Getting divorced is one of the most challenging life events, not just emotionally but financially. In Australia, around 56,000 divorces were granted in 2022 alone, with the median duration of marriage being 12.2 years【ABS, 2023】. That means thousands of families each year face the complex task of dividing assets, restructuring household finances, and planning for an uncertain future.

For many Australians, the decisions made during this transition will shape their financial stability for decades. Early and professional financial advice can make the difference between long-term security and years of financial stress.

This article explains why financial planning during divorce is crucial, how assets should be assessed, the difficult trade-offs between property and superannuation, and the benefits of amicable agreements. It also highlights the role of a financial planner in protecting the future of both parties and any children involved.

Why Financial Planning Matters When Getting Divorced

Divorce affects every financial dimension: income, housing, retirement savings, tax, and even insurance arrangements. Unlike other financial decisions, divorce is rarely optional—so choices are made under stress.

A Grattan Institute report shows that women’s household income falls by over 20% on average after divorce, while men’s declines by about 5%【Grattan Institute, 2020】. Without planning, this gap can grow into a lasting disadvantage.

Professional guidance ensures that both parties:

• Receive a fair division of assets based on current and future needs.
• Avoid hidden tax and superannuation traps.
• Secure financial resources for children, where applicable.
• Plan for rebuilding wealth individually.

Assessing Assets: More Than Just Numbers

The first step in divorce financial planning is a clear asset inventory. This usually includes:

• Real property: the family home, investment properties, or land.
• Superannuation: often one of the largest marital assets.
• Savings and investments: bank accounts, shares, managed funds, and cryptocurrency.
• Business interests: companies, partnerships, or trusts.
• Liabilities: mortgages, personal loans, credit cards, and tax debts.

The Family Law Act 1975 requires courts to consider all assets and liabilities of both parties, regardless of whose name they are in【Attorney-General’s Department, 2023】. That means even assets “kept separate” during marriage, such as personal savings, can be included in the pool.

A financial planner can help identify overlooked assets (such as insurance policies or employee share schemes) and clarify how liabilities should be fairly allocated.

The House vs. Superannuation Decision

One of the most common dilemmas is whether to keep the family home or take a larger share of superannuation.

The House

• Pros: Provides continuity, especially for children; familiar environment; tangible and emotionally reassuring.
• Cons: Often illiquid; may come with high ongoing costs (rates, mortgage repayments, maintenance); may leave one party “asset rich but cash poor.”

Superannuation

• Pros: Secure for retirement; often tax-advantaged; less immediate expense.
• Cons: Locked away until preservation age; doesn’t provide immediate housing security.

In 2021, the median superannuation balance at retirement was about $154,000 for women and $210,000 for men【ABS, 2022】. This gap highlights the importance of ensuring superannuation is properly considered in settlements—women, in particular, risk significant disadvantage if they prioritise the house at the expense of retirement savings.

A financial planner can model long-term outcomes, showing the trade-offs between holding property and growing superannuation. For example, a $500,000 house today may appreciate differently than $500,000 in super over 20 years.

Benefits of an Amicable Asset Split

While emotions often run high, the financial benefits of reaching an amicable settlement are substantial.

• Reduced legal costs: Court proceedings can consume tens of thousands of dollars in fees. Mediation and collaborative approaches often cost less.
• Faster resolution: Delays in settlement can freeze assets and prolong financial uncertainty.
• Better outcomes for children: Reduced conflict preserves stability and resources for education and wellbeing.
• Less financial erosion: Avoids unnecessary liquidation of investments or property sales under pressure.

According to the Australian Institute of Family Studies, around 32% of separating couples finalise property division through formal agreements without court intervention【AIFS, 2021】. For most families, this cooperative approach allows resources to be directed toward rebuilding lives rather than legal disputes.

The Role of a Financial Planner

A divorce lawyer ensures compliance with the law, but a financial planner focuses on financial outcomes. Their role includes:

1. Asset modelling – Comparing different division scenarios to show long-term effects.
2. Cash flow planning – Ensuring each party can cover living expenses immediately after separation.
3. Superannuation analysis – Calculating the impact of splitting accounts and future contributions.
4. Tax efficiency – Identifying CGT or stamp duty exemptions available in family law settlements.
5. Future planning – Setting up insurance, wills, and investment plans for post-divorce security.

For parents, financial planners also help create child-focused budgets and investment strategies, ensuring children’s needs remain fully funded.

Protecting Children’s Future

Where children are involved, the stakes are higher. Beyond child support payments, parents must consider:

• Education funding: school fees, tutoring, or university costs.
• Housing stability: ensuring children can remain in familiar schools or communities.
• Insurance protection: life and income protection policies to safeguard against future risk.

Research from the Australian Institute of Family Studies shows that children experience better long-term outcomes when financial conflict between parents is minimised【AIFS, 2019】. Financial planners can structure child-focused agreements that shield children from financial instability.

Early Advice Makes All the Difference

The sooner professional advice is sought, the more options are available. Early engagement allows individuals to:

• Gather complete financial records before disputes escalate.
• Understand the value of different settlement options.
• Avoid irreversible mistakes, such as selling long-term assets prematurely.
• Plan a smooth transition from joint to individual finances.

Delaying advice often means decisions are made reactively—sometimes under legal or emotional pressure—leading to outcomes that may not serve long-term interests.

Common Pitfalls to Avoid

1. Focusing only on short-term comfort – Choosing the house but ignoring future retirement needs.
2. Overlooking tax implications – Asset transfers can have hidden costs if not structured correctly.
3. Ignoring insurance and estate planning – Divorce often invalidates wills and affects beneficiary designations.
4. Failing to budget for new expenses – Separate households almost always cost more to maintain than one.

A qualified financial planner works alongside legal professionals to prevent these pitfalls.

Conclusion

Divorce is both a legal and financial turning point. For Australians facing separation, early and professional financial planning is one of the best investments in future stability.

By carefully assessing assets, weighing decisions between housing and superannuation, and pursuing amicable agreements, couples can protect their own financial wellbeing and provide a secure foundation for their children.

A financial planner plays a vital role—ensuring both parties emerge with clarity, fairness, and a roadmap to rebuild.

 

References

• Australian Bureau of Statistics (ABS). (2023). Divorces, Australia, 2022. Retrieved from: https://www.abs.gov.au
• Grattan Institute. (2020). Women’s economic disadvantage after divorce. Retrieved from: https://grattan.edu.au
• Attorney-General’s Department. (2023). Family Law Act 1975 – Property and financial matters. Retrieved from: https://www.ag.gov.au
• Australian Bureau of Statistics (ABS). (2022). Superannuation balances by age and sex. Retrieved from: https://www.abs.gov.au
• Australian Institute of Family Studies (AIFS). (2021). Property division after separation. Retrieved from: https://aifs.gov.au
• Australian Institute of Family Studies (AIFS). (2019). Children and financial conflict in separation. Retrieved from: https://aifs.gov.au