For many individuals, the agony of divorce is followed by the wonder of finding love again. But, without wishing to sound like a killjoy, new-found love can be accompanied by some potentially nasty financial implications.
It is an issue facing thousands of Australians because of the rise in numbers of people getting together later in life.
According to the Australian Institute of Family Studies, of divorces granted in 2013, 34 per cent were to marriages where the husband was aged 50 or over, up from 15 per cent in 1990.
In 2013, the proportion of divorces granted to couples where the wife was aged 50 and over was 25 per cent, up from 9 per cent in 2000.
The key difference with younger Cupids is that individuals who enter new relationships in their 50s and 60s do not so much build wealth together, as spend it together.
The sad fact is that gold-diggers do exist, says Dianne Charman of Jade Financial. Even in the absence of gold-diggers, there are inheritance issues.
So, what should you watch out for if you want to share your life with someone else?
Advisers recommend that before couples move in together, they make a record of everything they own and put in place a binding financial agreement – the latest term for a prenup – with the help of a lawyer.
A binding agreement will detail how the finances are to be split if the relationship breaks down. They don’t always stack up in court, but it is worth noting that courts are more likely to tear them up if there is a material change in the couple’s circumstances. For example, if your partner moves in he may have some claim over the house even if this is not spelt out in the binding agreement.
Mindful of the need to avoid potential conflicts down the track, Claire Mackay of Quantum Financial says that it is important for individuals who get together to be open about their finances and what level of financial and other support they want to give their children or elderly parents, or when they might want to retire.
Couples living together will also need to arrange their day-to-day finances to their mutual satisfaction. A common model is to have both separate and shared bank accounts. The latter can be used to fund holidays, restaurant meals and a mortgage, should you buy a house together.
The biggest problems often occur not because of a relationship breakdown but in the event of the death of one partner.
“When someone dies, all the gloves are off. Wills can be contested,” says Charman.
As a result, spending money on a will that is as watertight as possible is critical.
A good will should enable you to, say, allow your partner to live in the shared house until his death, but for the home to then be transferred to your beneficiaries.
It is an area where a little bit of professional advice can go a long way.
Independence in love
Alice Wright (pictured) has always had her own income, even when a housewife, and now that she has begun a happy new relationship in her seventies, that is not about to change.
“Being good friends with the same interests is the basis of a relationship but somehow or other you have to be independent in the money area,” says Alice. “I’ve made it well known that what is his goes to his children and what is mine goes to mine. It’s important we keep all our own finances for our families. We’ve both worked for what we’ve got.
“We share the costs of the day to day but he has always been the breadwinner and wants to pay the essentials. He keeps his finances private.”
Alice, 73, works one day a week in a bedding store, capping a lifetime of work in the furniture retail sector, which included opening stores, buying stock and training staff around Victoria in a chauvinistic era.
“I work because I want to keep young. It gives me the opportunity to get out there and I can go back home and have something to talk about.”
Alice met her partner, a retired public servant, three years ago at a bowls club. She had been on her own for 20 years since her divorce and he had been a widower for 14 years. She moved into his house – the former marital home – a year ago.
“You don't expect to change them. You learn to get on with them,” says Alice. “I wrote a list a few years ago of things I wanted in a partner. There were 42 things on that list but No. 1 was ‘kind and caring’, and that’s what I got, with plenty of nice surprises.”
Case study: Natasha Hughes