Let’s face it, divorce isn’t pretty. The breakdown of a relationship is generally full of emotion, uncertainty and anxiety. To make things even more stressful, we have to negotiate property settlements and child custody arrangements at our most vulnerable.
If you need divorce financial advice, the following case study provides the perfect example of how speaking with a financial adviser can help you through a divorce.
After concentrating on being the primary caregiver for her kids and working 30 hours per week, Danielle* had become detached from the everyday finances in her marriage.
In late 2012, Danielle and her ex-husband agreed to a divorce settlement. Following the settlement, she sought financial planning advice in order to review her new circumstances.
Danielle was aged 44 with two children aged 15 and 11, both of whom were in private school. She was working 30 hours per week in payroll administration earning an annual income of 36,000p.a. The family’s living expenses were estimated to be $57,000 p.a.
Danielle outlined her most important goals:
- Be there for the children before and after school
- Be independent financially with an annual income of $60,000
- Gain control of her finances
- Protect her assets for her children.
According to the settlement agreement, Danielle was to receive full ownership of the family home, which was valued at $500,000 with a $90,000 mortgage. She would also receive superannuation entitlements of $250,000 through a super split and a cash component of $350,000, as well as $10,000 p.a. in child support payments.
Danielle sought the guidance of Alman Partners and after analysing her financial position. Taking her goals and personal values in consideration, we drafted a financial roadmap for Danielle. Below are just a few of its features:
- $90,000 mortgage be paid out immediately
- $220,000 placed into a moderately conservative investment portfolio
- $40,000 funds retained in cash to assist with income shortfall and emergencies
- Superannuation invested in a suitable balanced asset allocation
- Binding death benefit nominations established in the super fund with the children nominated to receive 50% each
- Referred to Centrelink and receiving family tax benefit A and B
- Will established with testamentary trust provisions for each child;
- Death and Total and Permanent Insurance established to provide for the children.
Over the past two years Danielle has gained a sense of stability and clarity. She has been able to achieve her goals and aspirations while at the same time knowing that her family’s financial future is safe.
If you’re going through a relationship breakdown, protect your financial security by contacting Alman
*Names have been changed to protect the individual’s identity.