Arranging Finances after Separation

Once you and your partner have made that decision to separate there are a few first priorities you need to do. These often involve your money and finances. The finances are what takes the largest hit and causes the biggest threat and escalates conflict. If you can make an effort to discuss this issue logically to avoid the emotional amplification you are both better off. Arranging Finances after separation is necessary to ensure your survival.

Separation is hard. It is not about ending the marriage or relationship as much as dealing with the fallout and ramifications of the aftermath.

So much stress and pressure is upon each member of the family. If couples can communicate with each other, find common ground and work toward the same goal, this helps. If you are both in conflict, obtain Counselling.

I would hope most couples have exhausted every avenue to reconcile their relationship and family, discussed their relationship, and attempted to rectify the damage or hurt experienced. A relationship is hard to find, a family is irreplaceable. Do not separate lightly; it is a huge decision and one that changes your life forever.

If you are both of the mind that the marriage or relationship is over, make sure every avenue to taken to safeguard that the separation is as easy as possible on everyone, especially the children.
The steps to take relating to your finances after you decide to separate are:

1. Speak to your bank

If you have a joint account, you may need to talk to your bank or building society. If you share any other accounts with your ex-partner, you should contact the financial institution where you hold the accounts and advice of the separation. Credit cards, outstanding loans or direct debits might need to be divided and cleared where possible.

Often we have a credit card account with two cards attached to it. The main cardholder will be held responsible. It is usually a good idea to place a stop on the secondary cardholder and advise them of this. If they suddenly go to use their card and it is declined this can lead to hostility, so please advise them before you cancelling their card so they have the opportunity to obtain their own card.

Be aware that a bank or financial institution might freeze an account when notified of a divorce or separation. This would have the effect of stopping direct debits being paid, which can cause problems with payees.

It’s best to agree with your spouse on who will pay which household and other bills. Alternatively, you can decide that the spouse who has left the property will pay a fixed monthly amount to the one remaining in the property who must then transfer all the direct debits into their sole name, e.g. electricity, phone, gas….

If you are concerned about your partner taking money out of the joint account just open a new account, transfer half the money from the joint into your account and change the direct transfers from the old account to the new account. This way you can ensure you remain in control and the bills will be paid.

It takes weeks or even months for things to sort out once a separation occur. Please be patient, you or your partner may still be coping with stress, shock and loss.

2. Mortgage Provider

Sorting out your mortgage arrangements is an essential step.
For most people, their largest asset (and expense) is their home. If you decide to leave the family home, it may make sense to review your mortgage arrangements.

You might not wish to contribute to the mortgage if you are no longer living in the property but it would be in your interest to assist or ensure the mortgage is fully paid. This is to avoid getting a bad credit rating, which you can get for any mortgage default, and to prevent the mortgage foreclosing and the mortgage provider selling the property.

When one partner moves out the usual thing to occur is the partner remaining in the home pays the mortgage. This works as long as the remaining person can afford the payment. As mentioned, paying part toward the mortgage until the property may be sold can help retain your credit rating. Best advice is to let the bank know what has occurred and where possible, utilise your mortgage insurance and place a hold on all repayments until such time you can both decide what you are going to do with the property.

This is often one of the hardest decisions to make. If children are involved we want them to remain in their home, especially while trying to deal with their new family set up of mum and dad living apart. The more stability we can provide our child, the better the child can manage and adapt.

3. Centrelink Benefits

Contact Centrelink to see if you may be eligible to receive any benefit support. Many people who have separated have never been into a Centrelink office. Luckily much can be done online. I suggest to go online or phone to speak to them at Centrelink 

Many people are amazed at the assistance they are eligible to receive once living as a sole parent. Financial support is a necessity. Even if you have a full-time job, the money will be sparse if you are used to living on a double income. Taking some time to sit down, look at income vs. expenditure can help you understand your position faster. Once you understand this, you can take the steps necessary to enable you to remain in the home.

If the partner has vacated the family home and the mother has not had time to plan or arrange anything, then the partner who has vacated cuts off financial support, child support is the next place to call. They can contact the other parent and arrange for payments to commence immediately.

4. Can I afford to keep my home?

If the other partner leaves and you have a mortgage or are renting, both people have a financial responsibility.

