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How To Rebuild Your Life After Divorce (using Financial Planning) | Hulya Gunay
Divorce is undoubtedly one of life's most difficult journeys, and often the financial planning required is an afterthought. On this episode of Hoxton Life, we're joined by Senior Financial Planner Hulya Gunay to discuss this incredibly important and sensitive topic.
Bringing over 15 years of banking experience, Hulya Gunay shares her expertise and her own personal story to highlight the challenges, from subtle financial control in a relationship to the opportunities for a fresh start.
Hulya details the real value a specialist financial planner brings during this time, helping clients navigate the complex financial side with clarity and support. She is a powerful example of how, with the right planning and support, clients can emerge from divorce in a much stronger financial position than they went in.
If you or your clients are facing this difficult journey, listen now to understand how expert advice can make the process as pain-free as possible, empowering individuals to secure their future.
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To be perfectly honest, I didn't even know divorce financial planning existed until my own divorce.
SPEAKER_00:Today we're gonna be diving into a really important and sensitive topic. Financial planning through divorce. I mean, look, there's some there's mad stacks, isn't there? I mean, it's like one in two people who get married will get divorced. Every time you remarry, that increases.
SPEAKER_01:But you don't actually need a solicitor to go through divorce.
SPEAKER_00:Obviously, it's extremely painful when you go through the divorce. You don't want that to lead on for years and years and years.
SPEAKER_01:So you spend these tens of thousands of pounds to legal proceedings where you can keep that money for your children's education.
SPEAKER_00:No one goes into any marriage thinking that it's gonna end.
SPEAKER_01:I made it my mission to help other women and families who's going through the same challenges.
SPEAKER_00:Hi everyone and welcome back to the Hoxton Life Podcast. Today we're gonna be diving into a really important and sensitive topic: financial planning through divorce. I'm joined by one of our senior financial planners, Julia, who's got a lot of experience advising clients through their divorce. She specializes in helping clients navigate the financial side of what is a really, really difficult time. We'll be covering the challenges, the opportunities, and the real value that financial planning can bring during what is often one of life's most really difficult times. So thank you very, very much for joining us today.
SPEAKER_01:Thank you for the lovely introduction, Chris. Great to be here.
SPEAKER_00:No problem at all. So to start off with, how did you first become specialized in divorce planning?
SPEAKER_01:To be perfectly honest, I didn't even know divorce financial planning existed until my own divorce, which is finalized in 2019.
SPEAKER_00:Wow, okay.
SPEAKER_01:And I worked, my my background is banking. Yeah. So I worked in large financial institutions internationally for over 15 years. And I had a career break when I had my twin boys. That's how we come across each other. Yes, we're the lucky ones. Uh and um I think in hindsight, that career break was in a way as a result of financial control within the relationship.
SPEAKER_00:Okay.
SPEAKER_01:Um, but obviously it can be very subtle, and sometimes you don't realize when you're going through it. And when I was going through my own divorce, which started in 2018, and I was also um training again to be qualified as a financial advisor, I realized how little financial guidance I was given by my legal team. And I thought, if I am in this situation as a banker, uh I was working at UBS Wealth Management when I hit my twins. Yeah, what about the other woman? Or what about the other families who's going through the same challenges that I've done? So now actually, it's I made it my mission to help other women and families who's going through the same challenges that I have done, but that with my guidance, hopefully, it wouldn't be as challenging for them.
SPEAKER_00:That's good. So it's your chance to give back. But also it's, you know, I think it's really difficult to advise people when you haven't necessarily been there yourself or you haven't seen things like that. And actually work, I'm not saying this is all you do, but you know, you have a lot of experience with this now. You obviously unfortunately used your own experiences in a positive to help others, which is which is absolutely fantastic.
SPEAKER_01:Thank you very much. That's what I would like to think so, because I can bring professional qualifications and experience, but also I can bring my personal experience, fortunately and unfortunately, fortunately for others, hopefully for my clients.
SPEAKER_00:Yes. So what like so someone you know starts um starts going through a divorce or divorce proceedings start to get initiated, or you're thinking this is not gonna end well for me and my partner. When when should you actually you know look for financial advice? Because a lot of people will go, well, I need a lawyer. Yeah. But what when when should you start looking for financial advice?
SPEAKER_01:To be perfectly honest, no offense to lawyers. And any lawyers who's listening to this, um, you know, nothing against lawyers, uh family lawyers, they're very valuable in the divorce process, obviously, providing legal advice, but you don't actually need a solicitor to go through divorce.
SPEAKER_00:That's really interesting.
