The lead up to a decision to separate or divorce is normally an emotional and traumatic time. We are often in a painful haze post separation and don’t know where to start. Life and the decisions to be made can seem overwhelming and confusing. All this while we are trying to support our children and ensure that they feel secure and loved, with our own emotional needs not even making it onto the “to do” list!!
The following list will help you to prioritise where to start with financial matters. And, as you work through each of these items and tick them off your list, I hope you will feel proud of what you have accomplished and confident that you can do all that is required, with minimal stress and drama.
First 5 practical things to do when you separate
1. Make changes to your Bank Accounts and credit cards
Open a bank account and apply for a credit card in your name only. Set both of these up so that only you have access to these accounts.
Determine and consider the following:
- Auto pays that are in place on any joint accounts or joint credit cards;
- Cancelling or moving auto pays to individual accounts or individual credit cards;
- Closing any joint accounts and credit cards;
- Having your pay paid into your personal account.
2. Cancel your redraw facility on your home loan
If you have a home loan, or any other joint loan with your ex-partner, visit your bank to find out if there is a redraw facility on any of these loans.
Discuss with your bank whether you can amend this facility so that funds can only be withdrawn with the written consent of both parties to the loan. If your bank will facilitate this, then implement the requirement that funds can only be withdrawn after written authority from both parties to the loan has been received and assessed by the bank, and if not, then cancel the redraw facility.
3. Make note of your separation date
Agree your date of separation with your ex-partner and record your date of separation.
You will need this separation date to:
- advise organisations such as Centrelink, Medicare and the Child Support Agency,
- sort out your financial affairs,
- apply for a divorce.
Separation occurs when at least one person in the relationship makes the decision to separate, acts on that decision and tells the other person. Your partner does not have to agree. You can be separated and living in the same house, provided you have stopped living together as a couple.
4. Your family home after separation or divorce
Consider and discuss with your ex-partner if either of you intend to remain in, what was, your family home.
If you own your home, consider if one of you will buy the other out and remain in the home, or whether the home will be sold. If the home is to be sold it is in both of your best interests to work together to get the home ready for sale in order to get the best price possible.
You can choose to put a property on the market, even if you haven’t finalised your property settlement, as settlement proceeds can remain in your conveyancer’s trust account, until you and your ex-partner finalise your property settlement and provide joint written instructions on how proceeds are to be distributed.
If you were living in a rented property and you have moved out, ensure you update your property lease, as if your name is on the lease then you are liable for unpaid rent or damage caused by your partner.
At this stage, you may consider buying your own home as a single parent. This is a great option for single mums if finances allow, but these decisions take time. Don’t rush into anything.
5. Documentation for separation and divorce
Start gathering the following documentation, in hard or soft copy. You will need most of this as you progress through your separation or divorce. Being able to get your hands on it quickly and easily, will save you time and stress.
- Bank Statements
- Loan Statements
- Credit Card Statements
- Superannuation Statements
- Tax Returns
- Health Insurance
- Utility invoices
- Motor vehicle registrations
- Wills and Powers of Attorney
As you move through the steps outlined above you will have gathered the information that will enable you to list all of your assets (what you and your partner own) and all of your liabilities (what you and your partner owe) and document a summary of your current financial position.
Knowing what to do when you first become a single mum can be overwhelming. From here you can move towards negotiating a property split, either on your own or with the support of your chosen professional.