When you’re going through a separation, there are a whole host of things to think about. Where you’ll live, who gets what, who’ll take care of the kids and when, the list can be endless. But some of the most important things to think about are the financial considerations upon separation.
Here are a few to add to your to-do list when you separate.
Close Joint Accounts
If you have any joint bank accounts, it’s a good idea to close them and open your own separate accounts.
Clearly dividing your bank accounts will make it a lot easier to separate your financial affairs as soon as possible.
Audit Your Assets & Liabilities
Carry out a full audit of your assets. This should include your bank account balances, physical assets like your house, car and furniture, plus your superannuation and any other investments you may have. List all of your liabilities like mortgages, personal loans and investment loans and debts owed to friends and family.
Knowing your exact financial position at the time of your separation is essential when it comes to dividing everything up at a later stage.
Advise Your Mortgage Lender
If you’re a home owner and have a mortgage in joint names, might be a good idea to advise your lender that you’ve separated. And to put a block on accessing equity funds that might be available under your mortgage.
As a joint mortgage holder, you’re both responsible for the payment of the mortgage, so if one person usually pays it, but stops the payments, the other person can be pursued for the money.
Your mortgage lender will be able to explain the different options available to you following your separation.
Update Your Rental Agreement
As a renter, if one of you moves out you should tell your landlord or rental agent that you’ve separated as well, in case your rental agreement needs to be updated.
Inform Your Debtors
If you have any regular household bills, make sure the suppliers such as electricity, gas and other utilities are aware of changed circumstances.
If you already know one person will remain in the house and the other will move out, you can get the bills changed into one name only.
Create A New Monthly Budget
Knowing you can survive financially on your single income is important. Make a spreadsheet of all your current living expenses and work out if there is any shortfall between your income and your expenditure.
If there is, have a look if there are any obvious expenses you can reduce or cut out altogether.
Check Your Insurances
Insurance is another area of your financial life that needs to be considered.
From health insurance and car insurance to life insurance and contents insurance, check whose name is on each policy and make sure it’s the relevant person and that necessary insurance cover remains in place.
Some couples put insurances in only one person’s name so it’s a good thing to check as soon as you’ve separated to make sure you are still covered and any claim you make after your separation will be valid.
If you’re going through a separation or divorce, it’s important to look into these financial considerations upon separation.
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