Pekada’s co-founder and principal adviser, Pete Pennicott, said: “Navigating the sticky situation that divorce often becomes is no small feat, but there are ways to make the transition simpler and make it an opportunity for a fresh start.”
Pekada said the first effect of a divorce financially is the division of assets. Looking from the outside, splitting assets 50/50 doesn’t seem that difficult.
“Not all assets have the same benefits, accessibility and tax consequences, so something that looks like a fair deal in the moment could end up costing you thousands in the future,” said Mr Pennicott.
The second financial burden is the diluted retirement savings and super, particularly if one spouse took time off from work to raise the kids.
“Ultimately, who gets (or wants) other assets, including the family home, will dictate how superannuation benefits are divided, so it’s important to think through which split of assets suits you best, in the long term,” said Mr Pennicott
The third strain financially is having one income to run two household budgets.
“Don’t be fooled into thinking that you can simply divide your previous expenses in half, as there is a lot of duplication in the new sets of living expenses – best bet is to sit down and do a budget to ensure you don’t overextend yourself,” said Mr Pennicott.