WEBVTT - Divorce…your financial guide 0:00:10.760 --> 0:00:14.040 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:14.160 --> 0:00:17.959 James Kirby. Welcome aboard everybody. I hope you've managed to 0:00:18.000 --> 0:00:21.759 have a few days off over these rolling holidays Easter 0:00:22.400 --> 0:00:25.680 and that day and everything else. And often at holiday 0:00:25.800 --> 0:00:28.720 times we do something slightly different, which we will today, 0:00:28.760 --> 0:00:31.760 but it is not in the nature of light entertainment. 0:00:31.800 --> 0:00:34.559 If you want to figure out how to start your 0:00:34.560 --> 0:00:37.680 classic car collection or how to build a wine collection, 0:00:38.080 --> 0:00:40.320 we have done that. Have a look in the archive 0:00:40.400 --> 0:00:44.640 that's waiting for you. Today. We're going to look at 0:00:44.800 --> 0:00:48.760 the issue which I have seen so many times, literally 0:00:48.840 --> 0:00:54.760 dictate the lifelong financial fortunes of an enormous amount of people. 0:00:56.160 --> 0:01:00.000 And it's not super and it's not your house. It's divorced. 0:01:00.760 --> 0:01:03.560 And I have a financial advisor who is a specialist 0:01:03.560 --> 0:01:06.600 in the area. He's an independent financial advisor. He's been 0:01:06.640 --> 0:01:09.960 on the show before. His name is Nathan Fradley from 0:01:10.000 --> 0:01:12.319 Nathan Fradley Advice. And we're going to put you through. 0:01:12.440 --> 0:01:14.360 We're going to put you through, We're going to take 0:01:14.400 --> 0:01:16.919 you through this issue today. I want you, Nathan. 0:01:17.640 --> 0:01:19.080 I'm great, thanks having me back on. 0:01:19.560 --> 0:01:24.559 Delighted to have you back on Okay, It's something that 0:01:25.360 --> 0:01:31.720 we can all pay enormous attention to building an investment 0:01:31.880 --> 0:01:37.200 portfolio and optimizing our cash and everything else, interplay between 0:01:37.240 --> 0:01:40.320 pensions and super whatever, which we talk about every day 0:01:40.360 --> 0:01:42.880 on this show. We don't talk about divorce, And the 0:01:42.959 --> 0:01:46.360 fact is that so many times people with their financial 0:01:46.400 --> 0:01:50.320 world cut in half or more than that. So can 0:01:50.400 --> 0:01:53.480 I ask you, and you deal in this area, and 0:01:53.520 --> 0:01:57.840 you've built a reputation in this area, what are the 0:01:58.000 --> 0:02:04.840 hidden traps? What are the outstandings mistakes that people from 0:02:05.240 --> 0:02:11.239 either side other marriage make in this area financially, if. 0:02:11.120 --> 0:02:16.280 We're looking at it during the divorce process, I'd say 0:02:17.240 --> 0:02:21.200 divorce is probably the hardest thing that most people will 0:02:21.200 --> 0:02:23.440 go through in their entire life. It's definitely the most expensive. 0:02:24.080 --> 0:02:27.239 To your point, it is an empire killer from that realm. 0:02:27.280 --> 0:02:32.000 But because it is lost and it's grief, people tend 0:02:32.240 --> 0:02:36.760 to lose some of the rationality in the decision making. 0:02:38.000 --> 0:02:42.160 They get stuck in sometimes a sense of justice. Sometimes 0:02:42.200 --> 0:02:44.040 they are concept of I get my day in court. 0:02:44.680 --> 0:02:48.040 Sometimes just someone gets in a third party gets in 0:02:48.040 --> 0:02:51.639 an ear of one party. So I'd say that when 0:02:51.639 --> 0:02:55.720 we're doing the financial aspect of a divorce process or 0:02:55.760 --> 0:03:01.880 any separation, focusing on rational outcomes and what life is 0:03:01.919 --> 0:03:04.000 going to be like afterwards instead of getting stuck on 0:03:04.080 --> 0:03:07.880 what life could have been like or what happened. Generally 0:03:08.000 --> 0:03:12.000 costs fifty percent less money and legal fees than six 0:03:12.040 --> 0:03:15.880 months off the divorce proceedings. So I think when we 0:03:15.960 --> 0:03:19.519 get great success in divorce process, most people think divorce. 