With financial independence
Separation and divorce can leave individuals high and dry when it comes to their finances. Sometimes both partners suffer, or it’s sometimes one person that ends up worse off. With rising divorce rates, it’s important to understand how best to survive the financial nightmare of divorce, and try to keep some financial independence.
Divorce rates on the rise
It isn’t anything new, that divorce rates in the UK are on the rise; it is simply a case of chatting to friends or family to know the volume of relationships that break-down each year.
Divorce rates in the over 40’s and 50’s have also been increasing sharply in recent years.
With over 140,000 divorces filed each year, from over 40 year olds, it is becoming a growing concern.
Those that are completely financially dependent on their partner find themselves in the worst situation, because gaining financial independence again later in life can be difficult.
If you don’t have an income
These days, lawyers are seemingly more intent on settling any financial matters related to a divorce through dividing up the assets. This tends to leave a cleaner break for the individuals, and a better option to open-ended maintenance payments that keep people tied to each other.
Many divorcees therefore, end up with a roof over their head, but income can be a problem.
Although on your wedding day it is difficult to consider the “what-ifs” when it comes to your finances, if you don’t have an income stream it is sensible to think about how you could support yourself in the event of needing to.
Retaining an element of financial independence certainly gives some reassurance that when unforeseen situations arise that you will be able to survive.
Particularity for divorcees in their 50’s, finding a job after many years of not working, can be difficult.
If you are a non or low earner, but have the responsibility of raising the children, or keeping the family home, having some financial arrangement with the main earner throughout your marriage, to act as a back-up plan, can certainly help.
This could be a personal savings account, a small investment, or a separate property in your name only. Protecting any pensions is vital as well.
Asset ownership is key to protecting your financial independence
Some partners before saying their vows choose to get a prenuptial agreement, protecting their own assets in the event of separation or divorce.
Alternatively, all assets are combined to one new family portfolio.
It can be hard to raise the topic of “what if things don’t work out”, but there are ways of doing so without being destructive.
Appointing a financial adviser can help with these communications and to provide ideas that suit both partners.
They can also help create an arrangement that is fair, and won’t leave either of the partners in a difficult position financially, should the marriage not succeed.
Plan ahead & budget
Planning and budgeting is essential during marriage and even more so during a divorce process.
Working out how much you have to utilise each month is vital so you can ensure your monthly commitments are covered. Else, it is possible to slowly but surely, slip into debt.
There may be ways that you can save money, on any mortgage or loans you have outstanding.
Or, you may find yourself with more disposable income following divorce; income that could be channelled into something productive.
Need help with financial planning? Speak to Darren
Whether you are going through a separation or divorce, or need financial planning to avoid issues in the future, speak to Darren. We have suggestions that can suit both partners to protect their own interests, and ensure financial independence.
Tel: 01403 780 770