Going through a divorce is so difficult and it can be made more so when you consider the change in financial status that it can create. There are many ways to tackle the difficulties a divorce can bring including re-budgeting on a single income as well as rearranging your savings and investments.
The process probably will be overseen by a family lawyer but with the complexity of any given person’s finances, hiring a divorce financial planner can potentially head off any long-term problems prior to them becoming a chance to develop. For example, challenging the assumptions that are used to calculate to cash value for a defined benefit pension.
Legal advice is a vital part of the entire process, but a financial planner or adviser is invaluable when it comes to cataloguing assets and advising on potential distribution. The first step in the process is to draw up a list of assets which need to be divided. All assets, such as pensions, property and investment portfolios will need to be valued independently. This will all be more straightforward in some cases than in others. Assessing the long-term value of a defined benefit person, for example, is less straightforward and should be entrusted to a jointly appointed expert on this subject to secure the best outcome for both individuals.
House and pension
The pension pots and the house will normallybe the two largest assets and dividing these up can be complicated. When it comes to the pension, a lot depends on the pension type that is being split. A defined contribution or money purchase pension pot is a quite straightforward asset as it is valued based on the money amount that has been put into it. A defined benefit, or final salary pension, promises to pay out a pre-determined amount at intervals that are regular for the duration of the life of the beneficiary and is much more complicated to assess.
This is a good plan to get started.