Helping couples prepare for divorce
Putting together binding financial agreements (BFA) for couples is an untapped area for financial planners, according to Peters McKeown director Tricia Peters.
Peters McKeown is a Melbourne-based financial planning practice that specialises in estate planning for couples undergoing a divorce.
According to Peters, couples should put a BFA (or 'pre-nup) in place before they commit to a long-term relationship.
"They don't have to be made before the relationship - they can be made at any time. We often see BFAs at the end of a relationship, but they're obviously better made either before or during. And they should be updated every now and again, a bit like a will," she said.
Having a strong agreement in place is especially important for older couples who may have "repartnered" after a separation or divorce, Peters said.
In these situations the children (who may be in their 40s and 50s) often start to feel "nervous" about their inheritance, she said.
"What we've seen happen in a couple of cases is that - as soon as one of [the couple] has to go into aged care - the children file an application in the family court to say they're separated," Peters said.
At that point the family court will often divide the assets between the now 'separated' couple, which may not have been what the couple intended, she said.
Peters also works as part of a multi-disciplinary team in the Melbourne Collaborative Alliance (MCA), which brings together financial planners, child psychologists and lawyers to help families work through the emotional breakdown of a divorce.
Because Peters acts as a neutral in the process, she can't work with the same clients after the divorce. Instead, her business is based around referrals from lawyers who have come to understand the benefits financial planners can provide to family law clients.
Many of the clients referred to Peters are women who tend to feel "disempowered" when it comes to finance.
"I will start to educate them so they feel empowered and understand what the financial position is. Then I'll help them with budgets, so that the decisions that they make about the financial settlement are made in some kind of knowledge - full knowledge, hopefully - of what it's going to mean for them," Peters said.
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