Today marks ‘Divorce Day’ – the first working Monday of January when law firms reportedly see a spike in couples filing for a split.
Going through divorce can be devastating – not just for your emotional and physical wellbeing, but also for your finances.
Women are hit particularly hard financially, with research showing they see a 33 percent decline in household income after divorce compared with 18 percent for men. They are also less likely than men to seek financial advice, leaving them at greater risk of an unfair settlement.
Here, with the help of wealth planning firm Independent Women, we round up 10 important questions that women should get the answers to when considering divorce.
1. What assets do we have beyond the house?
2. What debts do we have and what are the repayment terms (including mortgage)?
3. What about tax implications of decisions?
4. What about investment risk of our various assets?
5. How do I know if this is enough?
6. What if I don’t agree with the information provided?
7. He has pensions from before we were married, do these count?
8. How do I know what pensions he/ I have?
9. He is self employed/ partner/ ltd co, what do I need to watch out for?
10. He is a cash man, how do I track if what I am being told is accurate?
Lesley Mackintosh, founder of Independent Women says: “Whether you need a hug or a high five, your journey will be a rollercoaster, especially if you are dealing with a “difficult” person. You do not truly know someone until you start the divorce process. Be brave because divorce will be daunting whether you file yourself or your partner files.
“On top of high levels of emotion and stress, there comes a plethora of information to consider and based on the questions we get from clients or prospective clients, it is clear that women especially, are very unaware of some of the serious things they need to know up front and throughout the divorce process.”
Signs you shouldn’t go it alone
Seeking financial advice is likely to pay off no matter what your situation is, but clear signs that separating your finances will be too difficult to do alone include:
- one or both of you owning a business
- one person being financially dependent on the other
- having young children
- having multiple homes
- one person having a medical issue that affects their ability to work
- one person owning more assets such as property and a bigger pension.
Rowan Harding, financial planner at Path Financial – a Good With Money ‘Good Egg’ firm – says: “It’s so important for couples to get finance advice as well as legal advice when thinking of separating so you know your rights before you part ways. Make sure you choose an approved financial planner, so you know the advice you’re getting is up to date.
“Divorce and separation can be a stressful experience to go through so making sure you’re on top of everything is crucial for a smooth, pain-free process.”
For more, see our Good Guide to Financial Planning 2024