Separation and divorce: The top 12 mistakes a woman should avoid when it comes to divorce planning
A matrimonial divorce settlement is NOT an exact science. If a financial divorce settlement was a straight
mathematical equation, we wouldn't need courts and lawyers to resolve matters. Courts are usually
required, under Family Law legislation, to take into account a range of factors in deciding who gets what.
Too many women settle for a 50% split of the matrimonial property WITHOUT taking into account
matters such as significant disparities between what your husband earns and your own weekly /monthly
income and any restrictions your age or health might have on your capacity to earn income.
Another mistake is letting the other spouse retain the matrimonial home EVEN IF you have the ability to
buy him out. Real estate property has a habit of increasing in value without you having to do anything. If
you pass this up and your spouse pays you out then the problem often is that you don't then have
enough money to purchase a property of your own. Deposits, stamp duty, legal fees etc. can put buying
another home out of your reach. You're left paying out dead money in rent.
While not as common a mistake, some women will seek to keep the matrimonial home when they really
CAN'T afford to financially. If buying out your husband's share in the house is going to involve you taking
out a big loan, you need to factor in the monthly loan repayments PLUS outgoings such as rates, building
insurance, public liability insurance and general maintenance costs. Only then will you know whether or
not you can actually afford to keep the house.
Failing to take other matters such as alimony and child support into consideration BEFORE agreeing on a
division of the matrimonial property is another problem. These are NOT matters that should be dealt
with in isolation.
It is the current value of property that is taken into account - not replacement value. This means that if
the family car is worth $10,000, it is often better to keep it. Too many women find themselves needing a
vehicle to get the kids to and from school, football training etc. and having to spend twice what the
family car was worth just to replace it. The same mistake is sometimes made when it comes to the
marital furniture and effects. They are usually secondhand (even if only recently purchased) and
therefore are not worth a lot of money. For example, the fridge that you paid $1,000 for new may now
only worth a few hundred dollars. Keeping the bulk of the furniture (if it is in good condition) will avoid
you having to pay a lot more money to replace it.
Property settlements may sometimes be amicable but this does not mean they are fair. Do not accept
the inflated financial values your husband is likely to put on property that you want to keep and the low
value he's likely to put on any property he actually wants to keep.
It is surprising to find women (and sometimes men) arguing over the little things. By this I mean, fighting
for items of little financial worth. It's pointless paying hundreds of dollars in legal fees disputing who is
going to get a $50 wedding vase or a $150 stamp collection.
Another mistake is overlooking other assets such as boats, trailers, machinery, pensions, retirement
funds, stocks, shares and life insurance as matrimonial property and/or financial resources.
Too many women believe that if they go "soft" on their property settlement entitlements, their husband
will be easier to deal with as regards the children. This approach rarely produces the desired result. The
only real outcome usually is that your spouse perceives you to be weak.
Another very common mistake is seeking divorce financial planning advice from a lawyer instead of a
financial planner. What do lawyers know about financial planning?
Some women get sucked into believing that by reaching an informal agreement with their husband that
is legally binding. It isn't - even if it's written down and both parties have signed it.
Finally, too many women simply give in to their husband because that's what they've always done. Now
is the time to stand up for yourself. You are facing separation and divorce, which means that more than
ever before, you need to be primarily concerned with your financial future!
© Barry J. Roche