0:03:19.520 --> 0:03:20.919 They go, what's the set percentage? 0:03:20.960 --> 0:03:22.560 How much do I get if they've lived with me 0:03:22.639 --> 0:03:23.520 for two years? 0:03:23.800 --> 0:03:25.760 What's the rule? There are no rules. 0:03:26.240 --> 0:03:27.120 There are no rules. 0:03:27.280 --> 0:03:30.120 Did you say in the sense of there's no hard 0:03:30.160 --> 0:03:33.040 and fast and there's certain dates and court time frames 0:03:33.040 --> 0:03:34.960 that need to be met and must be separated for 0:03:35.000 --> 0:03:36.680 twelve months to get divorced and things like that. But 0:03:36.880 --> 0:03:40.640 in terms of financial split, a divorce has a divorce 0:03:40.680 --> 0:03:44.360 aspect of it, the legal aspect of set breaking that marriage. 0:03:44.480 --> 0:03:47.040 It's also got a financial or property settlement, and then 0:03:47.080 --> 0:03:49.440 if there's children, that's a child aspect, So the financial 0:03:49.440 --> 0:03:51.840 aspect is separate from the divorces. 0:03:51.880 --> 0:03:54.320 So yeah, we always think of divorce as lawyers right 0:03:54.360 --> 0:03:57.680 on both sides, not financial advisors, and that is that 0:03:57.680 --> 0:03:58.520 the reality too. 0:03:59.080 --> 0:04:02.200 Yeah, what I'm doing in this space is very new, 0:04:02.480 --> 0:04:05.240 and financial advisors historically when they've gotten involved, they get 0:04:05.240 --> 0:04:07.200 involved after settlement things are done. 0:04:07.200 --> 0:04:08.360 I've now got this pool of money. 0:04:08.400 --> 0:04:08.840 What do I do? 0:04:09.360 --> 0:04:10.280 But when we look at the. 0:04:10.280 --> 0:04:14.200 Really successful processes, two people who decide they're not going 0:04:14.240 --> 0:04:18.120 to continue in a relationship together before lawyers get involved, 0:04:18.160 --> 0:04:20.320 although you should always get them involved at some point 0:04:21.320 --> 0:04:24.640 before they're even involved, you can have discussions which can 0:04:24.680 --> 0:04:27.880 then turn into mediations, which can then turn into lawyer 0:04:27.960 --> 0:04:32.400 led mediations before a court tells you this is the outcome. 0:04:33.000 --> 0:04:37.720 That would require. I expect this would for balance, This 0:04:37.760 --> 0:04:40.800 would require both parties having an advisor, and that would 0:04:40.839 --> 0:04:45.279 require whatever way you cut it, it would demand a 0:04:45.320 --> 0:04:47.680 certain amount of cash. Yeah. 0:04:48.560 --> 0:04:52.039 Yes, So there's actually a form of separation called collaborative 0:04:52.040 --> 0:04:56.400 divorce where you have two lawyers, a communication specialist that's 0:04:56.480 --> 0:05:00.839 usually like a psychologist, and a financial neutral And it's 0:05:00.839 --> 0:05:04.240 a fantastic process for the right people, but when you 0:05:04.279 --> 0:05:08.479 have four professionals in the room, it can be increasingly expensive. 0:05:08.040 --> 0:05:11.800 And is the financial persons supposed to carve it out 0:05:12.040 --> 0:05:15.680 fairly financially between the two people getting divorced. 0:05:15.600 --> 0:05:16.679 In collaborative divorces. 0:05:16.720 --> 0:05:21.119 Their job is to equalize understanding, to ensure that there's 0:05:21.200 --> 0:05:24.240 nothing missed that could be substantially detrimental in a separation. 0:05:24.920 --> 0:05:27.640 So it's like catching things before they go wrong. But 0:05:27.720 --> 0:05:31.440 they will never give advice to either party individually, even 0:05:31.480 --> 0:05:34.640 after the divorce. They'll always refer out from that position there. 0:05:35.160 --> 0:05:37.159 So there's one way that people can do it. But 0:05:37.520 --> 0:05:39.240 in the work that I do, it's more working with 0:05:39.320 --> 0:05:41.800 I often work with the financially disempowered person in the 0:05:41.839 --> 0:05:45.120 relationship because often is the case that one person, as 0:05:45.160 --> 0:05:48.560 we do with most jobs in relationships, one person takes. 