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How do I protect my Financial Future during a Divorce?
Divorce is one of the most financially and emotionally challenging life events. When a relationship ends, it’s crucial to take steps to protect your financial future and ensure a fair division of assets. Whether you’re concerned about property settlements, superannuation, or securing financial stability for yourself and your children, understanding your rights under Australian Family Law is essential.
This guide outlines key financial protections during a divorce, from safeguarding your assets to negotiating a fair settlement.
1. Understand Your Legal Rights in a Property Settlement
In Australia, property settlements under the Family Law Act 1975 (Cth) (URL Link: Family Law Act 1975: https://www.legislation.gov.au/Details/C2023C00347 ) and follow the principle of “just and equitable” division. This means that assets are not simply split 50/50 but are divided based on contributions (financial and non-financial) and future needs.
Steps to Protect Your Property Settlement:
- Identify all assets and liabilities (real estate, savings, debts, superannuation, businesses).
- Seek legal advice early to understand your entitlements. Engage a highly experienced team, like the team at ALA Law to help you navigate a property division.
- Do not transfer or hide assets—this can have serious legal consequences.
- Identify all assets and liabilities (real estate, savings, debts, superannuation, businesses).
- Seek legal advice early to understand your entitlements. Engage a highly experienced team, like the team at ALA Law to help you navigate a property division.
- Do not transfer or hide assets—this can have serious legal consequences.
- Secure copies of financial records including tax returns, mortgage statements, and investment accounts. This is known as “financial disclosure” Your obligations for financial disclosure can be found here (https://www.fcfcoa.gov.au/fl/pubs/duty-disclosure)
Within ALA Law, each lawyer has a specific skill set and subskill set, which will be applied to your case as required. When you engage with us for your family law matter, you do not simply obtain the skill of your chosen lawyer, but the entire team. This leads to options, a case strategy far beyond that which is offered by a general firm.
Tip: If you and your former partner can agree on a property division, you can apply for Consent Orders to formalise the agreement legally. Read more about Consent Orders here (link to our consent orders content here)
2. Protect Your Superannuation in a Divorce
Superannuation is considered property in a divorce settlement and can be split between spouses. However, it doesn’t mean you get instant access to the funds—it remains within the super system until retirement.
How to Ensure a Fair Super Split:
- Request a Superannuation Information Form from your ex-partner’s fund. The Court can assist you to access the visibility of superannuation for property settlement proceedings (https://www.fcfcoa.gov.au/fl/fp/super-visibility)
- Consider seeking a Super Splitting Order to divide the funds fairly. Read more about superannuation splitting orders here (https://www.fcfcoa.gov.au/fl/pubs/superannuation)
- Understand that self-managed super funds (SMSFs) have complex rules in a divorce and require a lawyer with specialised knowledge on how to deal with them in your Family Law property settlement.
Tip: If your partner has significantly more super than you, you may be entitled to a percentage of their fund to balance financial security post-divorce.
3. Avoid Financial Pitfalls During Separation
It’s easy to make costly financial mistakes during a separation, especially when emotions are running high. Protect yourself by making informed decisions.
Common Mistakes to Avoid:
- Racking up new debts – Joint debts remain both parties’ responsibility until legallydivided.
- Failing to update legal documents – Review wills, powers of attorney, and insurance beneficiaries after separation. This should be done even if you have not already done a property settlement or obtained a divorce. Read more about Wills in contemplation of Divorce here (insert URL for internal content here)
- Leaving financial decisions too late – Delaying action can result in losing financial leverage in negotiations, as well as place you at a disadvantage. Don’t let the waters muddy and become more complex by sitting on your hands. Early action is crucial.
Tip: Open a new bank account in your name and consider adjusting direct debits to avoid financial entanglements post-separation.
4. Seek Spousal Maintenance If Needed
If you are financially disadvantaged after a divorce, you may be eligible for spousal maintenance. This is financial support from your former spouse to help you transition into financial independence.
Who Can Apply for Spousal Maintenance?
- If you cannot meet your reasonable expenses due to the divorce.
- If your ex-spouse has the financial capacity to provide support.
Tip: Spousal maintenance is not automatic—you need to apply within 12 months of divorce finalisation.
Want to know more about Spousal Maintenance? Check out our in depth information page here(internal link) or head over to thew FCFCOA for more info (https://www.fcfcoa.gov.au/fl/fp/spousal-maintenance)
5. Plan for a Secure Financial Future
Divorce is a financial reset. The right financial strategy will help you move forward with confidence.
Financial Recovery Checklist:
- Set a new budget based on your post-divorce income.
- Speak to a financial advisor about managing settlement funds.
- Invest in your career or education if needed for financial independence.
- Protect your credit score by ensuring joint debts are settled or refinanced.
Tip: If you have children, consider how child support payments impact your financial planning. The Child Support Agency (CSA) calculates payments based on income and care arrangements. Want to know more about Child Support? Click here for more detailed information (internal linking)
Conclusion
Protecting your financial future during a divorce requires early planning, informed decisions, and expert legal advice. Whether it’s securing a fair property settlement, managing superannuation, or applying for spousal maintenance, taking the right steps now will set you up for long-term financial stability.
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