Divorce at any stage of life is challenging, but for those experiencing a grey divorce – separating after the age of 50 – the financial implications can be particularly daunting.

As someone contemplating this life-changing decision, you may find yourself asking: Is money keeping you from getting divorced? Here are six critical financial considerations to guide you through this process:

 

1. Evaluate Your Assets and Liabilities

The first step in understanding the financial impact of a grey divorce is to take stock of all your assets and liabilities. This includes real estate, savings, investments, superannuation, and any debts. Having a clear picture of your financial situation will help in negotiations and ensure a fair division of assets.

 

2. Understand Superannuation Implications

Superannuation is a significant part of retirement planning in Australia. In a grey divorce, superannuation can be split between partners, depending on the court’s decision or mutual agreement. Understanding how this will affect your retirement funds is crucial. Consulting with a financial planner can provide clarity and help you make informed decisions.

Resources for Finding Financial and Legal Advice:

Navigating a grey divorce requires professional guidance. Financial planners, divorce lawyers, and accountants can provide invaluable advice tailored to your situation. They can help you understand the legal and financial implications, ensuring you make decisions that protect your financial future. Here are some resources to find the right adviser for you:

 

3. Consider the Cost of Living

Living costs are an essential factor to consider, especially if you plan to live on your own. Post-divorce, your household income might be reduced, and expenses such as housing, utilities, and healthcare may increase. Creating a detailed budget can help you understand your new financial reality and plan accordingly.

 

4. Health Insurance and Medical Expenses

As you age, healthcare becomes increasingly important. Ensure you understand how your divorce will affect your health insurance coverage. If you were on a joint policy, you might need to secure your own coverage, which can be more expensive. Factor in potential medical expenses and consider setting aside funds to cover these costs.

 

5. Update Your Estate Plan

Divorce necessitates a review and update of your estate planning documents. This includes your will, power of attorney, and any other legal documents that specify beneficiaries and decision-makers. Updating these documents ensures that your assets are distributed according to your current wishes and circumstances.

 

6. Emotional and Financial Support

Divorce can be emotionally taxing. Seeking support from a counsellor or therapist can help you cope with the emotional aspects. Additionally, financial counsellors can assist with creating a sustainable financial plan post-divorce. Many organisations offer free or low-cost financial counselling services, which can be beneficial during this transition. For instance, Financial Counselling Australia provides free financial counselling to assist with managing financial issues.

Taking the leap towards a grey divorce can be overwhelming, but with careful planning and the right support, you can secure a stable financial future. Remember, seeking professional advice and understanding your financial landscape are key steps to moving forward confidently.

For more finance tips, read through this guide on 5 Key Things to Remember When Drafting Your Will. Also, here’s 9 Practical and Helpful Steps to Guide You Through Australia’s Cost of Living Crisis.

This article was first written by Vanessa Stoykov and supplied to Hunter and Bligh.
Feature image: Photographed by Mathieu Stern. Image via Unsplash.
Disclaimer: This article provides general information only and does not constitute financial advice. It is important to consider your own personal circumstances and seek professional advice before making any financial decisions.