Separating from your partner is difficult both emotionally and financially. When you separate, as well as potentially paying any costs associated with a separation or divorce, you’ll also have to separate your finances and divide your joint assets.
Make a plan for the interim
If you’ve always operated from joint accounts with your partner, it might be a good idea to open up a bank account of your own.
However, until you have finalised your property settlement, you should be transparent about this and also ensure that doing so will not result in a default of your obligations (e.g. to meet mortgage payments, household bills and/or in certain circumstances, to support your partner if they are unable to do so themselves and have relied on you to do so to date). The same can be said for any joint credit cards that you hold.
Reaching an agreement with your ex-partner about what financial obligations you are each going to maintain on an interim basis is key to assisting in the early resolution of matters.
For any joint loans or debts you have (including mortgages on property), you and your ex-partner will both remain legally responsible for meeting repayments, until a final agreement has been reached as to whose name the property and the mortgage is going to be transferred to (or whether it will be sold) on a final basis. This is the case even if you are no longer living in your former matrimonial home. For this reason, it is important that expectations about who is actually going to be responsible for meeting interim repayments is agreed from the outset.
Collect Relevant Documentation
Disclosure and the ability to provide documentation to support the financial contributions you made during the relationship, is an important part of the family law process. After you have separated, it is advisable that you maintain and keep copies of the following:
- Your marriage certificate
- Your birth certificate
- Your Passport
- Bank and super statements for all accounts
- Insurance policies
- Tax returns
- Documents associated with any family businesses
To help you get an overview of your current financial position (and the financial position of your former partner if you have the information), you can use the asset stocktake calculator online.
If you need a secure new location for your mail, set up a PO Box or have it redirected to a family member. Also make sure that you change any passwords for your email, or set up a new email address to deal with the matter.
Seek Legal Help
You and your ex-partner will need to divide your property, superannuation and other assets as well as your liabilities.
It is important, for a variety of reasons (e.g. stamp duty concessions, asset protection, protection from liability, etc) to ensure that any agreement you reach with your ex-partner is formalised either by way of:
- Consent Orders;
- A Financial Agreement; or
- A Court Order.
Even if you remain on good terms with your partner, it’s best that you seek independent legal advice and finalise any agreement you have reached. If you require help and support with your separation or divorce, or require legal advice on your situation, then please contact us.
Create a Plan for Income and Expenses
If you’ve never had to look after your own finances before, then you may find the possibility of doing so overwhelming. For this reason, you should sit down to work out your finances as soon as possible, including:
- Your weekly or monthly budget (including any debts you’re responsible for)
- Any government payments you may be entitled to (you can check here)
- Any child support payments you may be entitled to (you can check here)
- Whether or not you’re entitled to pay or receive spousal maintenance payments (you can discuss this with your lawyer)
Wills, Insurances and Super
Following your decision to separate, you’ll also need to update all of your important documents, so your wishes are protected.
Change your will to reflect any new preferences, and update your life insurance to make sure you’re still properly protected. You may also need to update your nominated beneficiaries in your superannuation fund.
You may also need to consider updating any powers of attorney.
While this checklist is only a starting point, your lawyer, alongside your financial advisor, will be able to work with you to create a plan for your interim and long term financial security. Should you require any further information about the separation process, or if you require family law financial advice, please contact us.