What Are The Financial Consequences of Divorce? Separation Checklist

The marriage is coming to an end, and it’s time for divorce. Sometimes it can’t be helped when two people that loved each other can’t find the same passion anymore. If this is the case, it’s better to rip the bandaid off before the wound starts to fester.  

You might be starting to think; “how can I afford to live in my own home after divorce?” or “what does divorce look like financially?” amongst other things. 

If you are having divorce anxiety, particularly with your finances, you can alleviate your stress by reading here. In this article, we will dive into what are the financial consequences of a divorce in Australia, as well as a checklist for financial separation. 

Keep reading here to alleviate your stress and gain financial confidence with a separation checklist for Australia. 

 

What Is A Property Settlement?

First thing first, if we are talking about your finances in a divorce, we should talk about the legal process to spliting your property. A property settlement is the process of acquiring a legally binding arrangement between split couples/parties that is designed to help divide assets, liabilities and equity. For more information on property settlements, click here. The sorts of assets and liabilities can include: 

Assets 

  • Superannuation 
  • Trusts
  • Jewellery 
  • Collectables 
  • Cars
  • Houses 
  • Business interests 
  • Realestate   
  • Animals 
  • Inheritance assets 
  • Money

Liabilities 

  • Debts 
  • Loans 
  • Tax
  • Stamp duty 

There are even more things that you will be required to settle on if you and your partner split. If you want to come out of the settlement with the best chance of keeping all of your assets, all you need to do is get started with a legal professional. 

 

The First Few Things You Should Do When You Seperate 

When you first separate, things might seem overwhelming. I know it’s easier said than done, but try to remain calm and only worry about the next step when you sort your money out. The old cliche “how do you eat an elephant? One bite at a time” could not be more true when separating. Elite athletes often focus on the process, rather than the end result, because if you focus on the process, the end result will eventually come. If you want help with your separation process, contact a lawyer. 

That being said, here are the first few steps you should take when you first separate to secure some of your finances: 

  • Go to your bank and open a bank account in your own name.
  • Let your employer know about your new banking details, and have your income go to the new bank account.
  • Think about closing old bank accounts with your ex-partner, and do it if you think it is necessary. 
  • Reset your passwords and PIN numbers to any of your banking if you think it is necessary. 
  • If you have a joint loan: 
    • Let the loan lender know about your separation. 
    • Arrange a new payment plan for any of your joint debts. 
    • Request that joint signatures be required for any withdrawal options. 
  • Update the names on all documents such as; insurance, super, wills. Engage a lawyer if you need to. 
  • Make sure you document everything that happens in the separation in a journal: 
    • Date of your separation.
    • Asset valuation documents.
    • Liability valuation documents. 
    • Incomes, tax returns and payslips. 
    • All of your expenses. 
    • Insurances. 
    • Super. 
    • Bank accounts. 
    • See a lawyer and note their fees. 

 

Once You Have A Bit More Stability, Think About Your Future Steps 

Once you have done or at least thought about the things listed above, we need to start thinking about “how can I afford to live on my own after divorce” and your future separation finance. The next things you should be doing are: 

  • Calculate your budget, evaluating your expenses and income. This can be difficult if you’ve never had to do it before, and you can get help here. 
  • If you can afford to move out of the same house as your ex spouse, move elsewhere. This will not only be more comfortable for you, it will also help with the separation process. 
  • Reflect what matters most to you, and go and set out for your own goals, funnelling money into those goals if you need to. 
  • If you have kids, make sure their priorities are met, before you start worrying about your own.

 

What Happens If We Have To Go To Court? 

If you need to go to court, you will definitely want to be helped by a lawyer. If you do find yourself in court, the topic of discussion will be; in divorce in Australia, who gets what? In the eyes of the court, they are focussed on: 

  •  What the couple owes and owns. 
  • What is the percentage of contribution from each individual of the relationship? Both financial contribution and level of effort. 
  • The current circumstances of each individual and future likely circumstances, such as income and health. 
  • What is “just and equitable” for each person. 

 

How To Stay Calm And Minimise Stress In Court 

As a whole, couples who do the following tend to have a more pleasant court experience when separating: 

  • Accept the situation they are in. 
  • Recognise that they have more than one choice, and spend the time to make informed decisions. 
  • Have an understanding that good advice needs the whole picture of their situation to be given. 
  • Have a broad and healthy support network they can use for second opinions. 
  • Manage what is realistic within what they; can do, need help with, what can be done now, and what needs more time. 
  • Stay healthy. 
  • Stay focussed on the task at hand. 
  • Are civil and respectful. 
  • Hire a lawyer. 

 

What Will Happen If Things Don’t Go Well For You

If things take a turn for the worst, it can be very problematic. What it comes down to is wasting a lot of the following: 

  • Your time
  • Your money
  • Your best life/your kids best lives 

 

How Do You Give Yourself The Best Chance For Financial Success? 

Don’t let Google search stand in as your lawyer. There is a wealth of information out there and it’s a good place to start, but don’t let that “how to get a divorce in Australia” article be your decision maker. Let legal professionals sort your divorce and help you with your finances.

So how do you find a lawyer you can trust and rely on? With so many law firms in Perth, it can be hard to find one who will understand and listen to your situation. 

Savannah Legal offers a free 1 hour consultation and we take the time to understand your situation, concerns and needs, before providing you with a legal plan outlining your options. Our goal is to give you affordable legal advice while lifting a burden off your shoulders. Book your free consultation today.

If you are wanting a financial separation calculator, or a single parenting payment calculator, you’re probably not going to find one. But with Savannah Legal, you will find qualified lawyers that can help you work it out!

Disclaimer: The content on our website is intended to give general information about the law and does not constitute legal advice. If you have a specific legal problem, you should consult a professional legal advisor. To the extent permitted by law, Savannah Legal is not responsible for and do not accept any liability for any loss, injury or damage, financial or otherwise, suffered by any person relying or acting on information contained in or omitted from the content on our website.

x
ENQUIRE

Book a free 1 hour consultation

Fill in the form and submit to book your free one hour consultation.
We will get back to you on the same business day or within 24 hours, Monday to Friday.

Not ready to book a consultation yet? Try one of the options below.