0:05:48.400 --> 0:05:49.080 Up the job. 0:05:49.200 --> 0:05:50.680 I'll do the cooking, you do the washing. 0:05:51.360 --> 0:05:53.640 I'll take care of the budgeting, and you can take 0:05:53.680 --> 0:05:56.360 care of managing the kids, time tables, whatever it might be, 0:05:56.680 --> 0:06:00.320 and we divide labor, and that can be proper madic. 0:06:00.360 --> 0:06:03.040 If there's anything I'd say to never have to get 0:06:03.040 --> 0:06:07.640 advice from me unto force, I would say is if 0:06:07.640 --> 0:06:10.239 you can have an equal understanding of what's happening with money, 0:06:10.240 --> 0:06:12.520 one person can manage the day to day, but if 0:06:12.520 --> 0:06:15.880 you both fully understand what's going on, it can decrease 0:06:16.000 --> 0:06:18.680 so many or decrease the chance of things going on 0:06:18.760 --> 0:06:20.800 because there is a greater level of clarity. 0:06:21.160 --> 0:06:23.479 It sounds to me what you're saying to our listeners, 0:06:24.640 --> 0:06:29.719 and to some extent we will just say that there. 0:06:30.320 --> 0:06:32.920 What you're saying is one person can manage the money 0:06:32.920 --> 0:06:39.480 if they want, but both parties should look after themselves 0:06:41.160 --> 0:06:45.840 by being across what's happening with their money. How much 0:06:46.120 --> 0:06:48.880 is our mortgage, how much do we actually make together? 0:06:49.680 --> 0:06:51.719 How many bank accounts do we have, how much is 0:06:51.720 --> 0:06:54.479 in them? Can you give us some examples when you 0:06:54.520 --> 0:06:57.560 say making sure everything's accounted for? Is? Are you talking 0:06:57.600 --> 0:07:01.800 about stuff like money? Literally secret colms, people having money 0:07:02.080 --> 0:07:03.840 talked away that the other partner didn't do. 0:07:03.880 --> 0:07:03.960 It? 0:07:04.040 --> 0:07:06.440 Was that common? Can you give you some examples. 0:07:06.000 --> 0:07:06.920 That can happen? 0:07:07.000 --> 0:07:09.720 But I find that happens when things have started going 0:07:09.720 --> 0:07:13.280 wrong already. So if you've got a couple who'll across 0:07:13.360 --> 0:07:17.360 the decisions, he's a really easy tell. If I'm the 0:07:17.400 --> 0:07:20.680 person who manages the money and I'm making sure our 0:07:20.720 --> 0:07:23.600 plans are on track and we're investing, we're doing all 0:07:23.640 --> 0:07:26.200 these things, and the other person comes to me and says, hey, 0:07:26.320 --> 0:07:28.760 let's go on this holiday, or the kids got this excursion, 0:07:28.920 --> 0:07:31.360 or I want to buy this thing, or and you're 0:07:31.400 --> 0:07:35.520 always saying no, that says that the other person doesn't 0:07:35.520 --> 0:07:37.640 have a good handle on the situation, because if you 0:07:37.720 --> 0:07:40.400 both understand it, it's not a decision of I'm not 0:07:40.440 --> 0:07:43.119 the no guy, I'm not the one that's always asking 0:07:43.160 --> 0:07:46.360 for things. It's we both understand the situation and the 0:07:46.400 --> 0:07:49.720 context of what we can and can't afford. So that's 0:07:49.720 --> 0:07:51.560 a really early indicator that if you us feel like 0:07:52.360 --> 0:07:53.920 I wish we could do more, but I'm always feel 0:07:53.960 --> 0:07:55.720 like we're saying no because we're trying to plan for the. 0:07:55.640 --> 0:07:57.600 Future, but they just don't get it. Because they don't 0:07:57.600 --> 0:07:58.080 get it. 0:07:58.680 --> 0:08:03.480 I wonder my hunch is that the disastrous couple is 0:08:03.480 --> 0:08:08.520 the couple where neither actually pay attention to the money. 0:08:08.720 --> 0:08:11.720 Have you come across divorce proceedings where both parties were 0:08:11.720 --> 0:08:16.200 appalling in terms of that they just didn't pay any attention. 