The importance of financial planning for divorce
Financial planning is important to help us all achieve our desired future lifestyle. However, when faced with relationship breakdown or divorce, the inevitable changing circumstances mean that the need to reassess your financial situation is crucial in order to allow you to begin the next chapter of your life.
A family solicitor will be able to guide you through the relevant legal issues you will be facing, but having an in-depth understanding of your new financial goals and objectives and how to achieve them will impact on what divorce settlement is needed.
Divorce financial planning involves making you fully aware of your options while ensuring you understand the true value of your assets in order to help you develop a long-term strategic financial plan and ultimately achieve the best possible divorce settlement for you.
Case Study – Mrs. X was offered a financial settlement in her divorce but wasn’t sure whether it would be sufficient to fund her future expenditure needs.
A financial planner was engaged to assess her financial information and conduct a budgeting and cash flow analysis. The settlement proposal was tested using cash flow modelling and determined that she would have an income shortfall at age 75. The immediate lump sum amount required to fund the shortfall was calculated and Mrs. X was subsequently offered a higher settlement to ensure she has sufficient income to age 90.
In this case study, had Mrs. X not engaged a financial planner to assess her financial situation and expectations for the future, the divorce settlement she would have agreed would have left her with an income shortfall.
If you are in the process of separating or getting divorced and are unsure of your future financial needs, please get in touch with Daniel today on 01225 308333 or email daniel.gornall@mogersdrewett.com. It is crucial that you understand your current and future financial needs to ensure you get the right divorce settlement.