Separating from or divorcing a partner will never be a decision that anyone takes lightly. It’s a life-changing move that will have far-reaching consequences for both spouses and their family. As well as the financial repercussions, the emotional impact on everyone involved cannot be under-estimated.
Unfortunately, it’s something that a large number of married couples will face. According to the National Records of Scotland, divorces run at around one third of all marriages each year. In 2013/14 there were 9,619 divorces compared with 29,070 marriages in Scotland.
While no one can plan ahead completely, Consensus Collaboration Scotland, whose members include lawyers, family consultants and financial specialists, recommends that couples be well prepared to stand the best possible chance of a good outcome.
Kevin Mackenzie, a Financial Planner with Acumen Financial Planning and a member of Consensus Collaboration Scotland, comments: “The more collaborative and transparent your divorce process is and the more prepared you are for it, the more likely you are to make good financial choices for your future and minimise the potential emotional damage.
We suggest that you start by working out what you own and what you owe. Gather as much information and documentation as possible about your family’s financial situation. Compile a list of all your assets, income sources and debts, then gather documents for each of them (e.g. mortgage statements, tax returns, pensions and insurance documents). Where you have no documentation (e.g. for art or jewellery), take photographs. It’s important to be above board about all your financial matters. If you try to hide anything, it will be uncovered during the divorce process and may lead to a feeling of mistrust.
Another important early calculation to think about is how much money you will need to get divorced. You should set a realistic budget for your divorce and work out how you will pay for it. In addition to professional fees, you may need to account for the additional costs of separate living arrangements.
It can also be a good idea to begin noting your monthly expenditure, as your cost of living is likely to change after your divorce. So, as well as budgeting for the costs of the divorce process itself, you should consider what your budget will be for life after your divorce. If you will have less money, which items of expenditure will you scale back or cut altogether?”
If you are considering a separation or divorce and would like further advice on how to plan for it, please contact a Consensus Collaboration Scotland professional.