Real Money Advice for Divorce

A three stage money guide to help you negotiate the divorce process and create a secure financial future for yourself and your kids.

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Divorce bombshell from shock jock Sandilands

Wilson and Analaura Luna

One of the biggest news stories this week is that radio ‘bad boy’ Kyle Sandilands and his wife Tamara Jaber are set to divorce, with most major news outlets speculating that financial problems may be the reason behind this latest celebrity divorce in Australia.

While most people would feel that it’s ridiculous for the Sandilands’ – who reputedly earn $5 million year – to have ‘financial problems’, this theory shines a light on an issue that has enormous implications in every marriage – how couples manage their money.

While the rate of divorce in Australia appears to be declining – down to 47 200 in 2008 from 51 400 just two years earlier – money problems are still a leading cause of relationship breakdown and divorce. With lengthy property settlement battles taken into consideration, it’s estimated that financial recovery following divorce takes an average of four years, but of course, few people could expect to be able to divide their joint assets and continue to maintain the same level of financial security that they held prior to their divorce. Although neither Kyle Sandilands nor Tamara Jaber are likely to have financial concerns as pressing as those of ‘everyday’ couples following their divorce, their split does raise the question: is it possible to ‘divorce-proof’ your marital finances?

In short – yes, there are things you can do to protect yourself financially in the event of a divorce. If one or both parties have substantial financial assets, it may be worth considering a binding financial agreement, more commonly known as a pre-nuptial agreement. Binding financial agreements can be created at any time before, during or after a marriage, and detail how a couple’s financial assets will be divided should they divorce. Another option is for each partner to have personal financial assets, as well as shared marital assets held in both names. These personal assets can include savings accounts and investments, and are designed to create a financial ‘safety net’ that can help protect against financial hardship if a couple divorces. Naturally these are just a couple of potential options, and you should seek legal and financial advice before deciding to take either of them to ensure that what you choose to do suits your circumstances best.

If there are no agreements in place, and neither party has personal financial assets, it can get a little more complicated, but there are still things you can do. The family law court will not allow the major breadwinner to stop providing income support or vital assets that were provided to a spouse during marriage, especially if there is an inequality in each spouse’s ability to maintain a ‘reasonable’ lifestyle following their separation. So, if you’re in a position where you’ve been left ‘high and dry’, have a chat to a family solicitor to find out what your best options are.

Celebrity divorces are usually in the headlines for all the wrong reasons – but this time it looks as though the Sandilands/Jaber split has been caused by the same ‘normal’ reason as the vast majority of other separations – financial problems. Which just goes to show, it doesn’t matter how much you have, finances can always cause problems in a relationship unless you work together on your money management.

If you liked this article you might also be interested in these other articles about divorce and separation:

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Want more? Take a look at the rest of our articles on divorce and separation.

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Author's Biography

Wilson and Analaura Luna are private wealth advisors and authors of Real Money Advice for Divorce, available online now, and in all good bookstores from 1 September 2010.