Separating? Take These 12 Steps To Protect Your Money
Separating from a partner is an emotional process regardless of who initiates the decision. It can be hard to think clearly about your financial situation at this stage but the steps you take now can influence the shape of where you end up, financially speaking. In The Joy of Money, Kate McCallum and Julia Newbould identify the 12 key things to consider before separating.
1. Protect your privacy. Change passwords for your computer, mobile phone, internet and phone banking, internet provider plan and social media.
2. Record key dates including the date of separation. This helps when you apply for a property settlement and/or divorce and proves that you have been separated for at least 12 months.
3. Clarify your financial position:
List all your assets and any debts or joint debts in your name.
Ask your bank statements for the past seven years (you may need these in the future) and make sure you are receiving email statements for current bank accounts and loans.
See your bank about ways to protect your money and ensure any current loans don’t increase.
4. Reset bank accounts, credit cards and loans so you can access funds and control loans:
Close joint accounts. Move your share to your own bank account or use the money to pay joint debts.
Ensure you have a bank account in your name where only you have access and ensure your earnings go into this account.
Reset your joint home loan. Inform your loan provider of your separation, reset the signing authority to “both to sign”. If your home loan has a redraw facility or linked credit card, cancel these options. Re-finance or repay the loan as soon as possible.
Cancel joint credit cards and repay any amounts owing.
Set up your own credit card, ideally before you separate.
5. Change your rental agreement if you’re moving out and your partner is staying.
Arrange with the landlord to be released from the rental agreement or you could be liable for rent or any damage caused by your partner after you leave. Get your portion of the bond returned or transferred.
6. If you own property in joint names, seek advice from a solicitor. If the property is held in your partner’s name, it’s particularly important you ensure it is not sold before the property settlement.
7. Update utility bills and other subscription services including electricity, gas, phone, internet, streaming services. If your name is on the account, you are liable for any unpaid accounts.
8. Gather official documents you regard as essential.
9. Contact Centrelink. Your change in relationship status may mean you qualify for government assistance.
10. Update your will and death benefit nominations. Separation doesn’t impact your will and so if you die, your spouse may inherit assets (or if they are your executor, have control of your estate) even though you may not want them to. Divorce does affect your will, but it’s different in each state and territory. Depending on where you live, it may make your will invalid or could simply revoke your former spouse as your executor or any gift left to them. Check your death benefit nominations for your super fund, and for any life insurance policies.
11. If you have applied for divorce, once this is final there is a time limit of 12 months to apply to the court for property settlement or spousal maintenance. If you don’t apply within this time you need leave of the court. It’s better if you don’t end up in this situation as there are circumstances where leave may not be granted.
12. Seek financial advice. A good adviser can help clarify your financial position and work with you and your lawyer to navigate your property settlement.
Edited extract from The Joy Of Money: The Australian Woman’s Guide To Financial Independence by Kate McCallum and Julia Newbould, published by Bauer Books.
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The information provided is general information and not personal advice. Tonic is not a financial advisor. You should consider seeking independent legal, financial, taxation or other advice to check how the information we publish relates to your unique circumstances. Tonic is not Iiable for any losses caused, whether by negligence or otherwise, arising from the use of, or reliance on, the information provided directly or indirectly, by this website.
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