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Separation and divorce is one of the most stressful and painful experiences. Knowing what to do next can feel overwhelming. How you manage your finances is different for each couple and family. Here are some useful tips to help you start to make steps towards separating financially with your former partner.
Try to discuss your intentions first with your ex partner before making any changes to your finances so that your relationship remains amicable. That way no one feels 'out of the loop' and will hopefully minimise conflict.
1) Bank accounts:
It is common for alot of couples to have joint bank accounts during their union. If this is you, create an inventory of what comes into the joint account i.e. wages/salary and what outgoings there are from this account. Once you have that inventory, figure out how you want to manage those items, you may want to consider re-directing incoming and outgoing from a personal account, however discuss with your former partner so you both are on the same page. These items may include:
Individual wages/salary
Joint savings
Other income i.e. Centrelink Family Tax
Outgoing expenses and direct debit (rent, mortgage, utilities, insurances, rates, gym, streaming services, daycare etc)
If you both continue to live in the same home temporarily or long-term there maybe no change to how you continue to pay for these expenses. If one of you move out, your arrangements may look different where one of you takes on all or partial responsibility for certain bills and the other contributes an agreed amount. This is common where there is a mortgage, rates etc.
When it comes to joint savings decide whether you both need to withdraw any joint savings to help you both get started particularly if one of you will be moving out. This may be a buffer until you start formal negotiations on your property settlement and lessen the stress of paying for services to assist with this such as solicitors, financial planners etc. Discuss with your bank also how to safeguard your savings until a formal agreement is in place oh how to divide these account.
2) Credit cards
If you have a credit card, check that you do not have your former partner as an additional card holder, this means if they spend any funds you will be liable for those payments.
3) Utilities/Policies
Ensure that any utilities such as power, internet, insurance policies are in the correct name of who will be residing at the marital home. If you both decide to make no change and you no longer reside at the marital home, understand that you will also be liable for payments should the residing partner fail to pay.
4) Household contents and chattels
Start to discuss and divide what each of you will be keeping, this may not occur straight away but if one of you decides to move as planned or not planned you will save alot of trouble and possibly arguments if you pre-decide on what you are each keeping. Prepare a list of what each of you will keep, throw away, donate, sell etc for safekeeping until you require it.
5) Prepare for the future
If you are considering a financial settlement at some point in the future whether immediately or within the coming months/years, start to prepare and collect important documents that will become useful. You can also request the same from your former partner and exchange paperwork so you both feel satisfied with disclosure when entering formal negotiations:
a. Tax returns
b. Payslips
c. Credit card statements
d. Bank statements
e. Mortgage statements
f. Superannuation statements
g. Share portfolio
h. Business information
If you would like to have a chat to discuss how we can assist if you are ready to start moving towards your financial settlement, please contact Experienced Mediators.