SPEAKER_01:You don't you don't actually need need a solicitor. You can agree amongst each other, or you can go to mediation and then you can just send it to the court. This is our financial settlement order, consent order, or whatever it's called legally, then it's approved and it's all done and dusted. So financial advice, on the other hand, is in my experience, is more important to make a more informed decision based on what your situation is, what is the marital assets are, and understand the actual value of these marital assets, such as pensions. That's I think there was a research done by Legal and General, and they say like 23% of the couples waive their rights off the ex-spouse's pension in the financial settlement. And only 13% of the couples who is going through divorce take the pensions into account going through the separation of assets. Wow. So I think the sooner the better. And yeah, again, I think before you speak to a lawyer, speak to a maybe mediator, speak to a financial advisor, get your preparation ready first, and then hopefully try and resolve it outside the court, yeah, and amicably.
SPEAKER_00:Yeah, because that's that's key, isn't it? I mean, it doesn't have to end in everyone arguing and fighting, you know. A lot of the times, you know, yes, divorce can be messy and there can be lots of hurt, but actually a lot of the times it's just because it doesn't work between partners, and we see that uh, you know, and we see them want actually to resolve it amicably, and actually speaking to someone like your good self at the start of the process is a far easier and cheaper way for them to get the advice that they need.
SPEAKER_01:Absolutely, because we also can manage the expectations. Sometimes there's like unrealistic expectations within the couples going through the divorce um process, like, oh, you know, my ex cheated on me, so I'm gonna take all the assets, I'm gonna take 90%. That's not how law works. That's, you know. Um, so I think we can manage these expectations in a way, put some realistic expectations so that the process doesn't drag along. And in the end, if the process doesn't does drag along, it does harm everybody, mainly the clients, the family. So you spend these tens of thousands of pounds to legal proceedings where you can keep that money for your children's education.
SPEAKER_00:Yeah.
SPEAKER_01:Um, so I think it's about managing expectations and also being prepared as well.
SPEAKER_00:Yeah, definitely. It's about getting that good quality advice at the start, isn't it? And knowing that it doesn't have to cost hundreds of thousands of pounds to get to get a divorce. If it's not working and it's amicable, you can do it in uh, I think cost-efficient ways, probably the wrong word, but you know, it doesn't have to, it doesn't have to start eroding huge parts of your assets that you've worked really long and hard to build up.
SPEAKER_01:And unfortunately, that's what I see in a lot of the cases, and it just definitely makes my heart sink that all these assets that this family builds over the years, and even in my case, like we spend tens of thousands of pounds in financial costs, and we have got three children. So it's really, you know, if you can avoid it by getting the right financial advice, it's crucial. And also, once the financial settlement is agreed, you can't really change it. It's very, very difficult to make any variation in a financial settlement order once it's done. It's done. And if there is a mistake, you've got to live with it for the rest of your life.
SPEAKER_00:Yeah. And if you're if you're thinking about this at the moment, what things should I start to think about today to get together, kind of, you know, before, you know, to prepare before proceedings really begin?
SPEAKER_01:That's uh really great question because lots of people pass that stage. Yeah. Like, okay, I've had enough of this guy, or I've had enough of this woman, I just want out. And here you go, here's your, you know, the divorce application, decree absolute or whatever, here's the 50%. But it's not that simple. Lots of people go into financial difficulty following divorce. There is again lots of research has been done, like especially women. Um I think the reduction in income for women was like up to 50% post-divorce, because usually woman takes the um responsibility for the children. I'm not saying in all the cases, but most cases. So if you're a single parent, have got children, and you reduce your hours, then obviously um, you know, your income, and also you're a single parent, it's a single income household. You need to prepare. Is it actually like viable? Or what is the shortfall? Like, if that happens, if I go through divorce, we go our separate ways. What are the shortfalls? Do I need to, you know, increase my savings? Do I need to increase my income? Do I need to downsize? You know, financial planning. You know, if you fail to plan, you plan to fail. That's why people are going through hardships after divorce. And also, I think the preparation also includes gathering all the financial information, like your account statements, your joint account statements, uh, your individual um investment accounts, joint investment accounts, pensions, get everything together. And sometimes it's important to do that quietly without, you know, um, because we will also talk about, you know, how important it is to make the right declarations when you're going through divorce, but you got a plan for the process and you got a plan for afterwards.
SPEAKER_00:100%.
SPEAKER_01:Yeah.
SPEAKER_00:So the financial settlement you mentioned that once that is in place, that is yeah, that is done. That's that that's you can't go back once that's been got once once it's gone through and the divorce is finalized and you've good. What you know, that seems to me like a real pivotal part of this process on reaching. So can you walk us through the process you take a client through when looking at that?
