The ripple effect of Trump’s tariffs on divorcing couples

Divorce can be a complex and emotionally taxing process. The global market’s response to the introduction of tariffs has brought about additional financial uncertainties that can further complicate the division of pensions, investments, property, other physical assets and business interests.

• Pensions. Tariffs can lead to market volatility, affecting the value of pension investments. In turn, this could reduce the value of any potential settlement that includes pensions
• Investment portfolios. The value of investments may fluctuate significantly during divorce proceedings which can complicate the division of assets, and possibly lower the value of a settlement
• Luxury assets. High-value assets such as luxury cars, art and property can be impacted by economic instability. The tariffs may affect the market value of these assets, making it challenging to agree on fair valuations for division
• Business interests. If either party owns a business, tariffs can impact its profitability and valuation. This can complicate negotiations around business assets and future income projections
• International assets. Tariffs can affect currency exchange rates and international market stability which can impact the value of international investments and properties

The introduction of these tariffs will also have an impact on the overall cost of a divorce as well as the value of the assets involved in securing a settlement.

High net worth divorcing couples will often need specialised legal advice. The economic impact of tariffs may increase the cost of these services, adding to the overall expense of the divorce itself.

There are also potential tax implications. Tariffs can influence tax policies and rates, possibly affecting capital gains and other taxes related to asset division.

There are a number of ways a financial planner can help during a divorce, especially during periods of economic instability.

Working with you from the start

Many people seek professional financial planning advice after their divorce settlement is finalised. However, engaging a financial planner early in the process can be beneficial, as they can help shape the divorce settlement itself. Financial planners assist those going through a divorce in making informed decisions, reorganising their lives and taking control of their financial future.

When considering the current state of affairs in the financial markets, working with a financial planner early in the process is extremely important. They can help cut through the media hype and noise, giving you clear, considered guidance and help to ensure a fair outcome.

In some divorces, one person may have been more involved in managing the couple's finances and possesses greater financial literacy. This can sometimes leave the other person at a disadvantage due to a lack of knowledge and experience. By engaging a financial planner, both parties can gain a clearer understanding of how different investments and assets work, particularly in the context of a financial settlement, and how tariffs might affect their overall financial situation. Understanding these potential impacts is crucial for navigating the divorce process effectively and ensuring fair outcomes.

Using cashflow modelling

At Evelyn Partners, our financial planners use cashflow modelling to forecast your future finances. It’s incredibly useful in divorce planning as it shows how much money you will need to live comfortably and as such, can help to shape a divorce settlement figure.

Your financial planner will collect information about your current and projected monthly income and outgoings, savings and other assets. They will analyse this information along with your future goals and requirements, including how much you would need in order to purchase your own property.

They will also develop various scenarios to assess their potential impact on your finances, including a possible decline in the value of investments secured as part of the settlement or even a market crash. This analysis will enable you to determine whether you will still have sufficient funds to maintain a comfortable lifestyle should adverse conditions arise following the tariff announcements.

It is evident that the impact of Trump's tariffs is extensive, and divorcing couples are not exempt from the potential consequences. However, our experts are here to guide you through the divorce process against the backdrop of the current global economic climate. For more information on how we can help to shape your divorce, book an appointment now.