Splitting up? Act now to avoid surprises later on
Whether you see it coming or not, divorce usually ranks as one of the most devastating events in a person’s life. It’s an emotional time but also one when important financial decisions have to be made.
Removing emotion from the equation and focusing on being practical with your finances is of course much easier said than done, so here are some important steps to help you avoid a serious dose of financial upset.
Instinct might be telling you to keep the lawyers out of it but it’s crucial to get advice from the professionals and get it early. You need to arm yourself with as much knowledge as possible around the process and your options.
Now is the time to think about where your future income is going to come from. If you’re likely to receive assets in the settlement, what sort of income will they provide and are they worth keeping? A large family home may have a lot of value but it produces no income – a smaller residence with residual cash to invest may be a better option.
And don’t rule out renting. While it’s something you may not have thought about since your younger days, renting can be the answer while you get back on your financial feet.
If you’re not working, do you need to think about getting back into the workforce? This might be tough for some, especially if young children are in the mix. It’s also worth investigating whether you’re entitled to Centrelink support.
It’s a good idea to do a general financial health check, including a spending plan. Knowing exactly what you can – and cannot – spend will help keep you on the right track.
Rules around the impact of divorce vary from state to state, but you need to take a look at your estate plan, especially your will, as you may need to draw up a new one.
Take the time to review your superannuation. How much do you have and is it enough? This is especially important for women who on average have much lower super balances than men. And don’t forget to check who is the nominated beneficiary on your super account as you may need to change this.
It’s a good idea to finalise any settlement formally so there are no surprises in later years.
Contact me today to discuss further