Now we’re talking about some of the (many) questions I believe you should prioritise during the Settlement phase of your divorce.
It’s not really accurate to say this stage is more important than either of the other two we’re looking at – the Separation and the Single Life.
However, one reason it’s important to take care working through this stage is because the decisions and actions you take here will have a significant impact on the life you lead in the future.
In short – it’s vital that you avoid letting your ‘current self’ limit your future options.
With that being said, here are the next 5 questions you want answered when working through a separation:
6. DO YOU WANT THE HOUSE, OR THE SUPER?
This question is probably the one we hear the most.
For many people, the personal attachment to the family home is a weighty one that they’re loathe to sever.
For others, they feel strongly that they should stay in the house to minimise disruption for the kids.
And, for some others they can’t get away from the house fast enough.
On the other side of the equation, those close to retirement might see real value in settling with a greater share in the tax-friendly superannuation environment.
Or perhaps they’re decades away from retirement, and every extra dollar trapped in super is a dollar wasted.
I know it sounds like a cop out, but this truly is a ‘horses for courses’ situation.
However, here are some very general observations and thoughts for you to consider:
– You must work out the true cost of retaining the family home. If this cost is above your means then you can’t afford to stay in the home;
– Further to that, the stress people place themselves under to keep the family home can be more disruptive to kids than moving to a new place;
– If you’re under the age of 50, take serious note of the severe legislative risk attached to anything superannuation. I’m sure we will, one day, have a government that can resist the allure of fiddling with superannuation law. But until then…
7. WHAT DO YOU ACTUALLY WANT?
It may not surprise you to hear that very, very few people actually know what they truly want.
Sometimes they’ve spent years putting everyone else’s needs first and are now required to think about themselves – which can be very discomforting.
Perhaps they were living the life they wanted and that’s now been taken away from them, leaving them adrift in uncertainty and doubt.
Or maybe they’ve never had to think about it before. They walked the traditional path and did ‘all the right things’ but nonetheless, they still find themselves in this swamp of change.
Either way – it is imperative that you take the time to think about what you actually want for yourself and your future.
Your lawyer can’t really help with this, nor can your financial adviser or friends or family or Facebook group or anybody else.
(Of course, once you know, then your lawyer and advisers can pursue it vigorously for you. But without this guidance, we’re all flying a little blind).
So think about:
– Do you want to work now?
– Do you want to be a stay-at-home parent?
– Where do you want to live?
– What kind of lifestyle do you want? Do you have hobbies or activities you’d like to pursue?
– What do you want your life to look like?
Now, to be clear, there’s no inalienable right for you to actually live your ideal life. But by working out what you want from life, you can better answer the next question.
8. WHAT WILL YOU/CAN YOU/MUST YOU COMPROMISE ON?
The settlement process is, essentially, a rolling negotiation between two parties and their representatives.
As with any negotiation, each side will likely need to compromise in some areas to reach an acceptable solution.
The overall objective with the negotiation is very rarely complete and total victory. Or it shouldn’t be, anyway.
Instead, it’s about finding a set of imperfect outcomes that each party can accept and even perhaps be happy with – with a view to those outcomes helping them move into the next stage of their life with a degree of comfort and support.
But if you don’t know what’s important to you – if you haven’t taken the time to work out what you truly want – then how can you decide what’s worth fighting for?
Or what you could give up in return for something you really want?
Knowing what you want gives you the context to know what you don’t want / could do without / is a non-negotiable.
Put another way – it provides the structure for your decisions and helps you and your advocate shape your approach to the negotiation.
9. WILL I HAVE TO CHANGE MY LIFESTYLE?
This question is a common fear many people have during a divorce.
The future that you had planned has now evaporated. It will probably feel as though you’re starting from scratch. This paints a very murky picture of the future, and clearing away that fog can be an intimidating task.
Because even with a favourable settlement, perhaps with ongoing financial support, the reality is that your situation has indelibly changed.
So the (unfortunate) answer is often ‘yes, you probably will have to change your lifestyle’.
Your income will have changed, your wealth will have changed (reduced, most likely) and your relationships will never be the same.
This is scary stuff.
But the optimist in me suggests that inverting these fears might also open up some opportunities for you when you’re ready:
– Your income’s changed / Your money is your money and you control how it’s spent
– Your wealth’s changed / You can take more control over your money (a wonderfully liberating and empowering process)
– Your relationships will never be the same / I can dedicate more time and energy to the relationships that deeply matter to me
– I’ll have to return to work / You get to re-enter the workforce
– I’ll have to downgrade my house / You can play the (rigged) property game your own way
Now, I’m very conscious that this inversion will most likely be irritating for those going through this process – I mean, isn’t that ‘looking on the bright side’ attitude generally annoying when you’re going through something awful?
But what I hope it does help you do is look beyond the turmoil and confusion you’re mired in now, towards a future you can take comfort, pride and satisfaction from.
10. WHAT WILL BE YOUR CIRCUIT BREAKER?
For even the worst divorces, the settlement process will – one day – come to an end.
The papers will be signed, the agreement finalised and the assets released.
On that day you will leave your lawyer’s office for the last time, head home, open the front door and walk into your home.
You will find somewhere to sit down, take a deep breath and ask yourself:
“Well, now what?”
The short answer to that question is what I call your Circuit Breaker.
A circuit breaker resets the system, it protects the system from the dangers of an unexpected overload.
In your case, having a circuit breaker that you’ve already planned for can protect you from the dangers of an emotional overload in the weeks, months, years leading up to the final settlement.
It’s a treat, a luxury, an experience that you should allow yourself when it’s all finished.
It allows you to reset your mind from ‘settlement’ to ‘single life’.
So think about something special that you’d like to give yourself when it’s all done and dusted.
Maybe it’s a weekend away with your close friends and support circle. Maybe it’s a three month trip to Europe.
Perhaps it’s an indulgent spa and massage treatment. Perhaps it’s a membership to your football team.
Could be a new car. Could be a lap in a racing car. Or a handbag. Or a cracking bottle of wine.
Provided it’s affordable, doesn’t put you into debt and is something you do for yourself (no, gifts to kids don’t count…) that you can look forward to, then it doesn’t matter what it is.
It’ll help you turn the page on the Settlement chapter of your life. It will allow you the chance to reflect on what you’ve been through and think about where you’re now headed.
And once you’ve used your circuit breaker, it’s on to the next stage of your divorce – The Single Life.
Check back soon for our 10 Questions You Want Answered – The Single Life
