By Lynette Murray, Platinum Adviser
Unfortunately, financial advisors are normally only consulted after a divorce when people are trying to rebuild their lives. However, it makes more sense to consult someone who can explain the financial implications of certain decisions before you make any commitments.
If you had to ask financial planners what they would suggest for anyone going through a divorce, they most likely would raise the following:
- There are no ‘do-overs’ in a divorce
Although you may want to get to a resolution as quickly as possible so you can move on with your life; you have to remember that there is no ‘do-over’ in divorce. Every day may feel like an uphill battle and you may just want to give in to get it over with, but you need to keep in mind the long term consequences of any decisions you make.
- Picture your life after accepting an offer
Make very sure you understand what one settlement offer over another will be like in real terms. Very often one party will push for ownership of the family home over liquid assets, especially if there are young children involved. Take time to think about what this means – a house comes with maintenance costs, rates and insurance. In contrast, shares may grow in value and pay dividends. There are also different tax liabilities associated with different assets. A financial planner can help you picture what your life will look like under different scenarios.
- Don’t let the divorce become all-consuming
Even with divorces that are fairly amicable, it can seem as if everything in your life revolves around the divorce. Emails, messages, lawyers, mediation, paperwork – it seems to be never-ending. Make sure you still carve out some time to do those things that give you pleasure. Divorce is a marathon not a sprint and it can wear you down both physically and mentally.
- Get support
The kind of support you need will vary depending on your personal situation. For a stay-at-home spouse you may need assistance to find work. If you haven’t been involved in the financial running of the household, you may require additional financial advice. If you are suffering from depression and anxiety, see a therapist. Besides the experts that can help you, don’t underestimate how important it is to ask for help from family and friends. They can provide both practical support like meals and babysitting, but also emotional support during this very stressful time.
- The devil is in the detail
There are a number of things you can do to protect your finances, for example: close off your joint accounts; cancel the redraw facility on your mortgage; update your utility bills and rental agreement; think about cancelling joint credit cards; and do a stocktake of your assets and any joint debts you might have. There are some great online resources on ASIC’s Moneysmart website for people going through divorce https://www.moneysmart.gov.au/life-events-and-you/life-events/divorce-and-separation