Financial Separation Checklist: Bouncing Back When Your Assets Are Halved
5 things you need to consider about your finances for a smooth separation or divorce
Separating from your partner is a difficult, challenging, and often confusing time. When it comes to dividing money and assets, it can be tricky to know where to start.
In many partnerships, one person tends to take the lead in managing finances so when it comes to separating, this can often leave one partner in the dark. But that doesn’t have to mean you stay in the dark.
Whether you are confident or unsure about your current financial affairs, separating is likely to lead to some big changes that are difficult to navigate.
With the help of Central Coast Financial Planning Group, we can help you gain more clarity and control over your new financial situation as well as how to prepare for your path ahead.
Usually, after a separation, it makes sense and seems fair that property and assets are shared. However, the way that is is shared and the steps to take will depend on your individual circumstances.
In most cases, you will want to do what is fair for both of you while making sure that your money and property are best protected.
When we say “property”, we don’t just mean your house. According to the Australian Government Initiative, Family Relationships Online, here are the things that are included as property when you are separating:
- Your home
- Bank accounts
- Businesses
- Family trusts
- Inheritances
- Jewellery
- Debts (including your mortgage)
- Cash
- Investments
- Insurance Policies
- Superannuation
- Vehicles
This is a pretty large and overwhelming list but there are simple steps you can take to ensure you best manage your separation to protect you and your family.
Here are 5 things to consider and plan for when financially separating:
1. Resolve living arrangements and the financial implications
Depending on the nature of your separation, one partner may decide to make other living arrangements or you may choose to live together for the time being.
Whichever option suits, ensure you discuss the financial implications of the living arrangement.
If you have a mortgage or are renting, the house is likely under both names which means you each have a shared responsibility to ensure your payments continue no matter who is or isn’t living in the house.
2. Organise your bills, accounts, and paperwork
The next step is to make any changes or updates to your bills, accounts, and any other documents.
Start by gathering recent bills and important documents (such as your marriage certificate, payslips, and bank account statements).
If you have joint credit cards, work through closing these down and dividing the assets and debt. Consider changing passwords that have been shared.
Do I need to change my superannuation?
Superannuation balances can be split and a portion transferred to your partner depending on your personal circumstances.
What is important to note is that while your superannuation balances can be transferred, they have to stay within a super fund (i.e. you can’t take it out to buy a property). These superannuation policies apply to both married and de facto couples.
You may also like to consider changing your nominated beneficiary with your super fund (and insurance policies). When you pass away, your super is paid out to your partner, ex-partner, or nominated beneficiary.
If you do not nominate a beneficiary (such as your children), where your supannuation balance is released is at the discretion of your super fund’s trust so your super fund could possibly to go to your ex-partner.
Do a financial stocktake
Make a list of your assets and property including your home, cash, car, super, and investments.
You can either do this separately or with your partner. This will help you determine your individual net worth and how to divide assets fairly.
You can use ASIC’s Moneysmart’s Net Worth Calculator to help create your list.
Manage your financial changes and plan for the future.
It would be wise to think about how your new income – and potentially new expenses – will affect your lifestyle. This may require completing a new budget, applying for Centrelink support, or seeking advice from a financial planner to adjust your financial strategies.
If you have investments in place, you may like to consider adjusting them to account for your new income, changed expenses, and different living arrangements.
Making important decisions can be overwhelming at a time of significant change. When going through a separation, managing your finances is probably the last thing you feel like doing.
A financial adviser can support and guide you through the process. The CCFPG Financial Advice team has the knowledge and experience to help you make confident financial decisions.
At CCFPG, our financial guidance can help you navigate through your separation and ensure financial security and confidence.
CCFPG has 3 simple steps to help you financially plan for separation:
- Understand your current situation
- Know your goals
- Guide you through the next steps to reach financial success and certainty for your future
Separating from your partner is never easy but there are steps you can take to make the process simpler and protect your finances. A local-based financial planner on the Central Coast, such as CCFPG, can help you manage your finances for a happier, smoother separation.
Contact one of our experienced, friendly financial advisers today. We are here to support you and your family in this challenging time.
Contact us today. We have offices located in Central Coast – Erina (CCFPG), Newcastle – The Junction (NFPG), and Sydney CBD (SWA).
Disclaimer: The views expressed in this publication are solely those of the author; they are not reflective or indicative of RI Advice Group’s position and are not to be attributed to RI Advice Group. They cannot be reproduced in any form without the express written consent of the author. This information (including taxation) is general in nature and does not consider your individual circumstances or needs. Do not act until you seek professional advice. Newcastle Financial Planning Group, Central Coast Financial Planning Group, Sydney Wealth Advisers, Coastal Advice Port Macquarie and Coastal Advice Ballina Byron are subsidiaries of Coastal Advice Group which is a Corporate Authorised Representative of RI Advice Group Pty Ltd, ABN 23 001 774 125 AFSL 238429.
