Relationships can be difficult even in normal circumstances, and there is no doubt the Global Pandemic has put a strain on many couples. Like many challenges thrown our way throughout our lifetime, having the right support network around you is incredibly important.  

Whether it’s in the early stages of a separation or just prior to reaching a financial settlement, having the right professional team including a Financial Adviser can help provide guidance towards the next phase in life – here are a few insights into how this is beneficial. 

Identifying and classifying assets and liabilities

A Financial Adviser can help to properly identify, classify and evaluate the individuals’ assets and liabilities, whether these are held jointly or individually. Assets can be held in various ways, whether through a trust, company or shares and it is important to know the complete asset pool to make an informed decision. Only by presenting a complete picture of the parties’ financial position, might a fair and reasonable settlement be negotiated. 

In some circumstances, a Financial Adviser, Accountant or Lawyer will recommend that certain assets, such as business interests and company shares, be formally valued. 

Tax effective strategies

Understanding the tax implications of a proposed financial settlement can have a significant impact on the net result for each party. 

The retention, transfer or division of different types of assets can have different stamp duty and tax consequences. 

A Financial Adviser and Accountant can recommend strategies and structures for the division of assets to take advantage of duty concessions and tax exemptions or deferrals that are unique to family law property settlements. This may include recommending that a certain asset be retained or transferred. Depending on the stamp duty and tax consequences applicable to that asset, it may be more advantageous to retain one type of asset over another. 

A Financial Adviser and Accountant can also flag and calculate potential future CGT liabilities which is an important consideration when negotiating the division of any assets.  

Superannuation

A Financial Adviser can evaluate the net effect of a proposed super split and assess future needs and contributions towards super. 

Future goals and objectives

A Financial Adviser can help implement strategies on how to get those experiencing separation or divorce back on their feet, financially. This may include budgeting advice and money management strategies, recommending appropriate insurance to protect their income, managing and protecting assets, and developing plans to work towards their financial goals. 

Estate planning

Once a financial settlement has been reached and finalised, a Financial Adviser and Estate Planning Lawyer can work together to implement an effective estate plan in consideration of your new personal and financial circumstances. 

They will identify the most tax-effective beneficiary for superannuation entitlements and death benefits and help structure your assets to ensure maximum protection against future family provision claims. 

Your professional team – whether that be a Family Lawyer, Financial Adviser or Accountant, understand how difficult it can be to move forward into the next phase in life after separation. Before taking any action towards your financial future, please consider your professional team around you.  

When the future you had planned, changes plan our guide to navigating divorce and separation is a useful tool, you can download it HERE.