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How to prevent big losses in a relationship breakdown

By Cameron Micallef · July 05 2019
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How to prevent big losses in a relationship breakdown

By Cameron Micallef
July 05 2019
Reading:
egg
Pete Pennicott

How to prevent big losses in a relationship breakdown

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By Cameron Micallef · July 05 2019
Reading:
egg
Pete Pennicott

For married couples, statistically speaking, the chances of getting a divorce are significant. So why do so many Australians enter marriages without a protection plan for their finances, and how can they protect themselves?

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. 

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“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. 

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How to prevent big losses in a relationship breakdown
Pete Pennicott
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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

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About the author

Cameron is a journalist for Momentum Media's nestegg. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leveraging their insights to grow your portfolio.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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