Getting Through the Financial Fall-out After Separation
In most cases, both spouses’ standard of living plummets in the first few years after the divorce. Why? Because the same total income and assets must now sustain two families rather than one. Unfortunately, most people are neither financially nor emotionally prepared for this outcome. So, what can you do to better prepare for this impending doom? The answer is straightforward, but it is difficult to put into practice.
Divorce is an emotionally draining experience. Being proactive and in control can help ease some of the tension. Here are the “Lucky Seven” things you may do to help plan for your financial future after your divorce.
When a relationship ends, your income and spending are likely to shift. When one household splits into two, it’s common for costs to rise while income falls. It’s more vital than ever after a divorce to get your finances in order and make sure you know where your money comes from and where it goes. You might think it is time to consult your family lawyer.
Family Dispute Lawyer: What they are and how they can help
The family lawyer aids the client in comprehending the legal complexities of the matter and obtaining a divorce through the family court. If a lawyer discovers that the parties have agreed to settle their disagreement peacefully outside of court at any stage throughout the proceedings, the lawyer assists his or her client and assists in the resolution of the conflict.
In the middle of intense conflicts and high emotions, a family lawyer can operate as a mediator, supporting couples in perceiving the situation clearly and in line with the law. You can anticipate long-term and long-lasting answers to your problems.
Getting All Your Key Financial Documents Together Is An Important First Step If You’re Not Used To Managing Your Money. Recover And Organize Your:
- Statements of savings and transaction accounts
- Bills for utilities (e.g. electricity, gas, mobile and internet)
- Charges from credit and retail cards
- Property documentation (deeds, mortgage papers, home loan details)
- Paperwork for investments (managed fund statements, share dividend statements)
- Tax documents (tax returns and tax file numbers)
- Policies of insurance
- Accounts of superannuation (both yours and your ex-partners)
After you have these documents, you should consider creating a budget and consulting a separation lawyer. A budget will assist you in determining the relationship between your income and expenses, as well as managing your cash flow.
If you are having difficulties paying your expenses or making ends meet, you must get financial help as soon as possible. Community organisations, community legal centres, and even government institutions provide free financial counselling. S. Financial counsellors can assist you in resolving your financial issues and establishing a financial budget that will enable you to pay off your debts and begin saving.
The following points should be kept in mind while managing your finances after separation.
Know what you’ve got
When divorce procedures begin, account statements tend to vanish. When considering divorce, begin by gathering all of your financial statements and compiling a list of your assets. This step will be useful as a starting point for negotiating your divorce settlement. An Asset Worksheet will require you to list the following items. Keep track of how much each asset is worth and who owns what percentage of it:
- Assets for Retirement
- Assets With Liquidity
- Personal Property Cash Value in Real Estate Insurance for life
- Interests in Business
- Each asset can be moved to the appropriate column as you progress through the asset division negotiations: “Husband” or “Wife.” Divide the total for each spouse by the grand total to get the percentage split.
After the divorce is finalised, expect your income to reduce
After the divorce is finalised, you should expect your income to reduce. Create a budget based on necessities rather than wants, and remember that your expenses must remain within your post-divorce income. Consider all sources of income, including spousal and child support (which will not endure indefinitely) and investment income. Use a detailed worksheet to create a budget so you don’t forget anything.
If you pay your invoices using checks, your check register is the best source of records having spending information. Remember that not all of your expenses are paid regularly; some insurance premiums or tax bills may be paid quarterly or annually, so keep that in mind.
The final stage in budgeting is to have a reasonable and critical friend or family member look over your budget and question any expenses that seem excessive. You must agree to have an open mind and not become irritated if he or she questions one of your goods; remember, this individual is attempting to assist you.
Make an excellent team
Professionals might benefit greatly from personal referrals from a trustworthy friend or business acquaintance. However, before employing someone, you should do your research. At the very least, your team should include a divorce lawyer and a Certified Divorce Financial Analyst.
A mediator, an accountant, a business or pension valuator, or possibly a child or individual therapist could be added to the team as needed.
Recognise your financial requirements
You must ensure that the liquidity of the assets you are purchasing meets your requirements. Let’s say you wish to maintain the marital home, which is worth $300,000 (50 per cent of the marital estate). You won’t know whether you can afford to maintain it unless you examine your long-term financial projection closely. Let’s say you’ve considered child-support payments into your salary; how will you pay your mortgage after the payments stop? Family dispute lawyers can also be on the expensive side so plan ahead.
Although you may believe that hiring additional professionals will make your divorce more expensive, this is not always the case. In the long-term, getting the right help will save you money on litigation and may save you from making costly settlement mistakes. Let professionals help you in the matter.
KPW Lawyer provides one of the trusted legal aid in terms of domestic or family dispute legal issues. KPW Lawyer will be there for you every step of the way. They are providing legal services throughout NSW’s Riverina region, from Griffith to Wagga, as well as regional Victoria.
KPW Lawyers strives to provide high-quality legal assistance in a variety of practice areas, with a focus on developing and maintaining business and problem-solving relationships with its clients and the community.