0:08:16.960 --> 0:08:20.040 Or they a little bit of dangerous information. They did 0:08:20.120 --> 0:08:22.920 little things, but not everything. I thought you were taking 0:08:22.960 --> 0:08:24.320 care of that. No, I thought you were taking care 0:08:24.360 --> 0:08:25.880 of that. I was doing this thing, but I wasn't 0:08:25.880 --> 0:08:29.360 doing that thing. And yeah, it's often the case where 0:08:29.400 --> 0:08:31.880 the person who comes to me starts learning about how 0:08:31.880 --> 0:08:32.400 things are done. 0:08:32.679 --> 0:08:35.200 Why did we even do it that way? That doesn't make. 0:08:35.080 --> 0:08:38.920 Any sense at all, because granted their former partner was 0:08:38.920 --> 0:08:40.600 doing the best they could in the knowledge that they had, 0:08:40.920 --> 0:08:42.880 but they may not have known what to do. It 0:08:42.920 --> 0:08:44.800 may have just been thrustle them. You're good with money 0:08:44.840 --> 0:08:47.240 because you saved a bit more before we go together. 0:08:47.320 --> 0:08:51.480 So you've got money because you're an accountant and whatever, 0:08:51.720 --> 0:08:55.800 I'm a portrait artist or whatever. Okay, So what about 0:08:56.000 --> 0:09:02.400 when you have people in that situation? The home, which 0:09:02.440 --> 0:09:05.960 in the Australian in every country matters, but in Australia 0:09:06.120 --> 0:09:10.480 is enhanced because it's also, on top of being a home, 0:09:10.800 --> 0:09:14.560 on top of having an elevated value VISI v. History 0:09:14.600 --> 0:09:18.959 and other countries, it also is a tax protected vehicle. 0:09:19.559 --> 0:09:23.800 So when there's a divorce, is it the case again 0:09:23.880 --> 0:09:26.240 I'm just exploring here, Is it the case that the 0:09:26.280 --> 0:09:30.360 person who does not get the house but gets other 0:09:30.440 --> 0:09:36.040 assets has a much more complex future than the person 0:09:36.040 --> 0:09:36.920 who got the house. 0:09:38.760 --> 0:09:39.319 Maybe? 0:09:39.920 --> 0:09:42.280 And so this sort of falls into one of the 0:09:42.320 --> 0:09:45.880 old urban legends around around separation that if I keep 0:09:45.920 --> 0:09:48.040 the house, I'll be better off. And there's plenty of 0:09:48.040 --> 0:09:49.880 reasons for that, not having to base damp duty when 0:09:49.920 --> 0:09:52.520 you purchase a new house, which is often missed in 0:09:52.679 --> 0:09:58.080 separation agreements. Yeah, finding housing. You keep the house. Now 0:09:58.080 --> 0:09:59.440 I've got to go and find somewhere to live, find 0:09:59.440 --> 0:10:01.080 somewhere to rent. I got it's been near the kids. 0:10:01.120 --> 0:10:03.120 I've got to do that, like all those kinds of things. 0:10:03.160 --> 0:10:06.160 And then obviously the capital gains implications, I'll take the investments, you. 0:10:06.120 --> 0:10:06.760 Take the house. 0:10:07.080 --> 0:10:10.480 What happens in time, But I think what when we 0:10:10.520 --> 0:10:13.679 look at that The root of that problem is actually 0:10:13.720 --> 0:10:17.120 stems from not just what is the split or how 0:10:17.120 --> 0:10:20.440 do we divide assets now? But looking forward, And this 0:10:20.520 --> 0:10:22.319 is where I think financial advice is going to start 0:10:22.320 --> 0:10:23.840 playing a lot more of a role as people see 0:10:23.840 --> 0:10:26.440 the benefit of this is when if you look at 0:10:26.520 --> 0:10:27.520 i'll take fifty percent, or. 0:10:27.520 --> 0:10:28.600 I'll keep the house. You keep this. 0:10:28.960 --> 0:10:31.800 That's great until we realize that the person who's kept 0:10:31.800 --> 0:10:34.959 the house, who was a lower income earner, hasn't really 0:10:35.000 --> 0:10:37.280 been able to earn that much, can't afford to maintain 0:10:37.320 --> 0:10:39.800 the mortgage, can't afford the upkeep on the property, can't 0:10:39.840 --> 0:10:41.840 and then two years they sell it anyway, so that 0:10:41.880 --> 0:10:42.920 family asset is gone. 0:10:44.120 --> 0:10:46.199 So this is where when we're looking. 