Paul's Insights: January is 'divorce' month
The New Year is a time of celebration but it also has a reputation for being a peak period for separation and divorce.
The warmth of January doesn’t always extend to our relationships. It can be one of the busiest times of the year for divorce lawyers, as couples call it quits after sharing one final Christmas together.
In 2018, 119,000 Australians tied the knot. In that same year, 50,000 couples ended their marriage. On that basis, two out of five marriages won’t be a ‘til death do we part’ relationship.
I freely admit I’m no marriage counsellor. But there’s no shortage of research on how devastating the financial fallout of divorce can be – not to mention the emotional impact.
A study by the Australian Institute of Family Studies (AIFS) summed up the situation, saying that divorce has a big impact on the financial wellbeing of both men and women, largely because their assets continue to fall behind married households often for many years following divorce.
This can significantly impact retirement incomes for divorced people, especially those who remain single, with many being reliant on government support to get by as they age.
While the AIFS study looked specifically at the financial impact of divorce, it’s fair to say similar outcomes can apply to de facto couples, who share pretty much the same legal entitlements and obligations when they separate as married couples.
If the start of 2020 sees you at a crossroads in your relationship, it can be worth seeking a range of professional advice before making a final decision on the future of your relationship.
Organisations like Relationships Australia provide low cost relationship counselling services. Talking the issues through with an independent third party could salvage the relationship.
If you’re sure that ending the relationship is the right course of action, make a date to speak with a lawyer – preferably a family law specialist. Good advice is essential because divorce isn’t just about ending a relationship. It also involves dividing up personal assets, and possibly, making arrangements for the care of children.
The latest figures show that divorce most typically occurs around our mid-40s – a time when many couples have accumulated a reasonable degree of wealth through property, super and other investments.
Speaking with experts can help you know where you may stand financially post-divorce, and how to make the most of a property settlement so you can plan for a new life ahead.
Click here to read our friends at Eureka Report's 7 step plan for those facing the financial reality of divorce.
Paul Clitheroe is Chairman of InvestSMART, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.