Navigating monetary features post-divorce: How to interact with a wealth advisor

The broadly used Holmes-Rahe Stress Scale, developed to measure the causation between stress and sickness, ranks divorce because the second most disturbing life occasion. The case is additional difficult in a conservative nation like India. Though we nonetheless have one of many lowest divorce charges on the earth at 1%, the variety of divorcees has doubled over the previous 20 years. Divorce is extra prevalent among the many prosperous, and is an costly affair, laden with difficult monetary selections that severely impression the post-divorce lifetime of each people.

The state of affairs is usually extra overwhelming for Indian girls, 50% of whom will not be lively buyers, in response to a survey by LXME. Furthermore, a UBS world examine signifies that even for high-net-worth girls, the boys of their households handle their monetary planning. In this emotionally riveting interval, taking smart and strategic monetary selections turns into troublesome. Strategically planning alimony, navigating division of joint-owned properties, estimating streedhan, and funding aims post-divorce are essential selections that should be backed by technique.

While step one of a divorce is discovering a robust lawyer, few recognise the significance of a wealth advisor, who’re custodians of wealth for enterprise households and the prosperous. They guarantee emotionally-driven, unplanned monetary selections will not be made earlier than, throughout, or after divorce.

Bringing in a wealth advisor is essential at two levels: (i) During the divorce, they help in deciding settlement sums and supporting attorneys. (ii) Post-settlement, they navigate inherited wealth by guiding investments, advising on property and succession planning, and managing philanthropic aims.

Once a wealth advisor has been onboarded, listed below are 5 inquiries to provoke the engagement in the precise course:

1. Can you assist me perceive the monetary impression of my divorce, and the way do I work via the monetary problems with separation? Divorce has a big impression on earnings, property, money owed, and bills. The wealth advisor can present insights based mostly on the relevant private and non secular legal guidelines, and assist people accordingly make knowledgeable selections relating to property division, alimony, baby assist, and different monetary issues.

2. What are the tax implications of dividing property in the course of the divorce, and might you present me with steerage on find out how to reduce my tax liabilities? Each asset distribution has a novel tax implication. By analysing the tax foundation, capital features, and potential deductions, the advisor can present steerage on structuring asset division to reduce tax liabilities.

3. How can we handle possession of joint custody accounts throughout and after the divorce, and what must be accomplished to make sure each events have equal entry to the accounts? Managing shared monetary obligations of joint custody accounts is a big concern. A wealth advisor guides on organising acceptable permissions, establishing communication channels, and implementing methods to trace contributions and bills.

4. How will we demarcate our property if we have now co-ownership of an enterprise, what’s one of the simplest ways to find out the truthful worth of the enterprise, and the way can we guarantee every occasion will get their justifiable share of the property? While demarcating property in case of co-owned enterprise, courts usually depend on elements corresponding to monetary statements, market evaluation, and trade benchmarks to find out the truthful worth. The wealth advisor may help interact professionals specializing in enterprise valuation, guaranteeing an correct evaluation.

5. Can you assist create an funding technique to fulfill monetary targets post-divorce, and the way can I guarantee my funding is aligned with my monetary state of affairs and targets? After divorce, reassessing monetary targets and funding technique is essential. A wealth advisor considers elements corresponding to threat tolerance, time horizon, earnings necessities, and long-term aims, to advocate choices, and create a diversified portfolio aligned with the present monetary state of affairs and targets.

Divorce isn’t nice, and it should be admitted that no quantity of planning may assist handle the emotional burden of the method. But sound monetary planning is essential in the course of the means of divorce, and the position of a dependable wealth advisor is essential.

Nita Shivdasani is an government director and head of heritage at Waterfield Advisors

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Updated: 07 Jun 2023, 10:43 PM IST

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