At Christmas, strangely, divorce matters come to a head.
Going through a divorce, dissolution or separation is one of life’s most stressful events, so it’s important to have people around you to help with the practicalities. This is particularly true when it comes to financial matters, which can be complex and emotionally straining in these situations.
Achieving a fair financial settlement
As well as identifying any potential problem areas, a financial adviser can advise on how best to split any assets between you and your partner without attracting an unnecessary tax bill, and help value your pension benefits. An adviser will also assist you and your partner to complete the paperwork – such as the financial review known as a form E. This can speed up the process of your divorce or separation, keeping stress levels down as low as possible and helping to reduce any legal fees.
As well as splitting the finances, there are also new arrangements that come into play when people with children divorce. You may need to review your life insurance, critical illness protection and income protection insurance so you don’t leave yourself exposed.
Mistakes you can avoid by getting advice
Who keeps the family home? It’s easy for couples to fight for the home without considering the costs of maintaining the upkeep (mortgage, utilities and council tax bills etc). If you decide to take on the family home, make sure you have the financial capabilities to keep it running.
Sharing the pension pot – When deciding on how to split the funds within a pension, you need to consider the level of income you will receive in retirement compared to your partner. This will depend on age, health and lifestyle.
Asset valuations – It is a legal requirement to declare the true value of your assets (this can be a business, pension or any belongings etc), but it’s difficult to value an asset like a pension.
Identifying all debts – Any debts in your partner’s name means you’re also accountable. Make sure you know the full extent of any debts and try to close off any joint accounts and split the money evenly.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
If you’re going through a divorce or separation, let the experts take the strain. Talk to us for professional financial advice.