SPEAKER_01:I actually started my own process in a way which I find or my clients find it quite useful. It's similar to our financial planning process. It depends on where they're in uh financial settlement process, to be honest, whether the disclosures are done. If it's going through courts and if it's going through litigation, usually there is a legal document called Form E, whether the form E's are exchanged. Form E is the document where each party um puts all their financial information, which is the fact find, what we call in financial planning. Um, if it's not exchanged, you exchange these disclosures between parties. If the solicitor is involved, the solicitors exchange this information. So first I have a look at what's in the marital pot. So that's the first stage of the process. And then, yeah, coming back to the reality element and setting up some goals. Because if you have got these really unrealistic expectations, I'm going to take the family home and he's going to pay me all the spousal maintenance. And if you go to the negotiations with that expectations and with that goal, then you're losing time and money. So we set the goals. We also talk about what's important to you, like the values. Um, I mean, that's the approach I bring in my financial planning anyway, values-based financial planning. What's important to you? Is your children's education more important to you? Or is it the area where you live is most important to you? So we talk about the priorities and the goals. And then we work on various different scenarios. And working with the scenarios, I use cash flow planning.
SPEAKER_02:Yeah.
SPEAKER_01:So what's cash flow planning? Cash flow planning, they put all these plugs, all these figures, like this is what your situation is, this is what you probably will get after the financial settlement, and here is what your financial future would look like.
SPEAKER_02:Yeah.
SPEAKER_01:So that really helps the clients to have clarity about their financial future. And they go into these conversations with their solicitors more informed in terms of look, if this happens, I'm gonna run out of money in my retirement. Then I actually want that. So the cash flow planning, cash flow analysis is the is the last stage, basically, like in three stages. Yeah, I do work with my clients who's going through financial settlement.
SPEAKER_00:And you talked, you know, obviously a lot of this is around the financial disclosure as well. So and you talked about that being really key during a divorce. And you actually said something a minute ago that piqued my interest, which was, you know, you kind of need to be a bit careful about what you disclose, but then obviously it needs to be fully transparent. So, how important is it for both parties to be open about their finances and what are the risks if they are?
SPEAKER_01:I mean, that's one of the issues that I see with a lot of my clients that I work with. So obviously, going through divorce, the trust is broken between the parties. I mean, you just I think there was a saying like you just see the real person when you're going through divorce. You know, you're with that person for a number of years, I was with my husband for 18 years, and then all of a sudden you just see a different persona. Yeah, so don't assume that they're actually going to make the right disclosures. And sometimes there's the the trust is already broken. How do you do divorce? It's a difficult one. In the UK, I don't know how it is in other jurisdictions, but it's um uh disclosure is you make your own financial disclosures, and if the other party thinks the disclosure is wrong, the onus is on the other party to prove that actually there is another asset here that you haven't disclosed. I see that, like for example, with crypto assets, which is which is a bit difficult to you know track, uh, but not impossible. If it goes to the court, court can order the statement, bank statements going back a year or however many years that it's necessary to go back, to be honest. Once you have all these bank statements and disclosures, court can order it. Uh, and then that the other party is liable to provide the honest disclosures. But if you think that's not correct, the honest is on you. Court is not going to go after um that other person unless you have got a ground to think that actually there is another pension. I've actually done that in my in my um financial settlement because I thought the the pensions that is being declared doesn't justify the number of years that this person has worked.
SPEAKER_02:Yeah.
SPEAKER_01:So I said, hold on a second, is that all the pensions? And then once you ask this question, the other party has to make the correct disclosures. If it goes to the court, and if the court orders that, and if they don't do the correct disclosures, there's legal consequences. But it's it's a tough one.
SPEAKER_00:And what can those legal consequences be? So let's say, for instance, they're lying in court. I mean, that's as far as I'm aware, a criminal offense.
SPEAKER_01:I mean, in terms of the legalities, I'm not really sure. But as far as I'm aware, it can even, you know, if you make the wrong disclosures, then the party talking about the financial settlement, for example, there are very few um occasions that you can go back to the court once the financial settlement is agreed. One of them is material non-disclosure. If you think that there is material means that it would make a huge impact on the financial settlement, you can go back to the court and ask for a set-aside order. So everything then needs to be looked into again. And it might be reversed, it might be changed if there is a material non-disclosure.
SPEAKER_00:Super, super important to get these disclosures right and be extremely honest at the start. And realistically, if you've lived with someone for so long, if they start saying, Well, what about this, what about that, what about this, and you haven't disclosed it, and you still keep trying to be tricky, then you know, ultimately you can um you can uh land yourself up in hot water. And on the flip side, it's there to protect the other person from someone concealing assets that you know that they know are there and they're trying to be uh untruthful about it. Another bit that you mentioned earlier, which was interesting, was that was the financial not manipulation, I think you said financial control. Control. So can you talk a bit about that and what that looks like?
