Saturday 7 December 2019

Life after death: Let professionals handle your affairs

Re-organising your financial affairs after a death or separation is best handled by professionals

There is a lot of help out there for couples trying to negotiate the split of their assets
There is a lot of help out there for couples trying to negotiate the split of their assets

John Cradden

Dealing with the financial consequences of the sudden death of a life partner or a separation or divorce can be extremely difficult at any age, but these events can be all the more traumatic when the couple is over the age of 50 or 60.

When it comes to separation and divorce among older couples, there is no doubting that the trend is moving upwards.

In the UK, the Office for National Statistics reported last year that the proportion of people over 60 separating from their spouses has almost doubled in a decade.

The most recent Irish figures from the CSO and the 2011 census show that the number of separated and divorced people in Ireland increased by 22.3 pc, from 166,797 to 203,964 between 2006 and 2011 - two thirds of the increase was among those 55 and over.

Although 'divorced' still remains a marginal status for those over 65 (just 1.6 pc of the population) this figure has almost doubled since 2006.

Some have dubbed this rising trend for 'silver splitters' as a baby-boomer phenomenon because many couples in this age group have greater financial security than previous generations.

Bob Quinn of Kildare-based financial advisors The Money Advisors, has dealt with a few clients who have experienced a sudden death of a partner or a divorce and needed help in re-organising their financial affairs.

He says that, in his experience, women are much more familiar with financial matters and often much more effective at managing their finances than their male counterparts.

"We are getting married later in life so the period of single living teaches both sexes about managing finances independently."

On the other hand, he notes that with many 'silver splitters', the consequences can be quite devastating if only one half was the sole or main earner.

"If one - and it's historically been the woman - was the homemaker, then she may need to navigate her way through opening up a new bank account, setting up direct debits and so forth," he said.

"In the instance that she has a small pension or irregular income, she may have to become reliant on the use of overdraft facilities at more expensive times of the year, whereas before she may have been relying on joint finances to run the household.

"It's when less well-off people have to rely on things like overdrafts and credit cards that ignorance or inexperience can come with a hefty price tag."

The main challenge for widowed clients, he says, may not necessarily be about setting up bank accounts and so on but simply trying to balance the books without the income coming in.

The good news is that there is a lot of help out there for couples trying to negotiate the split of their assets and liabilities, or helping a surviving partner re-engineer themselves financially so that no one faces penury in their pensionable years.

Furthermore, relationship experts say the growing financial independence of Irish women plays an important part in older women finding the strength to move on from their marriages.

All the same, either partner should choose who they approach for help carefully.

"Clients have different support networks and often times, after a long drawn-out divorce, many people are willing to deal with a professional adviser as opposed to a family member," said Mr Quinn.

"A professional adviser is unrelated to the dispute and can often times bring a much-needed fresh set of eyes to the situation.

"However, in reality, clients can often slip into the bank manager or solicitor for 'off the record' kind of advice as opposed to professional, reliable advice. This can often be costly in the long run."

In the case of separation, Mr Quinn advises couples to focus on what their lives will look like in the next one to three years. For example, if one partner might need to take out a loan at any stage, they should look at their credit rating.

"With joint borrowings, if one of the spouses reneged on repayments, it may have a negative impact on the other spouse's credit rating. This can be difficult to shake in the immediate future."

For those people who have been widowed, ensure you are making clear decisions that are not clouded by grief or sentimentality, says Mr Quinn. "Just because Jim or Frank or whoever liked investing in Aer Lingus does not mean the widowed party should continue with the late spouse's investment strategy."

Irish Independent

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