Staying financially protected during a split
Untangling your money can be one of the trickiest aspects of separation and divorce. Joint accounts, mortgages and investment properties as well as any Wills and estate planning you may have had in place, all has to change.
When a couple first splits, there are a number of financial matters that you will need to take into consideration immediately.
- Cancelling any joint credit cards
- Keep documentation of any joint assets in a safe place – rather than in the home
- Terminate any power of attorney
- Change the password on your bank accounts
- Take money out of any joint bank accounts and set up your own (being fair not to take all of the funds)
- Review your Will
- Speak to the bank to ensure any joint accounts will need two signatures for any withdrawals
- Organise with the bank to receive all correspondence for all your accounts (including credit card and bank account statements, mortgage statements and superannuation member statements)
- Review any superannuation beneficiary statements
- Review your insurance cover
Although communicating with your former spouse or partner can be difficult, it’s important to be able to do so. That way you can work together to agree on the best way to divide your assets and financial liabilities.
You will both be required to disclose all your financial information and provide documents. Think about obtaining bank and credit card statements, details of your mortgage or rental agreement, utility bills, car registration documents and tax returns. Doing this sooner rather than later can help you both agree to a property/financial settlement and be able to move on with your lives much more quickly.
It’s also a good idea to draw up a new household budget for yourself. Consider how you’re going to fund your life on just one income and make any necessary adjustments.
Open a new bank account in your name only and if you have been using a credit card with your partner as the primary cardholder, apply for a credit card in your own name.
Some couples choose to keep their finances as joint until certain debts are paid off, for example if you decide to sell your former marital home.
It’s vital to have a Will and it’s also important to be aware of the effect any relationships have on a Will, particularly the difference between a marriage and a de facto relationship.
Generally speaking, marriage revokes an existing Will, unless the Will is made in contemplation of marriage. However, starting a de facto relationship has no such impact on a Will.
Divorce revokes any gift to a former marital spouse under a Will, but the breakdown of a de facto relationship does not.
If your Will lists guardians for your children, you may want to think about making changes to those arrangements.
If you are entering into a marriage or ending one, it is important to get professional legal advice specific to your unique situation.
The team at Michael Lynch Family Lawyers do not specialise in Wills and and Estate Law and we do not write Wills, but we can direct you to lawyers who can help.
However we do have extensive experience in helping people understand when Wills are impacted by relationships and work through what needs to be done in each unique situation to ensure your interests are protected.
To make an appointment with one of our experience family law solicitors, please call: (07) 3221 4300 or email: [email protected]