Jason Calleja
Jason Calleja

Senior Financial Adviser


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How a financial adviser can assist during separation and divorce

When it comes to separation and divorce, couples are plunged into the overwhelming situation of having to make decisions that will affect themselves, their families and their dependents, all while dealing with the emotional process of untangling a life together.

Like with all big transitions, there is no clear path ahead and no idea which decision is best for everyone involved.

While it has, thankfully, become normal to seek legal counsel during this time, many still overlook the key role of financial advice in divorce or separation proceedings. This can have major unintended consequences on your financial position in future.

I spoke about this in detail in an interview with Collaborative Practitioner and Partner at Nicholes Family Lawyers, Bec Dahl on her podcast.

If you or someone you know is grappling with these decisions, I invite you to click below to listen to this episode. It is 23 minutes long and contains some good insights that might be very useful to you at this time.

If you are unable to listen to this now, I'd like to highlight 3 points that came up during this chat.

  • Divorce is a financial settlement as much as a legal settlement

It's important that your lawyer and financial adviser work together to understand the implications of each other's advice so they can determine what's best for you.

Consider this scenario: You want to keep the family home for its sentimental value and to give your children a sense of security and stability.

Your lawyer fights hard and you get the house. However, you may have just signed up for crippling debt and ongoing payments of rates, upkeep and repairs, not to mention being physically tied down.

A financial adviser would look at your income, debt, insurance, superannuation and investments to get an idea of your situation. They'd then take the time to understand your goals, before finally giving you advice and a roadmap on how best to achieve those goals.

In the above scenario, selling the family home and receiving a lumpsum payment could mean enough money to address your short term needs like renting a smaller home, medium term needs like taking short breaks to relax with your children, and longer term needs like topping up your super.

All these would go a long way towards the life of security and stability that was your original goal.

  • Engage the services of a financial adviser early on in your divorce process

When is the right time in a separation or divorce process to seek financial advice?

I've had many people come to me only after their settlement amount comes through. The thought behind it is probably, 'I have this money, so I'll seek financial advice.' But is this the amount you should have settled for based on your expenses and financial goals?

The ideal time to engage the services of a financial adviser is before negotiations begin and certainly before settlement. Arming yourself with all the information early on puts you in the best position to be able to go into those negotiations and get the outcome that you want.

Having said that, if you've gone though settlement etc, there are still some important decisions to be made, so don't feel like it's too late to seek financial advice.

The truth is, life will always throw us curve balls, good and bad. So the best time to seek advice is always 'now.'

  • Seeking financial advice will give you calm and confidence

I was once told by someone seeking financial advice for the first time, that the lead-up to meeting me made them feel nervous like they were about to visit their dentist. I assure you, seeking financial advice is nothing like getting a dental procedure done. Though you will probably enjoy a similar sense of relief and confidence after the visit.

We often compare our lives with others' and assume they're doing better than ourselves, or are financially more savvy and disciplined. The truth is, everyone has their own strengths and weaknesses.

Going to an adviser can be liberating! It's a great relief to get everything out in the open and really understand where you are at with your finances. You may just learn that you're in a better position than you feared.

Having the peace of mind that comes from being supported by an expert that has your best interests at heart will give you the confidence you need to make the difficult decisions that are called for during this time.

Don't go it alone. Reach out to me for a chat.

Get the right advice during your divorce

General advice disclaimer: This article has been prepared by FMD Financial and is intended to be a general overview of the subject matter. The information in this article is not intended to be comprehensive and should not be relied upon as such. In preparing this article we have not taken into account the individual objectives or circumstances of any person. Legal, financial and other professional advice should be sought prior to applying the information contained on this article to particular circumstances. FMD Financial, its officers and employees will not be liable for any loss or damage sustained by any person acting in reliance on the information contained on this article. FMD Group Pty Ltd ABN 99 103 115 591 trading as FMD Financial is a Corporate Authorised Representative of FMD Advisory Services Pty Ltd AFSL 232977. The FMD advisers are Authorised Representatives of FMD Advisory Services Pty Ltd AFSL 232977.