There’s no doubt a divorce takes a toll emotionally. However, there are also financial implications that can leave you feeling vulnerable, especially if you’re retired or approaching retirement.
So, what are some of the things you can do to take control of your finances if your marriage ends?
Understand your position
If you’ve been managing your finances jointly until now, you will need to work out where you stand as an individual – what you’ll be earning from this point onwards and what assets you will have.
Dividing up household wealth Planning for housing and associated costs is obviously a priority, as both of you will need a place to live. Another issue to consider is tax, as not all assets are created equal. If one of you is keeping the family home while the other takes an investment property for example, you need to bear in mind that the family home will be tax-free in the event of a future sale while the investment property will attract capital gains tax. It can be a good idea to seek professional advice before making any decisions.
Taking legal advice
Obtaining legal advice is recommended so you can be very clear on where you stand both financially and legally.
It’s important that take proactive steps to protect your finances, ensuring you’re now the one in control of your money. Refer to the government’s MoneySmart website1 for some helpful tips to consider.
For older couples, super is often their second biggest asset outside the family home. As part of the divorce settlement it may be possible to obtain a share of your partner’s accumulated super balance. If you’ve reached Age Pension age (currently 65.5), the reduction in your total assets could mean that you now qualify for a full or part Age Pension. Whatever you decide to do, it’s recommended you seek professional advice first.
Look after you
Change can be frightening, but it can also be empowering and freeing. Take the time you need to acclimatise to the change, and trust that the future holds bright new things for you.
1. ASIC MoneySmart https://moneysmart.gov.au
Source: MLC Asset Management