Separation Planning: An adviser’s perspective.

Few client meetings have been as challenging. After years of being happily married, Sarah and her husband decided to separate, and the story of her acrimonious divorce was certainly distressing.

It started with a chance meeting, where in passing, Sarah mentioned the divorce. She assured me she’d had enough of advisers for a while and just wanted some time out. I insisted we meet as quickly as possible.

The first step was to sort out her will. Again, Sarah said she never wanted to speak to another solicitor again, but this quickly changed when I explained that if something happened to her today, all her assets would go to her ex-husband.

We also needed to update her superannuation. The binding nomination she had put in place, again leaving everything to her ex, needed to be changed to stop this flow of money, which would otherwise bypass her will and go directly to her husband.

I suggested Sarah think about putting in place a power of attorney so someone could step in and handle her affairs if she could suddenly no longer do this herself as well as think about appointing a medical power of attorney.

She needed to make provisions for her three children. While her ex-husband insisted, he’d continue in their lives, this could easily change in the future, particularly if he were to meet someone new.

Sarah had retained the family home but needed to re-mortgage it to buy out her ex-husband. As a successful professional in her own right, she could afford to do this but only just. A new family budget was needed, and she would have to stick to it, at least for the next few years.

So far, Sarah had been agreeable to my suggestions, but then I turned the conversation to two other key areas. To retain the family home, Sarah had agreed to give part of her superannuation to her ex-husband.

This was a disappointing outcome, and it was too late to mention that as her financial adviser, I should have been involved with these discussions about the settlement before she had agreed to it. But it was too late now to go back.

While the next few years would be tough living on one income, it was important that Sarah focused on her superannuation and did not let it lapse. I urged her to remember that in a few short years, she would be thinking of retirement.

She needed, more than ever, to ensure her superannuation was on track and would be sufficient to provide for her when she stopped working.

Our final conversation was the most difficult, but I thought, the most important. Sarah needed to do a stocktake of the insurances she held on her house, her car and her health, but most importantly, she needed to review her risk insurance.

No, she said. She had never understood risk insurance and particularly now when money was tight, she wanted to let these lapse. She thought she could boost her superannuation savings by stopping the life insurance within it.

I understood Sarah’s concerns, but explained now was when it was most important for her to keep, and probably increase her personal insurance.

We arranged a second meeting, and this gave me time to source the best policies that would provide Sarah with the peace of mind she needed while keeping within her already tight budget.

We agreed to increase her life insurance and total and permanent disability insurance, which were both held within superannuation. We decided if something happened to her, there should be enough money to re-pay the mortgage and support her children, at least until they turned 18.

While it all took time, Sarah left the second meeting happy. She was well prepared to face her new future, and I was pleased she could now take some well-deserved time to herself.


While every care has been taken in the preparation of this article, Soundbridge Pty Ltd (ABN 40 151 134 146) and AFTA Pty Ltd (ABN 18 624 984 550, AFSL 507423) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts.

The information and any advice provided in this document is general and has been prepared without taking into account your objectives, financial situation or needs, and might not be appropriate to your situation. Because of that, you should, before acting on the advice, consider the appropriateness of the advice, having regard to those things. Past performance is not a reliable indicator of future performance.  AFTA Pty Ltd does not warrant that future forecasts are guaranteed to occur.

The information in this document reflects our understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases, the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor their employees or directors give any warranty of accuracy, nor accept any responsibility for errors or omissions in this document.

Soundbridge Pty Ltd (ABN 40 151 134 146) is a representative of AFTA Pty Ltd (ABN 18 624 984 550), Australian Financial Services License (507423), Registered office at 166 Quay Street, Rockhampton QLD 4700.

Any advice on this website is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

News Navigation