No one wants to think about death, divorce, or separation. One of every three marriages now ends In separation or divorce, and there are always consequences, some obvious, some not.
In the absence of wise counsel during the development of the separation and divorce agreements, financial implications can be devastating for those involved, especially if you have young children.
We, as humans are emotional beings, and respond very differently when faced with this reality. Before separation or divorce, it is likely that beneficiaries, in some cases irrevocable beneficiaries were assigned to registered assets, insurance policies, and other agreements currently in force. *It is important that these aspects are discussed as part of any separation or divorce agreement.*
The implications can create unintended consequences, so seek counsel from a duly licensed professional. Separating can create unplanned events and hardship, both financially and emotionally,
while at the same time each spouse has to make financial decisions about providing child support, deal with joint bank accounts, pensions, retirement savings plans, the house, the car, the kids, where do you start?
These events become extremely problematic if the spouse who is leaving has developed a new relationship, and he/she may have children of their own creating blended families.
A trusted holistic financial advisor who is familiar with you and your situation will be able to guide you and help you plan for your new reality.
Frequently, one member of the couple is not as aware of house-hold finances and arrangements as the other.
He or she will need to have a clear picture of their economic situation and projected needs while moving through the process of splitting assets and arranging for spousal or child support.
Independent advice is critical in dealing with the immensity of issues arising from separation and divorce. If you had good working relationships as a couple with various advisors, you might have little choice but to begin working with other professionals, as there may be a conflict of interest.
Governing compliance and regulation requires the advisor to disclose if there is a conflict, then provide a written document resolving the conflict in the best interest of the client(s).
Unlike Separation and or Divorce, Death in many cases is even more challenging to deal with as this usually an unplanned event and can happen quite suddenly. Sometimes a diagnosis of a failing health condition renders one powerless financially unless proper financial planning measures are implemented to protect your spouse, and or, children.
Upon death, the widow, an or widower who is left behind, does not know where to begin, and what needs to be implemented to maintain their lifestyle, or re-calibrate to adapt to their new reality.
Where do they turn to, and more importantly, who do they trust to do the right thing and provide wise and prudent advice to help you develop a new financial plan which will incorporate spousal assets such homes, cars, all wealth management assets, life insurance, according to your lifestyle needs?
Upon death, there are issues to deal with, such as probating the will, filing two tax returns, one for the year in which the person passed, and another called a “Terminal Tax Return. You may have to deal with creditors and other unexpected issues, hence your advisor can assist. The more complex the estate, you will required additional professional guidance.
Independent advice is critical in dealing with the immensity of unintended consequences arising from the death of your loved one.
Quite often, if you were not involved in the planning process, then it is quite likely that you will have to build a new relationship with an advisor whom you can relate to, and most importantly trust them to plan, and provide guidance for your life moving forward.
A final word on the value of Family, Friends, and Professionals
While this could very well be one of the most trying periods in your life, most people can look back once the dust has settled and realized they’ve emerged stronger. Many people who’ve gone through a separation find the whole experience has helped them rediscover themselves and develop a new-found sense of confidence.
They find they’re able to focus on growth and self-actualization. In this sense, positive change occurs if we allow ourselves the time to heal and look forward. Being patient and drawing upon resources around you – family, friends, and professionals – will help you visualize a brighter future, and focused on what lies ahead.
Regardless of the type of relationship, marital status, same gender, relationships, your Wills, POA, Medical Directives should be at least five years current, and reviewed and updated every two years.