SPEAKER_01:Financial control, as I said, can be like very subtle.
SPEAKER_00:Yeah.
SPEAKER_01:Um, I'm talking from my own experience and some of my clients' experiences. It's like usually in a relationship, one party makes the financial decisions. But it doesn't have to be like, look, this is my money and I'm doing this. It can be like, oh, you don't really need to worry about that. Uh you just are being left in dark in a way.
SPEAKER_02:Yeah.
SPEAKER_01:So I think that is financial control. So if you're not aware of the family finances, for example, then it is a form of control because your options are in a way limited. If you don't know that you have debts that you're not aware of, or if your credit rating or the other party's credit rating is bad, and your name is on the mortgage and the mortgage is not paid, then that affects you in the long term.
SPEAKER_02:Yeah.
SPEAKER_01:So it can be very subtle, and sometimes when you're going through it, you don't understand. Or financial control can be in the way of like preventing the other person from earning income, which was in my case, I wasn't working. But was it really my decision? It was kind of like it felt like my decision at the time.
SPEAKER_02:Yeah.
SPEAKER_01:Um, but now I'm thinking, no, I wanted to work.
SPEAKER_02:Yeah.
SPEAKER_01:Uh, so it's like preventing that person from having that financial freedom in a way, so that they stay within that bubble.
SPEAKER_00:Yeah, it's a really interesting concept, isn't it? And probably a lot of people are there that don't actually actually realize that that they're there. And from your experience, what are the main challenges that clients typically face during the financial resettlement process? Like what's the what's the big things that you normally see come up?
SPEAKER_01:I think disclosures is one thing. Yeah. Uh one party doesn't do disclosures.
SPEAKER_02:Yeah.
SPEAKER_01:They just drag their feet along. Then it has to go to the court. Even if it goes to the court, they still drag along their feet because one party wants to get divorced, the other party doesn't want to get divorced, or the other party doesn't want to share anything. Okay. They think that this is my assets, you're not getting anything from it. So one party doesn't comply with the process. The legal costs and the delay in the courts is another issue. The delay in the courts can be like up to three years. If you have got a contested divorce in your hands, people also think the court is going to make a decision. The court usually does not make a decision until the last like hearing, after three years potentially, because the court keeps expecting the parties and the solicitors to come to any agreement. They're not going to make a decision. They will wait. And the wait in the court's legal system here in the UK is crazy at the moment. Up to three years. My divorce. My divorce took full two years, and this was like a while back.
SPEAKER_00:And if you if you were to do it amicably, how long would like? So let's say that's like kind of a is that worst case, like kind of to a user, or is that typical, you know?
SPEAKER_01:No, it's a worse, it would be the worst case. Best case? Best case. I mean, if it's amicable, like a few months, three months, six months, you can so it can be super quick done. It can be super quick. Now the the legislation is is changed as well. There's something called no fault divorce. Previously, there was like you had to assign blame. You had, yeah, exactly. There should be a reason, or you should be living separate for two years or something like that. So there's no fault divorce now. You can apply to the court, get your divorce um, you know, uh agreed, get your financial settlement agreed, and send it to the court, consent order approved. You know, we divide the assets three to six months.
SPEAKER_00:We make that sound like it's like getting some uh IKEA furniture, don't we? But it's kind of like, you know, it's it's it's big. I mean, look, there's there's some there's mad stacks, isn't there? I mean, it's like one in two people who get married will get divorced. Every time you remarry that that uh that increases, doesn't it? From my understanding, um it's unfortunately it's statistically likely that if you do get married, you there could be a divorce at the end of it.
SPEAKER_01:Yeah, I uh as far as I know, it's 45% of the marriages end up in divorce and second second marriages, yeah. That's what I've heard. That's why, yeah, I'm not sure.
SPEAKER_00:45% is better than over 50%, like I was saying, but that's uh Yeah, almost almost half of the marriages, yeah. It's but it's it's it's a crazy stack because you don't I mean obviously no one goes into it. Um no one goes into any marriage thinking that it's gonna end. I mean, unless there is something seriously wrong with you. And obviously that kind of it's a really emotional thing. It's not like a it's like a normal, you know, kind of oh, we're just going down, you know, to get a pint of milk. It's you know, it's very emotional, it can be very draining, I think, you know, for for you and for your partner when you're clashing with someone on a constant basis, it's typically a not a nice time. So, how do you help clients stay objective and focused on their long-term future? Because at periods of time like that, it's super easy to become a rational and start, you know, rightly so. Like you're super memorable, you're super, you know, highly charged with emotion. How do you make them how do you help them understand that this doesn't last forever and that you are there is still future, there's still a future at the end of it.
