Way back in the ninth century, the world welcomed its first prenuptial agreement (probably signed with a feather and ink, let’s be honest). The infamous document was designed to ‘protect wives’ from the risk of financial instability after divorce.
A couple of millennia on, the world of love (and leaving) has evolved to look a little different. But it still takes a village and/or some careful financial planning to ensure that both members of a partnership are prepared for the costs and changes a separation might bring.
While we can’t ease the emotional burden of divorce and separation, we can provide some tips and advice to limit the financial strain. Read on for some practical information about the issues you may need to consider, along with information about where you can go to for more support.
But before we start talking about counting money, let’s talk about the importance of…
Having someone to count on
The range of emotions people can go through during divorce is huge – from shock to relief to sadness, grief and depression. Many people draw on support from family and friends during this time. In fact, research from ANZ shows that having access to social support networks is important to enable financial wellbeing – including whether a person can seek any kind of support from family, friends or their broader community.
But this support isn’t available to everyone. You may find that support and advice from an independent person is helpful – such as a marriage guidance counsellor or mediator. A financial advisor falls into this category too, especially if you need help separating complex accounts.
The government offers a range of information about divorce and other matters at Family Relationships Onlinedisclaimer. If you or your children are affected by violence, or are in danger, you should seek help immediately. In an emergency, you can call 000 for the police. You can also call 1800 RESPECTdisclaimer for details on support and safe refuge in your state or territory.
Taking care of business
Money might be the last thing on your mind while going through a breakup. But having the right financial plan in place can be the difference between a relaxed and comfortable lifestyle in the years after – or a long period of stress. Here are a few things to keep in mind:
Joint bank accounts, joint credit cards and other joint financial commitments can be a great way to save money while you’re partnered up, but they can also become tricky once you’ve separated, as you could easily wind up responsible for debts that your partner has created. You can take steps to limit this risk by separating your joint accounts.
The divorce process itself can be pricey, with legal documents to change, including your will or mortgage, and there may be legal fees if you need to get lawyers involved with negotiations on the decision itself to split up. Make sure you’re aware of the costs before agreeing to anything, and keep a detailed budget to ensure you don’t run into surprises.
After some negotiation, things like utilities and school fees may need to be transferred to the right person's name to ensure they’re being covered by the party responsible. For example, your home insurance policy may have been held in your soon-to-be-ex’s name. If it’s been cancelled and you suffer a loss, you may not be covered.
No-one likes it when their movie streaming recommendations are messed with by a different user. Ensure all your subscriptions, loyalty cards and rideshare details are updated to the right card holder and keep those playlists sacred. These little costs may be small, but they do add up.
Remember, you may be eligible for government support payments via Centrelink if your family circumstances have changed. Head over to Services Australia or call 13 61 50 to see if you qualify. And most importantly…
Speak to a financial advisor
It helps to call on an expert to help split things fairly and without fuss. While understanding the ins and outs of shared and unshared finances is incredibly empowering, it’s the job of a professional to understand the nitty-gritty details and give you the best advice that’s tailored to your situation.