When clients have experienced Financial Advisors assisting them it makes my role simpler and saves then time and money. With respect to Property Settlements separating clients can be greatly assisted by a Financial Advisor:
- ensuring that assets and liabilities are identified, and
- evaluating all the options for allocating resources and assets between the parties.
Fear About Finances
As a Family Lawyer, I’ve learned over the years that fear about finances is significant for almost all people who are separating, be it concern over their current circumstance or their future needs (both real and imagined). As such I recommend that clients seek out the assistance of a Financial Advisor prior to or as part of their negotiations, not after the settlement has been finalised.
Forward Planning
We recommend all of our clients seek appropriate advice from a qualified Financial Advisor at an early stage after their separation. In my experience, good Financial Advisors are able to assist clients to move on more easily after separation through planning based on the answers to questions such as:
Can I afford to move out or afford to stay if my ex does?
- How much money will I have each month and how do I spend it?
- How much superannuation should I have?
- What should I do with the assets I have?
- What tax implications might come with any properties or investments in a property settlement?
- What about retiring now? Because I have separated and we have divided our assets, when can I retire and what can I expect to live on in the future?
- Who should be the beneficiary of my Superannuation and Personal Insurances.
Financial Advisors and Family Lawyers will generally need to work together to ascertain what a client’s entitlements to Child Support and/or Spousal Maintenance and Property generally might be for the Financial Advisor to be able property give advice in relation to financial outcomes and budget planning.
I prefer to work collaboratively with a Financial Advisors as part of the divorce process. To me it simply makes sense and allows my client to make more informed settlement decisions while under pressure. It is certainly much more productive than trying to make the best of a situation after a settlement when there is no opportunity to do things differently.
Children
Where a divorce involves children, Financial Planners are able to give my clients an accurate snapshot of their current budgeting to ensure that I am able to assess their future needs and ensure that those needs are adequately provided for. It is important that clients are aware of their budgets and are able to identify what they have spent on the children in the past, what they can afford to spend in the future, and where those resources might come from. This is very different from focusing on a Child Support Assessment from the Child Support Agency.
Property Settlements
I am often asked for, but am unable to answer, advice about what assets a client should take and how they should use those assets after they have separated. This is particularly when a Financial Advisor is needed. The Family Lawyer’s advice may involve specific advice about percentage entitlements of each party in a property settlement and about how much money one party should pay the other. However, that advice can never extend to recommending to a client what type of asset should they retain and how should they spend their money when they separate.