SPEAKER_01:You're really right, it's a very emotional process. It's it's uh I think it's considered as one of the most stressful events after bereavement. I think that is kind of like the um scope of the trauma when you're going through a divorce, especially when the children are ill.
SPEAKER_00:Yeah, um to them as well, obviously.
SPEAKER_01:Yeah, it's um a lot of emotions. It's not easy, but that's the kind of like the part that I enjoy, and also the crucial point in client's life. You need to build the trust personally, yeah. Because as I said, there's trust is broken with the person that you think is closest to you, you are unlikely to trust somebody at that stage. I think building trust takes time and empathy is very, very important. You can't just keep talking about hold on a second, here is the passion, here is your DC passions, this is the final salary passions, this is the investment, this is your mortgage capacity, dandust go to the court. But that's not you know, in most cases, the client is not ready to even have this conversation. Yeah, and also by FCA standards, the clients going through divorce can be classified as vulnerable. Yeah, if a client is really emotionally vulnerable, if I think, I tell them, like, look, go and speak to a therapist. And if you want a third party to get involved with these uh conversations, just bring someone you trust. So always make sure that the client's vulnerability is assessed correctly with an FCA definition or within your your capacity to understand with empathy. And and and take yeah, take your time. Uh I think these this process cannot be rushed.
SPEAKER_00:It's um yeah. It's rushing can also lead to assets getting overlooked, it can lead to um undervalued in settlements. So, how do you help clients manage manage that? How do you make sure that the assets that are getting assessed are the true value? Because again, you know, let we take pensions, for example, and you and I both know if you have a final salary pension, it's two ways to look at that. There's the income and then there's the transfer value. And actually, the transfer value sometimes is not a true reflection of the income. So, but most people go, well, just give me a cash out value of what that's worth, and that's it, and we split it and we go from there. But actually, for you to buy that income again could be a lot more costly. So, you know, without nicking all of your answer, how you know, how do you help manage those more complex parts?
SPEAKER_01:Wait, um, pensions, you're very right. It's uh also the research shows like 13% of the people going through divorce take the pensions into account, and 23% of the people waive their right. I come across a case actually. Um the partner has got a teacher's pension, and then there's a property. Usually pensions and the property are the biggest assets in divorce cases, usually. And the wife said, I want the property. Usually, women have got this kind of emotional bond towards the family home, but the judge said, No, you need an income. So um, usually in legal proceedings, CETV, what we call the transfer value, the value of the final salary pension is taken into account, but you can't offset that with a property, it's not the same sort of asset because you need to equalize, equalize, equalize, yeah, um, not just the capital, but also the income in the future. So sometimes in this kind of cases, we can have a look, like an overall um look in terms of the value of the pensions, uh, what kind of income that each party can expect. But a pension expert on divorce, it's called POT or an actuarial report might be required in some of the cases. With teachers' pensions, I would recommend. With NHS pensions, I would recommend an actuarial report. And based on the actuarial report, then we can decide on the split what would be the split to equalize the income in retirement. If there is a business case, for example, there are business owners, one party sells their shares to the other party, then maybe independent business valuation needs to be um uh taken care of. So I do work with um different various professionals. Tax advice is important. We can give some tax advice in terms of when it comes to transferring assets, etc. But if it's a more complicated case, I always say, you know, speak to a tax advisor, make sure that this is um this is the correct advice. So 100%.
SPEAKER_00:And it's support, it would be now I'm not getting tall stankfully, but it uh at the moment, you never know, but I hope not. Um have enough of me one day. Um but it's nice to know that I would be working with someone that's not just saying they know it all jack of all trades, master of none. They're actually relying on experts in their fields to bring it in, which is so which is super important. And I suppose this kind of now. Kind of dovetails into how like a lot of people do instruct lawyers and not a lot of people you know will just typically try and get it done amicably. We know a lot of divorce is emotional. Lawyers will be instructed. How do you work with the client's legal team?
SPEAKER_01:Sorry, um, clients, the client's legal advice. The legal team, yeah. That's uh I think that's a still work in progress. Um lawyers, uh we usually, you know, sometimes I do get clients coming through lawyers, uh, because they really, you know, don't know what kind of financial settlement that could happen for them. Like they don't really under one party doesn't understand, especially, you know, if there's a financial abuse, financial control, that one party controls all the assets. And sometimes the legal professional passes those clients to us. So we educate them, help them to understand: look, this is what it means. And if you were to agree with that financial settlement, that would mean for you in the future. You know, can you get a house? What's your retirement look like? Um, your children's future, and etc. But I think it's a work in progress uh with the legal professionals. We have got a way to go.