0:10:45.920 --> 0:10:49.360 At at a separation and trying to decide what's the 0:10:49.360 --> 0:10:50.440 best way to split assets. 0:10:50.480 --> 0:10:51.520 And when I do this work. 0:10:51.360 --> 0:10:54.400 I'm representing one party is looking at it and saying, yes, 0:10:54.559 --> 0:10:56.280 this might be where you want to be now, but 0:10:56.360 --> 0:10:58.160 where do you want to be in the medium longer term? 0:10:58.200 --> 0:10:58.840 Can you even. 0:10:58.720 --> 0:11:01.440 Afford to keep this place? And how does that fit 0:11:01.480 --> 0:11:04.200 into your broader lifestyle? The kids are sixteen and seventeen, 0:11:04.280 --> 0:11:06.040 you want to be in the area for schooling for 0:11:06.080 --> 0:11:08.920 the next two years than what or these sort of 0:11:08.920 --> 0:11:11.800 factors start coming in. But yeah, there is definitely a 0:11:11.800 --> 0:11:14.240 lot of advantages to the family home. There's also a 0:11:14.240 --> 0:11:17.160 lot of cultural connection to it. As you said, the 0:11:17.160 --> 0:11:19.280 great Australian dream of owning your own home or owning 0:11:19.280 --> 0:11:23.720 someone else's is run so strongly in our blood. Keeping 0:11:23.720 --> 0:11:26.000 that property sometimes can feel like something I want to 0:11:26.080 --> 0:11:28.240 keep the house. I found the house, I put all 0:11:28.240 --> 0:11:30.680 the work into the house, I painted the house. There's 0:11:30.720 --> 0:11:34.240 this emotional connection to something that may not be in 0:11:34.280 --> 0:11:35.400 the best interest to retain. 0:11:36.679 --> 0:11:39.959 So it's not necessarily the case then that the complexity 0:11:40.000 --> 0:11:43.400 is all upon the person who got other things other 0:11:43.440 --> 0:11:44.720 than the home. 0:11:45.760 --> 0:11:48.240 Yeah, I'm finding more that keeping the home is not 0:11:48.280 --> 0:11:51.360 just not viable for either party, which is becoming increased 0:11:51.360 --> 0:11:53.000 in the common that so much of the wealth is 0:11:53.040 --> 0:11:56.720 in the home that the amount of debt the retainer 0:11:56.720 --> 0:11:58.600 would have to take on either they can't get it 0:11:58.720 --> 0:12:01.360 or they could can't maintain it, which just makes no sense. 0:12:01.400 --> 0:12:03.160 That seeming that's coming up a lot more than it 0:12:03.240 --> 0:12:03.520 used to. 0:12:03.960 --> 0:12:06.240 Okay, can you give us two seconds on super and 0:12:06.280 --> 0:12:08.400 how it works, because it's still important now. 0:12:09.800 --> 0:12:14.040 Yeah, with superinnuation, there's really the common question again, can 0:12:14.040 --> 0:12:15.760 we combine our super And there's sorts of things where 0:12:15.800 --> 0:12:18.400 people in a relationship you can't. There's a couple of 0:12:18.480 --> 0:12:21.240 rules around contribution splitting things like that, but there is 0:12:21.280 --> 0:12:24.760 a rule around splitting of super innovation in a separation 0:12:25.080 --> 0:12:27.600 and it forms part of the whole arrangement. So there's 0:12:27.600 --> 0:12:29.920 no hard and fast you get half my super or 0:12:30.600 --> 0:12:32.280 you'll come to an agreement that says this is how 0:12:32.280 --> 0:12:35.040 we're splitting up the assets, and those assets will be 0:12:35.120 --> 0:12:38.959 made of this much super, this much cash, this house. 0:12:38.720 --> 0:12:39.440 That sort of stuff. 0:12:39.679 --> 0:12:42.920 And then when that happens, there's a form, a family 0:12:43.120 --> 0:12:45.240 law form that most super funds will have that rolls 0:12:45.240 --> 0:12:47.840 the money from one fund to another. It's a relatively 0:12:47.840 --> 0:12:50.600 straightforward process of these days from an administrative perspective. 