The current economic crisis has left many people wondering how best to manage their finances in what appears to be an ever-changing situation. This could be even more pertinent for those who are considering, or in the process of, getting a divorce.
While the breakdown of a marriage can be stressful at the best of times, one that takes place during a cost-of-living crisis requires careful forward-planning. This article covers four important areas to consider when planning for your future.
The main concern for anyone contemplating a separation, aside from child arrangements, will be meeting the cost of living immediately, and what a final financial resolution should look like when all is said and done.
Separating financial arrangements will be hard: resources that would usually have to pay for one household will now need to cover two. The high levels of inflation, mortgage costs and energy prices forecast suggest that achieving a fair financial settlement will be even more challenging. Forewarned is forearmed, and getting good, realistic legal advice at the outset will help to navigate those choppy waters. Here are four things to consider:
Financial concerns put stress on relationships, often leading to separation. If a separation is inevitable, taking early legal advice from an experienced family law expert will help you avoid expensive court proceedings.
Mortgages and keeping the family home
Often, one party will wish to retain the former family home. However, mortgage rates have risen steeply recently, making it harder for one party to take on a mortgage that was previously held in joint names. The right preparation – i.e. researching the market, knowing each other’s mortgage borrowing capacity and other financial resources – will make this decision easier.
Securing a pension-sharing order now
The court can make pension-sharing orders. A share of your spouse’s pension could be a sensible asset to acquire now to help secure your retirement income in times when there is more pressure on income and ability to make pension contributions.
The court can make maintenance payments, where one spouse receives financial support from the other. These are based on the recipient’s needs to help them meet their costs. Needs must be assessed adequately to make this work, which is particularly important now with costs forecast to rise even further.