SPEAKER_02:Yeah.
SPEAKER_01:Um, but like when with all professions, there's some lawyers who'm more open to get a financial advisor involved, and there's some lawyers who don't think that it's necessary. Yeah, but we get referrals at the end of everything is sorted. So it depends. But in most cases, I work in tandem. Like a client comes to me and says, My lawyer says, ask 900,000 pounds from the other party. And I'm like, has he got 900,000 pounds? No. So how is that going to work? So it doesn't work really. And then he or she goes back to the lawyer. So it's kind of various different ways of working with legal professionals. But I really, really would like to work more in collaboration with um legal professionals in the divorce area.
SPEAKER_00:So let's talk a bit more how you can do that then. So, like, what added benefit can you add to the legal professional? Obviously, you just said about you're asking you're asking for 900 grand he hasn't got 900 grand, but like what what uh value add can you add to the lawyers?
SPEAKER_01:I think that's a very good question. Um I believe in terms of the negotiations, we can bring a lot of information for a solicitor to go back to the other party, like for example, a cash flow projection or various implications, tax implications of various asset transfers. So instead of, for example, transferring this asset, then you're better off doing this offsetting with another class of asset, which doesn't become a taxable event, for example. And the cash flow projections, as I say, the solicitor can put to the other party, look, here's what my client's financial future looks like, because the the law takes into consideration the needs of both parties. If the needs of the both parties can be proved by a financial advisor, it's a really, really good tool to use in negotiations. And I think we as financial advisors should be able to demonstrate that how this can be a powerful tool for lawyers in their negotiations with the other party or if it comes to the court.
unknown:Yeah.
SPEAKER_00:Yeah, I think it's I think it's something that's massively overlooked, and actually two professionals working in tandem to provide their client with the best outcome that they possibly can is going to lead to a good client outcome, a good positive outcome for the client, which is the most important thing in this bit. You know, it's not to hammer the other side, it's to make sure that you end up in the best possible situation that that you come in, uh, or that you can be, obviously in a very in a very troubling time. So for clients who might not have a very who've not who might not have been very hands-on with their finances before, how do you help them build confidence and financial independence after divorce?
SPEAKER_01:Yeah, um, that's again something I really enjoy doing because that's kind of like, you know, my mission in a way. Yeah. To help, I say woman, but it could be anybody really who is, you know, not financially sevy or um maybe subjected to financial abuse and control in the in the relationship. Again, it comes to trust and it also comes to educating them. First, when you come to a person like that, you know, I think we should now look into these investments. First, they can be a bit hesitant because they don't understand what an investment bond is or why they should be investing into an investment bond, or all of a sudden, why they should be changing their investments within their pension and etc. But you just got to take your time and educate the client. And once they trust you at that level, they become a lifelong client. Um, I think education, definitely.
SPEAKER_00:It's it's tough, isn't it? Because if you have been a spouse partner that has not necessarily been the main breadwinner because you have been at home looking after the kids, you've not necessarily had the income into your bank account, you've kind of just relinquished control because you were focusing on uh other other things, to then have a large sum of money. You know, we see this with we we see this with lottery winners, we see this with sports people that have a large amount of money at once, and then it goes. So it is super important to make sure that you do seek proper financial advice on it from someone who's got your back and who cares about your outcome.
SPEAKER_01:So, so important because it can go very, very wrong.
SPEAKER_00:And there's no going back around again for uh after asking for more.
SPEAKER_01:Exactly. I I can't agree with you more. It's a it's a very good analogy in terms of the lottery winners or sports people. You got your time, you got to make sure that you make the right decision at that point because that's your time. And uh yeah, I can't agree more.
SPEAKER_00:Yeah, it's it's tough and it's it's not a nice thing to think of, but ultimately you have to make sure that you have life after. I remember speaking to someone, and um they were really bitter about their divorce, like they were really upset, and I it to me, I had the impression that they had recently got divorced, and then asked them how long it was they'd been divorced for, and they were like, 20 years, and I was like, Well, you know, you are you really haven't moved on, and they were like, I haven't moved on because of I squandered the money at the start, I didn't know what I was doing with it, and now I just live in anger at the other person for putting me through that and me not being you know 100% clear on how I can take it. So obviously it's extremely painful when you go through the divorce, but you don't want that to lead on for years and years and years. You want to be able to move on with your life and and you know focus on the future and your family's future.
SPEAKER_01:What I believe is like that's my personal view, and I do speak about that with my clients as well. You're never a victim. I mean, even if you are being financially abused, financially controlled, unless someone puts a gun in your head, you were there, yeah, and you chose it. And now choose something else.