0:12:51.000 --> 0:12:51.800 But getting to. 0:12:51.720 --> 0:12:54.400 That point, sometimes you get people who are very short 0:12:54.480 --> 0:12:57.520 term in they're thinking, I want at least possible super 0:12:57.559 --> 0:12:58.320 because I want is much. 0:12:58.240 --> 0:12:59.199 Money in my bank account. 0:12:59.200 --> 0:13:01.840 Other times they'll be focusing on that super Again, it 0:13:01.880 --> 0:13:04.560 really plays back to how they're going to maintain their 0:13:04.559 --> 0:13:07.280 life and moving forward, and is super the best place 0:13:07.320 --> 0:13:09.520 for it if they don't take the super how they're 0:13:09.520 --> 0:13:10.520 going to get money to retire? 0:13:10.559 --> 0:13:11.400 All that kind of stuff. 0:13:11.760 --> 0:13:15.160 Okay, is there any variation when it comes to self 0:13:15.160 --> 0:13:19.320 managed super funds? Let's see mom and Dad are the 0:13:19.520 --> 0:13:21.079 SERF match super fund. 0:13:22.480 --> 0:13:25.000 The two trustees a really fun one. 0:13:25.000 --> 0:13:27.880 Actually, I just did SPT points for advisers on this 0:13:27.920 --> 0:13:31.400 recently because back in what's again, when you look at 0:13:31.440 --> 0:13:34.520 the dynamics of relationships, we have a self managed super 0:13:34.520 --> 0:13:36.439 fund because the person who was running the money is 0:13:36.480 --> 0:13:39.360 it was a good idea. Maybe their business premises is 0:13:39.400 --> 0:13:41.120 owned inside of the fund. 0:13:40.920 --> 0:13:43.439 So the same issue emergen as I imagine the person 0:13:43.480 --> 0:13:44.040 really runs it. 0:13:44.360 --> 0:13:46.760 Yeah, but what you again have is the amplified effect 0:13:46.760 --> 0:13:49.920 that all trustees have to know how to run the fund. 0:13:49.679 --> 0:13:51.160 And have full responsibility for it. 0:13:51.720 --> 0:13:54.560 And you've also then got to be acting in the trustees' 0:13:54.800 --> 0:13:57.800 best interest and or best financial interest, and. 0:13:57.760 --> 0:13:59.120 They have divoting life goals. 0:13:59.440 --> 0:14:02.240 So it might makes sense to retain the fund right now, 0:14:02.440 --> 0:14:04.480 but because of business premises is in it, you can't 0:14:04.520 --> 0:14:08.320 split it and almost into things. But people repartner lives 0:14:08.480 --> 0:14:12.160 change direction, maybe they just don't get along, and maintaining 0:14:12.200 --> 0:14:15.160 that connection can be really hard. I've seen cases where 0:14:15.520 --> 0:14:18.600 partners have taken limited power of attorney over their form 0:14:18.600 --> 0:14:21.680 of spouse's power to trust, the obligations, and that's just 0:14:21.720 --> 0:14:24.960 a nightmare of disaster. Wedding to happen self maniership of 0:14:24.960 --> 0:14:26.520 fund becomes a lot more. 0:14:26.360 --> 0:14:28.800 Complicated, more complicated understand and tell me what if it 0:14:28.880 --> 0:14:31.160 was the case that they wanted to split and they 0:14:31.200 --> 0:14:33.840 wanted to split everything and the core of the self 0:14:33.920 --> 0:14:36.800 maner super fund was a business premises because they used 0:14:36.840 --> 0:14:40.160 to have a shop or whatever. Do you have to 0:14:40.200 --> 0:14:43.000 sell the property at market value and split it is 0:14:43.040 --> 0:14:43.360 that what. 0:14:43.360 --> 0:14:45.920 Happened again would come back to how you decided to 0:14:45.960 --> 0:14:48.880 divide up the assets, whether the balances were segmented, in 0:14:48.880 --> 0:14:51.280 the first place, there's no have tos. 0:14:51.880 --> 0:14:53.800 But in regards to the divorce process. 0:14:53.800 --> 0:14:56.560 But from a super fund perspective, it has to be 0:14:56.760 --> 0:14:58.680 arms length transactions, market value. 0:14:58.680 --> 0:15:00.360 Everything has to be above boarder clients. 