Family separation (or stress) during COVID-19?

27 July 2020

Denise Harrison, Wealth Adviser |

“It's only when the tide goes out you know who's swimming naked.” Warren Buffett.

This quote from Warren Buffett is referring to people going out on a limb when taking investment risk and finding themselves over-exposed when the market corrects. However, it can also apply to other areas of our lives - when pressure is applied, cracks appear.

Social distancing has meant more time at home for many of us and likely more time in the company of family. There has been much discussion on the challenges of social distancing, working from home and home schooling, particularly with younger children. These are stories many of us have shared and laughed about. However, less amusing is where the added pressures have negatively affected relationships and some couples spending more time together have begun to see cracks emerging.

Trying times can create challenging scenarios

Relationships Australia's May survey demonstrated 42% of respondents reported a negative impact to their relationship due to isolation. Meanwhile, national information and mediation group, The Separation Guide, reports a 314% increase in the number of couples considering separation compared to before Australia went into social isolation. Numbers seeking end-of-marriage financial advice jumped 116% and the volume of people seeking psychological advice rose 136%.

For some couples, navigating challenging times will lead to working on communication, understanding and tolerance, and coming through the current situation stronger. The Relationships Australia survey confirmed this, showing a fifth of those couples who said they were challenged by their living arrangement managed to create positive changes to relationships.

For others the solution may result in parting ways and going it alone. Change like this can be unsettling or even frightening, with many uncertainties. This can be amplified if children are involved.

Seeking advice

Although family and friends want to help if you plan to separate and divorce, getting advice from a trained professional is recommended to get the best outcome. As with most things, divorce is not a one size fits all. You need to find what works for you based on your priorities and values specific to your situation.

This also applies to getting financial advice through the separation process. Professional advice can help you understand your financial position and what it means going forward. It can also support your legal case by providing clear information, helping source up to date valuations and identify any implications, such as capital gains implications.

The use of projections can show you how you can meet your income needs and make the most of the resources you receive. Ultimately, it puts you in control of your future by understanding your position and the choices you have so you make the most of life after divorce.

Knowing where you stand and how this looks going forward can support the healing process and reduce the stress you feel during this time. You don’t need to go it alone. Seeking financial advice provides you with experts who can guide you through the legal and financial aspects of separating.

If you are currently going through family separation or divorce, contact a BDO Private Wealth Adviser.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact the BDO member firms in Australia to discuss these matters in the context of your particular circumstances. BDO Australia Ltd and each BDO member firm in Australia, their partners and/or directors, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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