SPEAKER_02:Yeah.
SPEAKER_01:Uh I I I do have some tough conversations with my clients. I mean, I did say one of my clients, like, you know, she was really upset about something. Maybe I don't know. Maybe I don't know. Was I hard on her? But I think she appreciated the conversation. I said no one cares.
SPEAKER_02:Yeah, it's true.
SPEAKER_01:Uh, it is what it is. We have this, and actually, it's it's not that bad. We can work on it. Yeah, or what's the option? Like, you have to work with it.
SPEAKER_00:But getting upset is not gonna make it any better, unfortunately.
SPEAKER_01:I think victim mentality is the worst one I see in in divorcing couples, like the example that you give.
SPEAKER_00:Yeah.
SPEAKER_01:If you're a victim, you can live your life as a victim or you make a different choice and empower yourself.
SPEAKER_00:It's super tough, isn't it? And that's it, it's about the empowerment. And that comes with knowledge, which is what you were just saying, and education. You can't be you can't you can't move on unless you take the time to educate yourself and to, you know, and to proactively move forward, which can be tough in the time, but you're gonna have to do it sometime. So you made the decision when that is.
SPEAKER_01:It's easier said than done. Don't get me wrong. I'm sitting here and talking uh like that now, but it's it's not that easy, but you know, you have to make different choice.
SPEAKER_00:Was it hard for you?
SPEAKER_01:Very hard, yeah.
SPEAKER_00:I bet. I bet. And it takes, I think it's like you said, it's time is a healer. Um, but working with someone who knows what they're doing and has been there and has your back is you know, it's just it's it's it's like any problem. A problem is better halved, and a problem when someone has been there and knows that you can get through this and has been in the shoes that you are wearing. I think people take a lot of comfort from that as well.
SPEAKER_01:Definitely. I think you know that really helps me to have that bond and a trust with my clients, yeah.
SPEAKER_00:That knowing that I walked in their shoes, and obviously, people with families we taught this is difficult as well. So, how does working with financial player help your children, help your kids?
SPEAKER_01:Uh, there is a lot to consider when there is kids involved.
SPEAKER_02:Yeah.
SPEAKER_01:Um, especially if they're young, because there is a long future ahead of you. There is a one cloth, and then you split it into two, the resources all of a sudden are not there as much as it was before. But I think children need to be the priority.
SPEAKER_02:Yeah.
SPEAKER_01:Uh for I think court takes that stance in terms of they take the children's needs first. But I think one of the areas that's been overlooked in financial settlements, what I see, is insurance policies. Um if there is a child maintenance, spousal maintenance, if one party makes these payments, it's really crucial to protect with the appropriate protection policies, these maintenance payments, because if something happens.
SPEAKER_00:So this is things like life insurance. Yeah. Yeah.
SPEAKER_01:Or income protection, critical illness, TPD, total permanent disability.
SPEAKER_00:Yes. Which is a really interesting point because it's like what happens if you're receiving this maintenance payment and then your partner dies?
SPEAKER_01:Exactly.
SPEAKER_00:What happens if you're receiving this maintenance payment and your partner loses their job? Exactly. So what have you put in place to cover it?
SPEAKER_01:That's protection is very, very important. Yeah. And the other thing is post-divorce, that's a post-divorce one. I think we're going to talk about that, but um the intergenerational planning is very, very important. Yeah. So you've got to go through all your, for example, the pension plans, make sure that your children are the beneficiaries. Because you never assume that there might be a third party get involved afterwards, um, after the settlement. And then what happens if something happens to your ex-spouse? So the third party is beneficiary. You can actually prevent that. You can discuss these things in the divorce settlement.
SPEAKER_00:Interesting.
SPEAKER_01:Which I think it's really, really crucial.
SPEAKER_00:A lot of people don't get. So let's talk about this then post-divorce. Yes. So post-divorce financial advice. You now have a sum, you are able to move on with your life in an empowered way, you're in a really good position. Uh, for you personally, weight has been lifted off your shoulders. You know, you can now move on and start getting on with your life, and then you meet someone else, uh, which is natural for a lot of people. Yeah. Everyone wants to be happy. Uh, and if being with someone else makes you happy, then you know, by all means go for it.
SPEAKER_02:Yeah.
SPEAKER_00:How can you make sure? And it goes the other way as well. How can you make sure that the assets are protected? And what things should you do post-divorce to uh to make sure that you don't end up losing what you've got?