0:15:00.400 --> 0:15:03.160 So there's no give from a family or perspective, and 0:15:03.240 --> 0:15:06.160 that your super responsibilities to struss they are the same. 0:15:05.960 --> 0:15:08.880 Responsible and the fund must get the value market value 0:15:08.880 --> 0:15:11.760 for the asset whatever it is, including that whatever you 0:15:11.760 --> 0:15:14.880 had in it, including a business premises. Okay, really interesting, 0:15:14.960 --> 0:15:18.800 absolutely absorbing. Let's come back and we're going to cover 0:15:18.840 --> 0:15:24.360 folks how to divorce in the best possible financial fashion. 0:15:24.440 --> 0:15:38.280 Back in a moment. Hello and welcome back to the 0:15:38.280 --> 0:15:44.440 Australian's Money Puzzle podcast. Okay, today we are talking about 0:15:44.640 --> 0:15:51.760 divorce and money, the best way that you or you 0:15:51.840 --> 0:15:56.640 and your partner can divorce financially. And I have Nathan 0:15:56.880 --> 0:16:00.880 Fradley on the show, who is specializes in this is 0:16:00.920 --> 0:16:03.120 really across it and I'm going to ask him now 0:16:03.520 --> 0:16:08.479 about the best how to do this the best way financially. 0:16:08.720 --> 0:16:12.640 What are your mean what are your mean lessons, Neathan 0:16:12.760 --> 0:16:14.440 from years of working in this area. 0:16:15.400 --> 0:16:17.400 I'm going to be vague on the legal side of it. 0:16:17.400 --> 0:16:21.560 Because I'm not a lawyer, but the financial advisor supports 0:16:21.560 --> 0:16:24.920 the lawyer in this process. But what I've seen work 0:16:25.080 --> 0:16:29.880 really well. Firstly, working with professionals will make your life easier. 0:16:30.040 --> 0:16:34.040 People fear divorce lawyers or financial plans because of cost, 0:16:34.560 --> 0:16:38.760 but inevitably, by working with professionals things to done more efficiently. 0:16:39.080 --> 0:16:42.360 You're getting your unbiased or your biased to you advice. 0:16:42.880 --> 0:16:45.320 It saves you money the end of the day, because 0:16:45.360 --> 0:16:47.880 what can happen is it falls around. But I think 0:16:47.880 --> 0:16:50.360 that getting the right advice is really important and that 0:16:50.440 --> 0:16:52.600 sets you up, which is a bit of gimmy for me. 0:16:53.000 --> 0:16:56.080 But I'd say in terms of when you're looking at 0:16:56.080 --> 0:16:58.560 yourself and how you're going through this, it's going to 0:16:58.600 --> 0:17:01.600 be awful for everyone in the situation the longer you 0:17:01.640 --> 0:17:04.760 can stay rational look at things not just on I 0:17:04.800 --> 0:17:07.119 mentioned before one face value. Now, but what does this 0:17:07.200 --> 0:17:09.560 mean for me at the end after this is done, 0:17:09.600 --> 0:17:13.199 what does life look like because I'm starting again and 0:17:13.400 --> 0:17:15.679 understand that it's going to be okay. That decreases the 0:17:15.720 --> 0:17:19.480 temperature in the room in the separation, and know that 0:17:19.520 --> 0:17:22.600 you'll be all right and then work through I think 0:17:22.640 --> 0:17:26.639 that's really important. And then this is going to be 0:17:26.720 --> 0:17:29.840 harder to say. It's easier to say than do, but 0:17:29.960 --> 0:17:34.359 assuming best intent with your partner will be helpful a 0:17:34.359 --> 0:17:37.560 lot of the time, especially working with the more less 0:17:37.600 --> 0:17:40.679 sophisticated person in the relationship. The former partner will do 0:17:40.840 --> 0:17:44.120 things and because it's for twenty years, they've just done 0:17:44.200 --> 0:17:48.040 things with money, and the now awakened part is. 0:17:47.960 --> 0:17:49.240 Going, why do they do that? Why do they do that? 0:17:49.280 --> 0:17:51.200 Are they hiding money? Are they hiding assets of things? 0:17:52.200 --> 0:17:54.639 And a lot of my job in this instance is explaining, 0:17:54.680 --> 0:17:56.600 you know, this is how this works, this is what 0:17:56.600 --> 0:17:59.000 they're trying to do. I can see how this has 0:17:59.040 --> 0:18:02.440 played out the way it has and unless they're going 0:18:02.480 --> 0:18:04.880 for that or this will come out in the whitewash 0:18:04.960 --> 0:18:09.160 because of the disclosure of assets. That again decreases the temperature. 