If you remain in the home, you are responsible for paying the mortgage as you have taken residence of the property. This is similar to renting the entire property including your partner’s share. Your partner has no access to the home except to arrange a convenient time with you to collect their belongings.

They remain jointly responsible for rates, insurance and maintenance until the property is sold or you vacate. If they are paying rent elsewhere, the person remaining in the property is expected to pay the rent or mortgage. Defaulting on payments can result in a bad credit rating or bad rental history so everything needs to be done to avoid this. As previously mentioned, speak to your lender and perhaps gain mortgage insurance until you are in a better position to pay the mortgage or sell the property. If renting the person who has left the property is best to have their name removed from the lease. Speak to the real estate property manager and advice them of what has occurred. The more informed they are, the better they are positioned to help and advise you.

Child Support needs to be paid if children are involved. It is the children that suffer most in any family breakdown and if they also loose their home, the consequence upon them can be devastating. I implore all parents who decide to separate to consider the best interest of their children.

5. Parenting Plans and Property Settlement

We now have limits of what can appear in Family Court. Gone are the days everyone lined up for a magistrate to decide who gets what and where the children will live and when they see the other parent. It is expected that the adults, or parents, can make these decisions. There are a number of registered Mediators through the Attorney General’s Department that couples can contact to assist arranging a Parenting Plan and to help do property settlements. Mediators are not necessarily lawyers yet they follow the Family Law Act. You can find a registered Mediator by postcode on the Attorney General’s website.

There are a few organisations that do mediation but be prepared to wait, attend multiple sessions plus a parenting class before any mediation will occur. The private Mediators can undertake your mediation much faster with one session and get it all done with you. You pay for the service but the time and emotional trauma you avoid is often worth it. Relationship Centre’s do Mediation, after all, the appointments and classes you need to attend and depending on income you need to pay for the Mediation, and then pay for the Parenting Plan. Make some calls and ask relevant questions before deciding. I also suggest the Mediator speak to the other parent when arranging an appointment time if you are in conflict, to avoid any arguments between you and your ex-partner.

When selecting a Mediator ask questions such as

• How long before I can get an appointment?
• What is the process, can one session resolve most issues?
• Do I need to attend a private session or parenting class first?
• Can you do Parenting and Property in one session?
• What is the cost for each person?
• What happens if Mediation fails?

You also need to be aware that if both parents have access to Legal Aid, only one can receive it. The first parent to call gets it. Legal Aid does not cover property matters.

If you try to arrange a Mediation and the other person refuses to attend you can obtain a 60I certificate. The family Court does not appreciate receiving these if it states one party refused to attend. They may even order the refusing party to pay all court and solicitor costs. Mediation removes lawyers and courts; this is far easier, less conflictual, much cheaper and considerably faster.

The only time Family Court should be used is if one party feels intimidated, bullied or threatened by the other or if there is a history of violence or abuse. The court is then the safest option.

Remember however that the court will rule what it deems as best for the children and neither party may get what is convenient or advantageous to them. This is why mediation usually works best for the parents; they get a say in what they want.

Most important thing to remember however is the children have the right for a relationship with both parents. The children are not the property of one parent, usually the mother. The Family Law Act states both parents have an equal responsibility to raise their children. Gone are the weekend dad days. It is suggested if children live with the mother; they spend time with their father Friday night to Monday morning then perhaps one weeknight each week or fortnight. It is important to the children, and dad too usually, to pick the children up from school, attend their sport of activities, help them with homework and school projects. A weekend dad may not be afforded this opportunity so spending one night a week or fortnight can help alleviate this and the children can share their weekday events with both their parents. This is what children want and need. So often we hear of parents arguing over seeing their children. So often mum will permit dad only one or two days a fortnight. This is inappropriate for both child and parent. No one owns the child; they belong to both parents equally, regardless if mum was the main care giver due to dad working outside the home to support the family financially. This financial support should never be used against a dad wanting to spend time with his children.

6. Legal aspects

Once you separate you may wish to change your will. Under Australian Law, the spouse receives the estate after death. Many people forget to change their will after separation. You may also consider changing your superannuation nominated person as well. You can change it to the children or family member in trust for your children.

Even insurances may need to be changed if the insurance for the home or contents are held in the name of only one spouse. If your home burns down or is severely damaged, they make the claim and collect the money. You must change this also.

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