses, eligible family tax benefits, child support and financial obligations to help clients maintain financial stability.

It is often important to note that banks may lock joint accounts during a dispute or if there is unapproved activity on an account.

3. Superannuation Splitting

Financial advisers review the division of superannuation accounts, ensuring compliance with the superannuation laws and help reassess retirement plans and goals to ensure continued financial security in retirement.

4. Tax Position

Things to consider:

• The tax implications of asset division such as the timing of the sale of assets (does the separation need to be positioned across two financial years).
• Working with your accountant to wind up any businesses or entities, assess any business or UPE loans and clear all business related debts.
• Ensure the transfer of titles of properties is implemented and debt is managed or discharged.
• Changes to spousal status when lodging ITR’s.

5. Insurance Needs

Your adviser will review existing insurance policies, including: life, TPD, critical illness, income protection and business expense cover to ensure adequate coverage post-divorce/separation as well as update any beneficiaries (We often find clients have their ex-spouse listed as the beneficiary on super and insurance policies years after divorce).

6. The Rebuilding Process

Advisers help clients reassess and redefine their financial goals and objectives in light of their new circumstances and assist in rebuilding the individuals position.

Financial advisers often collaborate with other professionals, such as family lawyers, mediators, accountants and therapists, to provide a comprehensive support network.

They offer emotional support and reassurance, helping clients navigate the financial complexities of divorce to rebuild with confidence.