0:18:09.480 --> 0:18:11.600 The lower the temperature, the comma we are, the camera 0:18:11.680 --> 0:18:13.720 we are, the easier the process can be, and the 0:18:13.760 --> 0:18:15.639 more we can focus on the things that we actually 0:18:15.640 --> 0:18:18.240 want to fight about instead of fighting about everything. 0:18:18.840 --> 0:18:21.880 I expect you have what goes without saying that if 0:18:21.920 --> 0:18:25.240 the person the partner on the other side has a 0:18:25.320 --> 0:18:28.240 lawyer and an advisor and you only have a lawyer 0:18:28.440 --> 0:18:30.600 it sounds to me like you should have an advisor. 0:18:30.640 --> 0:18:33.240 I think that sounds like basic logic in terms of 0:18:33.280 --> 0:18:35.680 the balance of power. The other thing I would ask 0:18:35.720 --> 0:18:37.879 you is what about priorities? When you're sitting there with 0:18:37.920 --> 0:18:41.120 the client and you're saying, Okay, here we go. This 0:18:41.160 --> 0:18:46.840 is a divorce. Again, my client is a very sophisticated operator, 0:18:47.160 --> 0:18:51.119 but is not interested and has never been financial. The 0:18:51.119 --> 0:18:55.159 person on the other side is a similar person, but 0:18:55.200 --> 0:18:59.359 their life has been in finance and they are innately 0:19:00.400 --> 0:19:04.520 well disposed towards getting the best financial outcome. So when 0:19:04.520 --> 0:19:07.320 you're looking at your client, the non financial one basically 0:19:08.160 --> 0:19:11.800 who never asked what they were signing over the years, 0:19:12.000 --> 0:19:15.560 are often didn't ask what's your priorities? What do you 0:19:15.600 --> 0:19:17.680 say to yourself? What are my priorities for my client? 0:19:17.880 --> 0:19:21.520 Is it accommodation, is it cash, flu is it. 0:19:21.520 --> 0:19:24.840 Super all of those things? 0:19:24.960 --> 0:19:28.400 So I think the number one priority is understanding your 0:19:28.440 --> 0:19:32.040 point about just signing things. It's a classic example of 0:19:32.560 --> 0:19:35.159 trust that distributes to both parties, and the person just 0:19:35.160 --> 0:19:36.720 signs it every year and all of a sudden they're going, 0:19:36.720 --> 0:19:39.159 what am I signing? I don't actually understand what's happening. 0:19:39.200 --> 0:19:42.879 I think getting across and understanding the current state of 0:19:42.920 --> 0:19:45.800 play is really important because that helps them make a 0:19:45.800 --> 0:19:49.040 better decision. That can be as simple as the budget, 0:19:49.600 --> 0:19:52.760 which you just mentioned, but is crucial. Where does that 0:19:52.800 --> 0:19:55.800 money actually go? I can't believe we spent that much. 0:19:56.160 --> 0:19:58.920 But also, now that we're separating, we're probably going to 0:19:59.000 --> 0:20:01.560 run two households. How long can we afford. 0:20:01.240 --> 0:20:01.760 To do that for? 0:20:02.000 --> 0:20:05.000 We've got these kids fees, We've got these medical costs 0:20:05.359 --> 0:20:06.679 at this sort of stuff that piles in. 0:20:07.040 --> 0:20:08.760 Who's covering what? How is it paid for? 0:20:09.160 --> 0:20:12.520 Keeping that as clean as possible and as transparent as 0:20:12.560 --> 0:20:16.439 possible again decrease the temperature, but also allows a cleaner 0:20:16.480 --> 0:20:18.760 process at the end of the day because it really 0:20:18.840 --> 0:20:23.680 gives evidence to what the needs are of individuals, and 0:20:24.320 --> 0:20:26.679 I suppose then helps us frame the outcome. What are 0:20:26.720 --> 0:20:27.960 things going to be at the end of the day. 0:20:28.040 --> 0:20:32.680 Because there's a difference between winning a divorce and winning 0:20:32.680 --> 0:20:35.600