SPEAKER_01:I'm just thinking, you know, um, from my personal experience, like if one party has the property, let's say, uh, or bought the property with the proceeds within the financial settlement, maybe that property can be put into a trust, yeah, with the children being the beneficiaries. So when something happens to that person, the property or that particular asset goes into a trust, and the third party, whoever they meet after the divorce, is not part of this asset being distributed. That could be discussed in the financial settlement case. People don't even think that is going to happen. I do sometimes have these conversations like, oh, nobody would want my ex. You would be surprised. Yeah. You know? So that's a bit like, yeah, that that happens. Like, who would want him? But you you never know. I think the right structures for intergenerational planning, keeping the children uh as a priority for further down the line after the assets being divided is crucial, and it's hardly, hardly being talked about because this is people are so bogged down in like, I want to get out of this, yeah, I want to finalize this.
SPEAKER_00:Well, let's let's discuss what that looks like as well, because that's really interesting. So, you know, I um have a house, I um with my wife, we divorce, my wife then takes the house, um, and if the house is given to her, it's in her name, yes, and she gets remarried, the house that we had could potentially be split between her and her new husband. Yeah, instead of going to your children, or the other way around, my house with my new wife, if I was to get remarried, if someone wants to want me, then uh could get um could get split between my my new wife and her family, uh, you know, not not my not my children. And I actually saw that with my dad. So my my grandma passed away, it was in a divorce. Um my granddad got remarried, and he obviously his will was null and void, and his assets ended up going to my um his new wife, and you know, most of the assets didn't go to to the to my dad and his brothers, where probably my nan would have wanted them to. Um, you know, and it and that's the same, uh that's the same in that scenario. But the remarriage is a really interesting part, and it's also but you know, wills become null and void as soon as you get remarried anyway, yeah. Um and these all things, it's that protection element that people think it's just all at the time, it's just the assets. What's happening with the assets? And it's not it's yes, the assets are important, but it's the future plan of those assets as well. Exactly. And that's where you can add a lot.
SPEAKER_01:Yeah. So I'm really glad you brought your personal experience as well. So a lot of my clients who's gone going through or gone through divorce themselves are now looking into intergenerational planning more seriously because they don't want their children to go through the same experience. Because if you set up a trust, for example, after you get divorced, you have a property, you set up a beneficiary protection trust, let's say, um, then their children will not worry about divorce proceedings because that property then will not be in their name and it will not be subject to divorce proceedings.
SPEAKER_02:Yeah.
SPEAKER_01:It because it won't belong to them. So my clients who've gone through that are more open to this kind of conversations because they've they've been through it.
SPEAKER_00:It's really interesting. Yeah. It's a really important fact that I think is uh is is massively, massively overlooked.
SPEAKER_01:Yeah.
SPEAKER_00:Um anything else on life after divorce that you think that we should we should touch on, or we haven't touched on?
SPEAKER_01:Uh life after divorce. Um, I think from a financial point of view, uh planning is very, very important. As I say, lots of people were living in the middle of cost of living crisis. It's hard to live even with two income. You're going to be a single income household. Just make sure that all your gaps and everything shortfalls is covered and you have a plan for that. And you have a plan for your retirement. For example, if you're sharing your pension with your spouse, then you have a gap in your retirement planning. How are you going to cover that shortfall? Start planning for that as well. Um, and there's life after divorce.
SPEAKER_02:Yeah.
SPEAKER_01:I'm sitting here um talking to CEO of an international wealth management firm. Whereas how many years ago I was sitting in court. So this too shall pass. There's going to be life after divorce. It's just about making the right choices and getting the right advice.
SPEAKER_00:Fantastic. I was going to ask you for a success story, but I think you are one of them.
SPEAKER_01:Oh, thank you. Thank you so much. I really appreciate it.
SPEAKER_00:Which is really, really nice to see. And I think for people watching this, it will empower them to number one, hopefully get the advice that they need, but also for them to be able to see someone who's done so well after such a difficult time as well, which I think is uh which I think is super important. So thank you so much for sharing your insights and most important, your personal experience as well, because I know that can be really difficult. Um, you know, divorce is undoubtedly a really difficult journey, but with the right planning support uh of someone like your good self, clients can come out the other side in a in a much stronger financial position and ready for a fresh start, which is key. So if you're listening and you would like to learn more about how we support clients through divorce at Hoxton Wealth and speak with the amazing Julia, uh please feel free to reach out and get in touch, and we would be only too happy to help in what will be undoubtedly a very difficult time, but we'll try and make it uh as pain-free uh as we possibly can. Thank you for listening to this episode. I really hope you enjoyed it. Thanks very much, most daughter, for uh being a big part of this.
SPEAKER_01:Thanks for giving me the opportunity, Chris.
SPEAKER_02:Thank you.