Any separation is incredibly difficult, and can cause a great deal of emotional and financial strain for all parties involved. However, agreeing on a financial settlement or parenting arrangements does not have to be difficult, and can be worked out by agreement/consent. In this blog, we’ll discuss some of the simple steps you can take after you’ve told your partner that you’d like a separation that will help you tackle what can sometimes feel like an overwhelming task of separating your financial ties and agreeing on the living arrangements for your children.
Understand your financial situation
Ideally, you should familiarise yourself with your financial position before you decide to separate.
However, it is not unusual for one of the parties to the relationship to be more familiar than the other due to the roles they undertook during the relationship. Alternatively, one party may have more access or control over the parties’ income or assets, making it more difficult for the other party to understand their financial circumstances in the post-separation world.
When you and your partner separate, the Family Law Act 1975 states that both parties must provide ‘full and frank’ disclosure of their financial position, including their assets, liabilities and superannuation interests, as well as their sources of income and/or financial resources.
In order to ensure your obligations of disclosure are discharged, and to assist in being transparent and hopefully reaching an early settlement, you should begin to gather and exchange all relevant financial documentation that is in your control with the other party. If it is the other party that has the documents in their control, you should be prepared to make requests for these documents early on.
The documents you should be prepared to provide, obtain copies of or request include (but are not limited to) the following:
- Bank account balances and statements for the past 12 months, including joint and individual accounts;
- Any superannuation balances;
- Written confirmation of any debts or liabilities that are held jointly or separately;
- Insurance policies in sole or joint names;
- Full details of any assets held in sole or joint names, such as vehicles;
- Bank valuations of properties (including residential and commercial properties);
- Taxation documents, including tax returns and notices of assessments, for at least the past 3 years;
- Credit card statements for the past 12 months;
- Personal loan statements;
- Details on investment portfolios;
- Documents relating to any inheritances, compensation payments or lump sum payments received during your relationship;
- Details showing any items owned by parties before they began living together
If you have any of these documents (or anything else you think may be relevant), you should take a copy of the original and then collate all of your copies, storing them in a safe location until you pass them to your legal representative and/or the other party.
If you do not have access to this information (potentially because your ex-partner dealt with finances), then you can discuss this with your solicitor who can assist you in obtaining these documents.
Talk about and agree on (at least) short term living and financial arrangements
You should also have a discussion with your partner about short term living and financial arrangements – both with respect to yourselves and the children.
For example, you will need to decide:
- who (if anyone) is going to move out of the family home;
- how, when and where each party will spend time with the children (at least in the short term);
- who will meet joint liabilities and expenses such as mortgages, rent, household bills, loan repayments, school fees, etc.;
- whether any joint assets should be listed for sale (and what the terms of sale should be).
Meet with a solicitor
If you are not able to agree on short term living and/or financial arrangements – either for yourself or the children – you should seek legal advice as soon as possible.
However, even if your separation with your partner is amicable and you are able to agree on short term arrangements, you should still seek legal advice so that you can understand both your legal entitlements and obligations.
It is highly recommended that this meeting with your legal representative takes place before you begin to divide assets and liabilities. That way, you can make informed decisions and take advantage of any taxation benefits that are available when a settlement is formalised by way of a Court Order or Financial Agreement.
When selecting a solicitor to deal with your separation, you should select an independent solicitor who specialises in family law mattersFa. Your meeting with your solicitor will remain confidential and, after your initial consultation, you can decide when you require further advice or help with the legal separation process.
Consider mediation and/or family dispute resolution
While Family Dispute Resolution is a pre-requisite for any court application relating to parenting matters (that are not orders made by consent and presuming there are no issues such as domestic violence, urgency or risk of harm/abuse), parents are not required to attend Family Dispute Resolution if they are able to reach an agreement about parenting arrangements on their own.
However, parents are encouraged to attend Family Dispute Resolution to ensure that they are covering off on all potential issues with respect to parenting matters that they may not have contemplated without the benefit of legal advice – e.g. decisions in relation to long term issues such as the children’s education, religion and health, how holiday time will be shared between the parents, whether there should be any restrictions placed on interstate or overseas travel and how parents will reach a resolution with one another in case of a dispute.
Attendance at Family Dispute Resolution early on can assist parties in thinking about these issues, reaching an early resolution in relation to same and ensuring that any formal documents (e.g. Parenting Plans or Orders) provides for it.
While attendance at private mediation with respect to property matters is not a prerequisite for an application to the court, parties should be encouraged to attend mediation, again to reach an early and comprehensive resolution to all financial issues.
The success rates of reaching resolution at mediation and/or Family Dispute Resolution are very high for family law matters and are a fantastic way to curtail costs and avoid litigation.
Communicate your decision to separate
You should also communicate your intention to separate with your partner, first and foremost, to your partner directly. Disputes have arisen with respect to the date of separation when a party has not clearly communicated their intentions to their partner, which can have both procedural consequences with respect to when you become eligible to apply for a divorce and can also have significant financial consequences. As such, it is advisable to consider confirming your intention to separate in writing to your partner, following your verbal discussion with them.
You should also discuss with your partner how you’d like to communicate the news of your separation to family and friends. There is no legal requirement for you to tell a third party, however, it may assist you to discuss what information you are going to provide to others to ensure that you can keep things as amicable as they can be, which is helpful when it comes to dividing assets.
More importantly however, you should also discuss with your partner how you are going to tell the children about your separation. If possible, this should be done jointly and should always be done in an age appropriate and child focussed manner. Reassure your children that you and their other parent still love them, even if you are no longer going to be living together, and that they do not have to worry about their own living arrangements (i.e. that mum and dad are going to make all of those decisions together). Try and keep the conversation as positive and respectful as possible. Answer any questions that they have as honestly as you can, but do not go into any detail about the reasons for separation and/or any financial issues. Remember that you and the other parent are going to be co-parenting your children, at least until they turn 18 (but probably a lot longer than that!) – so laying the groundwork for a positive co-parenting relationship early on will give you the best opportunity to do so.