Ignoring this person during a divorce could cost you a small fortune

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The marriage is over. Among the first people you turn to are those likely to give emotional support – family or friends – followed by a solicitor. And that’s all fine, up to a point.

When you’re trying to make sense of a world that may not make any sense right now, legal advice is understandable. Lawyers know the law. They will guide you through any legal issues that need dealing with, particularly where children are concerned. They are great at legally drafting what you need to close your property settlement and your divorce and can advise you on likely entitlements under the Family Law Act.

What lawyers aren’t authorised to do

But they don’t have all the answers to all your needs going forward. No one does! And lawyers are not authorised to give financial advice which is needed before any negotiations of a property settlement are even whispered.

A licensed financial adviser with divorce planning expertise can scope a client’s goals and values, assess assets in a settlement pool that could best work to achieve those goals and provide realistic options and easy-to-understand calculations of what a good (and bad) asset split could look like and mean, providing a base for informed negotiations.

‘Good deal’ unmasked

Let’s look at the case of Liz, a client who came to see me, believing she was getting a ‘good deal’ in a divorce asset split. Liz had worked out her settlement as many do: offsetting her superannuation for his superannuation; the investment assets for the family home; his car for her car and so on.

I see that a lot: it’s relatively typical but not true. When I analysed their assets—the jointly owned home, rental properties, shares, managed funds and other assets—there was a discrepancy in excess of $200,000! The deal also failed to consider Liz’s needs now, what she could afford or how she could achieve long-term goals.

Why women don’t get financial advice

Liz’s case is not unique. I was just glad she sought professional financial advice before signing up for her slice of the asset settlement pie. Few women do seek such advice, something I investigated while researching my master’s degree in financial planning (I’m among just 1% of financial advisers in Australia with post-graduate qualifications in the field).

I found that many women did not see the financial planning industry as relevant to them—it was only for ‘the rich’—and were wary of its male dominance, feeling overwhelmed, intimidated even, by figures, charts and jargon.

Interestingly, women in executive roles were more confident and savvier about seeking advice and putting that advice to work. This general disconnect doesn’t help when research also shows women are consistently more concerned or anxious than men on seven key financial matters: having enough money for retirement; paying for normal healthcare; paying normal monthly bills; paying the rent or mortgage; making minimum payments on credit cards; paying costs for a serious medical incident; and maintaining their current standard of living.

Team Divorce

My research revealed that what mattered to women wasn’t so much dollars as lifestyle, now and into the future. Women are geared to security. At times like separation and divorce, there are a lot of unknowns. Assembling a trusted team to deal with legal, financial and emotional aspects of life can help you get back on your own two feet:

  • Family law specialist
  • Licensed financial adviser
  • Estate planning lawyer
  • Counsellor
  • Accountant
  • Best friends
  • Family supports

Sometimes the support you need isn’t always professional. No one person knows it all. A team approach ensures that individuals’ weaknesses are overcome by others’ strengths. Gather the right team around you.

Save yourself a small fortune

About the author: Helen Baker, pictured, is an Australian financial adviser and founder of On Your Own Two Feet. Her latest book On Your Own Two Feet Divorce: Your Survive and Thrive Financial Guide is available now at www.onyourowntwofeet.com.au or in book stores and Amazon.

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