Investing Wisely In Your Separation
Are you separated and trying to reach an agreement with your ex?
If you are then this article may help you keep your legal costs down in that process.
Anyone who has ever renovated a house in Sydney will be able to tell you whether they overcapitalised or not in the process. For those who have spent too much money on their renovation they will often explain it away by saying “we’re there for the long haul” or “it’s our forever home”.
You often hear of house renovation budgets “blowing out” and contingency allowances quickly disappearing. This is in circumstances where there appears to be many rules of thumb about what you should spend on almost any part of your house…”no more than 3% of the total value of your house on a bathroom…and I think 5% on the kitchen”. Painting and landscaping are other parts of the makeover process where investment guidance is readily available and almost always free of charge.
So, if people regularly get the “cost benefit” analysis of renovating a Sydney home so wrong when there is so much information and guidance available, what chance does that couple have to retain a sense of proportion if their relationship fails and they separate?
When couples are faced with a very different and much less exciting type of makeover, aka a separation, how can they maintain a “cost benefit” analysis and ensure that the “end product” has been worth the investment?
As a start it is critical to identify your goals. While not intending to be an exhaustive list, here is a list of what we commonly see people value highly in a separation:
- Keeping the former matrimonial home.
- Being able to continue to parent their children in a meaningful way.
- Ensuring the children stay at their current schools or attend the high schools that were originally chosen for them.
- Retaining their superannuation entitlements.
- Preserving a respectful relationship with their former partner.
- Securing their financial future.
- Maintaining their current standard of living.
- Staying connected to their social/support network and the children’s local community.
Next, you should prioritise these goals. Choices and trade-offs may need to be made as you begin to separate and set-up two separate households.
For a large number of separating families their principal place of residence represents a large proportion of their net matrimonial wealth. If you want to stay living in your current home and it represents a significant part of the pool of your matrimonial assets then you may need to forego a superannuation split in your favour as well. If this is not an outcome that sits comfortably with you then now may be the time to consider “downsizing” your home.
If sending your children to a private secondary school remains high on your list of priorities then you may need to rethink your current standard of living. Alternatively, you could look at ways of boosting your income and earning capacity so that you can better contribute financially to what will be an increase in expenses due to a duplication of running two households.
It is unrealistic to expect that you will be able to achieve all of your goals in your separation and very important that you decide which ones to prioritise and what financial and emotional investment you will make to secure those goals.
You need to make smart investments in your separation.
Thirdly, don’t get side-tracked spending hundreds of dollars on legal fees arguing about the return of a $20 camp mattress when you can buy a replacement one at next to no cost. That is not smart. Setting up a new house with furniture can be really expensive as can replacing items of furniture that you have agreed can be taken from the home by your former spouse. However keeping a sense of proportion about these issues will free up your reserves, both financial and emotional, to invest in the big issues that matter most to you.
Two final points:
- Stay committed. Separation can be a time consuming process. Don’t lose sight of the end game. Grab all the support you can. Renovating a house requires scaffolding and you will need to surround yourself with your own type of emotional scaffolding to complete the process.
- Remain flexible in your thinking. If the investment in achieving what you thought was a highly prioritised goal appears too great, be smart enough to explore other alternatives. There is usually more than one path to travel following a separation.
So, if you are having difficulty working out what you really want to achieve in your separation and can’t decide which are the best options for you then get in touch with me, Lisa Wagner from Doolan Wagner Family Lawyers on (02) 9437 0010 or email@example.com. We offer qualified Family Dispute Resolution Practitioners and accredited family law specialists to help you achieve cost effective and workable family law settlements.
These posts are only intended as an overview or comment on current issues that may interest you and are not legal advice. If there are any matters that you would like us to advise you on, then please contact us.