Navigating Divorce: The Vital Role of Financial Advice

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Navigating Divorce: The Vital Role of Financial Advice

Written by: Chris Graham l Advisory Team


Divorce can be an emotionally challenging and financially complex process.  As couples untangle their lives and separate their assets, seeking professional financial advice becomes crucial.  Making informed decisions during this time can set the foundation for a secure and stable financial future.  In this article, we will explore the importance of financial advice for clients going through a divorce and highlight key considerations to keep in mind.

Financial Planning For Understanding the Financial Implications

Divorce entails a significant reshuffling of assets, liabilities, and financial responsibilities.  A divorce settlement involves the division of property, superannuation, investments, and potentially ongoing spousal maintenance.  It is imperative to have a clear understanding of your financial position, both individually and as a couple, to ensure fair and equitable distribution.

A qualified financial adviser plays a vital role in helping clients navigate the complexities of divorce.  They provide objective guidance, knowledge, and expertise tailored to the unique circumstances of each client.

A financial adviser can help you assess your current financial situation, including assets, debts, income, and expenses.  This evaluation will help to determine your financial needs and objectives during and after the divorce.  Furthermore, developing a comprehensive financial plan during and after a divorce is essential to regain control of your finances and secure a stable future.  Engaging a skilled financial adviser can provide invaluable guidance throughout this process.  They will work closely with you to evaluate your income, expenses, debts, and assets, taking into account the changes resulting from the divorce.

With this information, they can help you create a realistic budget that aligns with your new financial circumstances and goals.  A financial adviser will also assist you in identifying potential financial risks, such as hidden debts or inadequate provisions for future contingencies.  They will collaborate with you to establish financial objectives, develop an investment strategy, and provide ongoing support and guidance to ensure your financial plan evolves as your needs change.  By creating a robust financial plan, you can navigate the challenges of divorce, make informed decisions, and establish a solid foundation for your financial well-being post-divorce.

Superannuation Considerations + Property Division

During and after a divorce, superannuation considerations plan an important role in securing your long-term financial well-being.

Superannuation, or retirement savings, accumulated during the marriage is considered a joint asset and subject to division.  It is important to engage a financial adviser to navigate the complex rules governing superannuation splitting.  They can help you assess the value of your superannuation, understand the options available for splitting or transferring funds, and ensure a fair division that aligns with Australian superannuation laws.  Moreover, post-divorce, reassessing your retirement goals, adjusting investment strategies, and developing a new retirement plan becomes essential to adapt to your changed circumstances.  By seeking professional guidance, you can protect your superannuation assets, maximise their potential, and secure a stable financial future for your retirement.

Want to know more about what happens to your superannuation in a divorce?  Check out this article we have previously put together: What Happens To Superannuation In A Divorce?

Property and asset division outside of superannuation is also a significant aspect to consider during and after a divorce.

The division of property as assets is governed by the Family Law Act 1975, which follows the principle of a “just and equitable” distribution.  Seeking the guidance of a financial adviser can be invaluable during this process.  They can assist in identifying and valuing marital assets, including real estate, investments, vehicles, businesses, and personal belongings.  A skilled financial adviser can help you navigate the complexities of property settlement negotiations, ensuring a fair and equitable division that considers factors such as financial contributions, future needs, and non-financial contributions.  Post-divorce, it is crucial to reassess your financial goals and adjust your investment strategies to reflect your new circumstances.  By working with a knowledgeable financial adviser, you can navigate property and asset division with confidence, protecting your financial interests and laying the foundation for a stable future.

Ongoing Financial Advice

Receiving ongoing financial advice during and after a divorce is vital to navigating the complexities of your changing financial landscape.  Engaging a trusted and experienced financial adviser can provide continuous support and guidance throughout the process.  They will help you understand the long-term financial implications of decisions made during the divorce, such as property settlements, asset division, and superannuation arrangements.  Furthermore, a financial adviser will assist you in adjusting your financial plan to reflect your new circumstances and goals post-divorce.  They can provide insights on managing cash flow, optimising investments, and planning for retirement or future financial objectives.

Ongoing financial advice ensures that you stay on track with your financial objectives, adapt to changing circumstances, and make informed decisions that align with your long-term financial well-being.  With a dedicated financial adviser by your side, you can navigate the challenges of divorce and build a solid financial foundation for your future.

Financial projections and tax planning are also critical considerations during and after a divorce.  Engaging a financial adviser can help you develop accurate financial projections that reflect your post-divorce circumstances.  They will assess your income, assets, liabilities, and expenses to provide a realistic picture of your financial situation.  Additionally, they can guide you through tax planning strategies that minimise potential tax burdens resulting from the division of assets and changes in your financial status.  Understanding the tax implications of various financial decisions, such as property settlements or superannuation splitting, is important for optimising your tax position.  A skilled financial adviser will ensure that your tax planning aligns with Australian tax laws, maximising your financial outcomes and providing a solid foundation for your future financial stability.

The Importance of Early Engagement with a Financial Adviser

Engaging a financial adviser early in the divorce process can provide significant benefits.  By obtaining professional advice at the outset, you can make informed decisions that may positively impact the outcome of your settlement.  Early involvement allows for a comprehensive understanding of your financial situation and provides an opportunity to consider long-term financial implications

Canny Advisory + The Financial Advisory Services You Need For Your Financial Future

Divorce is a life-altering event that requires careful attention to financial matters.  Seeking professional financial advice throughout the divorce process can alleviate stress, ensure equitable distribution of assets, and set the stage for a secure financial future.  Engaging a knowledgeable and experienced financial adviser can provide the guidance necessary to make informed decisions and achieve long-term financial stability post-divorce.

Get in touch with our team to have a chat about how we can help you now, to plan for your post-divorce financial future security.

Canny Advisory Financial Adviser Chris Graham stands centre in the photograph wearing a deep blue suit, holding his hands on the edges of his jacket

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