Finance post-divorce: what’s your next step?

Sometimes, life takes unexpected turns and one might choose to part ways with the partner once believed to be the one. However, there are also implications on your finances that can make the process even harder, 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 situation

If have been managing your finances jointly until now, you must work out where you stand as an individual – what you will be earning as of this point onwards and what assets you will have.

Dividing up the household, wealth planning for housing and associated costs is undeniably a priority, as both of you will no longer be living together. Another matter to consider is tax, as not all assets are created equal. If one of you keeps the family home while the other choses an investment property for example, you must keep in mind that the family home will be free of tax in the event of a future sale while the investment property will include capital gains tax. It can be a smart move to ask for professional advice before deciding who gets what.

Legal advice

It is usually recommended to seek legal advice to have a clear idea of each individual financial and legal situation.

Protecting your finances

Initiative is key to protect your finances, to make sure you are indeed the one controlling your money. Refer to the government’s MoneySmart website¹ for some helpful tips to consider.

Retirement options

For senior couples, super is usually their most significant asset outside the family home. As a result of the divorce settlement you could possibly 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.

Your most important asset is your health

Change can be hard, but it can also lead to better and happier life. Give yourself as much time as you need to adapt to this new life, and do not forget: new exciting things are awaiting for you, make them happen!