Divorce can be an exhausting process, not just emotionally but financially. As you move on to your next chapter, it’s crucial to establish a solid financial foundation for your future. Let’s explore how you can regain control and rebuild after the storm.
1. Untangle your finances from your previous partner
The first step in reclaiming your financial independence is to split your joint financial ties. This means canceling shared bank accounts and credit cards to prevent any issues in the future. It’s also important that you are monitoring direct debits. Ensure you’re not caught off-guard by forgotten automatic payments by reviewing past bank statements. This process isn’t just about separation; it’s about setting the stage for your new financial identity.
2. Seek legal advice
Legal advice is invaluable, particularly if you weren’t the primary manager of finances during your marriage. A lawyer will support you in clarifying your rights and obligations, providing a clear understanding of what lies ahead. With expert advice, you can navigate the legal complexities of divorce with confidence.
3. Divide your assets and property
Property division is often the most complex aspect of a divorce. You may choose to sell shared assets and split the proceeds which may offer a clean break. Alternatively, one party could buy out the other which requires refinancing the mortgage to reflect the change in ownership. If you can’t reach an agreement, you might have to apply for a financial order. This is an order made by the court laying out how property should be divided, after taking into account your unique circumstances.
4. Revise your will
Your will requires updating after a divorce. This includes updates to your beneficiaries and executors to ensure your assets are distributed according to your current wishes. Aside from your will, you should also consider updating Powers of Attorney, Advance Care Directives and Enduring Guardianship. Ticking these important considerations off your list means that your assets and your loved ones will be in safe hands when you are no longer here.
Learn more about updating your will with the team at APS Wills & Estates.
- Review your beneficiaries for super and life insurance
Life events like divorce mean it’s time to review your superannuation, funeral benefits and life insurance. We recommend checking beneficiary designations to ensure they align with your new circumstances. Adjustments here can prevent future complications and ensure your wishes are honoured.
6. Start building your savings
Finally, focus on rebuilding your savings. This is your safety net, your springboard into the future. Start small if you need to, but start now. Every penny saved is a step towards financial resilience and independence. If you are unsure about your financial plan, working with a Financial Planner will give you peace of mind about strategies that are right for your family and your future plans.
While divorce can shake the foundations of your life, it also presents an opportunity to build a stronger and wiser financial future. With careful planning, legal guidance, and a proactive approach to your finances, you can emerge from this experience with a sense of empowerment.
Learn more about APS Financial Planning.
Written by APS Senior Financial Advisor, Paul Hatzigeorgiadis.
Paul has over 25 years of experience in the financial services sector. Over Paul’s history, he has provided advice to an extensive range of clients from wealth accumulators to pre and post retirees advising them on Wealth Creation, Cash Flow Management, maximising Centrelink benefits in Retirement, Personal Insurances, Debt minimisation strategies and Superannuation. Paul is married with an 12-year-old daughter and enjoys spending time with family and friends. Whether it’s assisting clients to meet their short-term goals or working with them over a longer term, Paul enjoys helping guide his clients with their financial future.