The NEW plan!
One of the hardest parts of separating is that it wasn’t the original plan. It wasn’t even the backup plan. In fact, you might find yourself looking quite unexpectedly at a future that is significantly different to the one you had in mind.
Separations happen in many different ways. Some are civil and amicable, others are brutal and tragic. It’s difficult to control or even predict the emotional fall-out, but you can control aspects of your finances. While everyone’s circumstances are different, here are some of the key steps that you can take which may allow you to bounce back just that little bit easier.
"It wasn't even the backup plan!"
1. Gather Financial Information
It’s imperative that you gain as much understanding of your current financial circumstances as possible. This includes your assets and liabilities, but even more importantly, your cash flow. Understanding both your income and expenditure will be an essential fundamental of moving forward and creating your own life. Once you understand what it will cost you to live, consider any changes you have to make. Do you have to rent a new place? Who will pay the mortgage? What about any school fees or child care costs? Will your hours of work have to change or will you have to return to the workforce? There are so many things to think about – but knowing what it’s going to cost you to live will help to get some order to those decisions and prioritise what you need to do.
2. Separate your banking?
Depending on the nature of your separation, you may want to open up a separate bank account so you have control and autonomy over what you do with your funds. At the very least, you want to notify all banks and financial institutions that you have separated so that your accounts are changed to “both to sign” rather than “any to sign”. Do this for your loans as well as your partner could possibly draw further on your joint loans. If possible, log in and download statements, and keep an eye on future transactions. If your partner has a supplementary credit card, discuss this with them. You could impose a limit on the card or cancel it if you’re concerned they will use it excessively.
3. Check your Insurance
Often forgotten, check your insurance policies and ensure that the authority on the insurance is set correctly. Often with life insurance you’re asked for a beneficiary and it’s likely this will be your partner. Consider if you want to change this.
4. Update Wills and other legal documents
It’s that old dusty document in the bottom of a drawer somewhere. However, it’s highly likely that should something happen to you, everything will go to your partner. Have a read through and see if you’re still comfortable with the outcomes – chances are you won’t be. You might also want to mention this to close loved ones in the off chance that they left you and your partner something in their will. If you have set up a binding or non-binding nomination for your superannuation, you may want to look at that too. If your partner has a power of attorney over you, revoke it.
5.Check your business structures
If you run your own business or have alternative legal structures (such as family trusts), it’s quite common that your partner may be a joint director or shareholder. While you may always consider a business to be yours, if your partner is a director and/ or shareholder, in the eyes of the law they may have just as much legal and operational control as you do. If possible, revoke them as a director as soon as possible. Seek legal and tax advice should you wish to move shareholdings.
6. Ensure you are digitally secure
Many people share passwords with their spouses and some people have a real memory for it. If you have a password that you use across a number of sites or something that would be easy for your partner to determine, change it immediately. Have you logged onto a common computer that is now in their possession? Securing your digital footprint will ensure that only you have access to the information and your online persona.
Disclaimer: The content of this blog is general information only and is not provided as a substitute for legal/professional advice. If you have a legal/financial/ any other issue, you should contact a lawyer and/or professional before making a decision about your options or personal situation. TheSeparationExchange.com cannot provide legal/professional advice.
ABOUT the Blogger:
Brenton Tong is the managing director of Financial Spectrum.
Brenton holds a Bachelor of Commerce with a major in Accounting and Law, as well as an Advanced Diploma of Financial Planning. He is completing his Masters of Business Administration and is enrolled in the Fellow Chartered Financial Practitioner programme (FChFP). Brenton is a Senior Associate Member of FINSIA, a Practitioner Member of the Association of Financial Advisers and a member of the Association of Independent Financial Professionals. In addition, Brenton is an accredited trainer for financial planners and writes part of the Continuing Professional Development syllabus for Kaplan.
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