Divorce and the cost of living are becoming key issues in 2024. The pinch of the spiraling cost of living and worrying about the housing market crisis, but perhaps none more so than those who are going through a separation or divorce. For divorcing Australians, the twin socioeconomic crises facing this country mean that increasing numbers of splitting couples are finding themselves going down the DIY divorce route.
Divorce and the cost of living – staying together for the sake of the finances
And similarly, there’s been a large increase in the number of couples staying living together after they split, known as “separation under the one roof”. Not because heck, they just love living together, but because they simply can’t afford establishing two homes, or can’t find a rental property for one partner, due to the rental crisis and general cost of living impact on budgets.
Heads up: Don’t do-it-yourself
Sure, Australians love a good DIY, but when it comes to legal advice, doing it yourself can cause a whole bunch of problems. And despite almost half of all separating couples trying to figure out their own divorce arrangements and property settlements, only a small fraction of these couples are actually regarded by experts as being suitable to DIY and forgo expert family law advice.
With so much at stake, a DIY divorce can mean taking a big risk. Namely, the risk of negotiating a settlement that doesn’t reflect what you are actually entitled to under Australia’s family law. When people lack knowledge of their rights, entitlements and obligations, they can sell themselves short in a property settlement, or rush through decisions “just to get it all over with”, with negative repercussions down the track. (Read more about the dangers of the DIY divorce.)
Legal fees can seem costly, but can save you money in the long run by preventing you from making unwise decisions regarding your property settlement. Don’t forget, there are many ways you can reduce the cost of legal services to make it more affordable. There are also many ways to arrange payment that can make it easier to manage.
Becoming more financially savvy
Another problem that can add to the difficulties of managing your divorce during the cost of living crisis is when you and your ex have different levels of financial literacy. Sometimes, you simply weren’t the one handling the family finances. Or, you weren’t really aware exactly what your spouse earnt, the extent of their business dealings and streams of income, debt levels, the existence of cash assets or even crypto accounts. Sometimes, partners are even left in the dark about issues around the mortgage, including whether there is further debt (such as a line of credit) or if a second mortgage was taken out.
Remember that there’s no need for shame if you haven’t had a good level of financial literacy–it’s easy to get help, and learn to arm yourself with good financial information and strategies, particularly as you go through a divorce.
When is it essential to seek professional advice (if you want the best outcome)?
Getting some advice from a family law professional is beneficial across a variety of circumstances when you are separating. From issues such as wanting to transfer assets without incurring stamp duty or capital gains tax, to super splits, to situations where you staunchly disagree on what is a fair property settlement and need help dividing the matrimonial pool, utilising the services of a family lawyer can help you make the best financial decisions. This is even more important if you are not financially literate, or aren’t comfortable handling financial decisions singlehandedly.
Aside from making sure you receive your fair share in a property settlement with the guidance of a family lawyer, it’s also a great idea to enlist the help of a financial advisor–preferably one specialising in post-divorce finances (sometimes called a divorce financial planner).
A divorce financial advisor will not only help you define your vision for the future and the stepping-stone goals to reach it, but you’ll get the assistance to figure out the true state of your finances, and what you need to do (and get!) going forward. An advisor will help you make a financial plan, give you advice on budgeting and managing the crazy cost of living, and advise on what to do with a lump sum after divorce.
Developing your own financial goals and designing a new life will help you hit reset on your life as you go through your divorce.
Need more help with the financial aspects of divorce? There’s lots of good advice available here.
Do you need legal help with your divorce or property settlement? Please contact Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to receive the correct legal advice, please contact Alliance Family Law.