Dealing with the financial fallout from a divorce

The situation

Amy and her husband, Peter, had lived separately for over a year. Both had met new partners, so it was time to finalise their separation and instigate divorce proceedings.

It had been agreed that their daughter Megan, would live with Amy at their home in Leicester. Other than that decision, no other agreement had been made with regard to their financial affairs.

Peter had secured a solicitor to act on his behalf, however Amy had not yet taken that step.

How I helped

Firstly, Amy was recommended to a trusteed solicitor I knew in Leicester.

I then reviewed the matrimonial assets, as well as those held individually, to aid the production of the financial settlement. Armed with this information, and further guidance (and at times a shoulder to cry on) Amy and her solicitor could come up with a financial agreement she could be happy with.

The settlement meant Amy had to switch the mortgage on the former matrimonial home into her sole name. To help this process, a mortgage adviser was recommended based in Leicester.

We then needed to plan Amy’s financial future.

If Amy became ill or died, Megan would need to be financially secure. To ensure this, Amy took out additional, and surprisingly cost-effective, life and critical illness cover.

Although Amy was in full-time work, the maintenance paid by Peter was vital and she would struggle financially if it ever stopped. Amy took out an inexpensive life assurance policy which would pay out a lump sum, which would replace the maintenance, if Peter ever died.

With the aid of the financial forecasting software I use, I showed Amy the difference her divorce would make to her retirement plans. We concluded that provided she continued to save for retirement as she was currently doing, her financial future looked secure.

What did my financial advice achieve?

In the short-term, my recommendation to a Leicester-based solicitor was vital in providing Amy with the legal advice she needed. It was delivered in a sensitive way, which ultimately produced a divorce settlement that worked for her.

Amy’s financial future was now on a secure financial footing as we had looked at ‘what if’ scenarios happening. This meant both she and Megan could live in the same home, as well as look to her long term future and ultimate retirement.