3 ‘unknown’ finance tips needed for your divorce.
No one ever imagines that divorce will happen to them but when it does you can suddenly find yourself dealing with financial insecurity. How can you prepare for something which you never thought would happen to you?
You’ve hired a solicitor so why do you need an Independent Financial Adviser?
Solicitors are essential when it comes to guiding you through the court process and ensuring that any provisions made for children involved in the marriage are legally binding but when it comes to financial planning and pensions a solicitor will recommend that you seek professional financial advice. Knowing the ins and outs of your financial situation, and that of your ex-spouse, will be vitally important in making sure you split the joint assets accrued during the marriage, and that you can both start again in a stable and fair condition. But there are some finance insights which are often overlooked. Be sure to read our 3 ‘unknown’ finance tips that are essential when going through a divorce.
1. What are the combined assets of the marriage?
All too often the family home is valued and split between the parties, but on many occasions pension pots can be overlooked. Pensions can be a valuable source of income in our latter years so why wouldn’t these be taken into account during a divorce? An IFA will be able to guide you through any pension sharing annexes (decreed by the court) as well as looking at any tax implications. But that’s not all…
2. Do you have joint life protection policies?
If yes, our tip is to NOT rush out and cancel these. An IFA can look at your policy documents and they may be able to avoid you some future costly premium rises. Sometimes a policy can have a ‘separation option’ which enables both you and your ex-spouse from undergoing further underwriting. You will then be able to split the policy and look after your own protection, but by maintaining the original agreement, you could keep your premiums at a low. If either of you have suffered any recent health problems this could be a big saving.
3. Did you know that you can protect your maintenance payments?
The court may decide that your ex-partner has to pay you child and spousal maintenance for a set period of time. This can be until the children leave home or until you are financially able to stand on your own two feet. But what happens if your ex-spouse falls critically ill, or even worse, dies? Can you afford to live without those regular payments?
Your IFA will be able to recommend a life assurance protection policy titled a ‘Family Income Benefit Policy’ for the agreed term of the maintenance payments giving you peace of mind and financial security.
If you are facing divorce and need assistance with your future financial planning we are here to help. Our Independent Financial Advisers will work confidentially with you. Lloyd & Whyte, what matters to you, matters to us.
It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested.
