How to sort your finances after divorce or separation

Divorce and separation checklist: step 1

With support from family and friends, access to the right experts and careful planning, it’s possible to get your money matters back on track, helping build yourself (and your family) a bright, new financial future. 

Take some time to review your finances to assess your net worth. In doing so, look at any debts you may be responsible for and list all your assets. Start collating key financial documentation, including:

• Utility bills 

• Credit and store cards statements

• Any investments documentation e.g. share dividend notices

• Property deeds, mortgage papers, home loan details

• Savings and transaction account statements, including any PINs and passwords

• Tax records

• Any  insurance policies such as Life, Health, Income Protection and General Insurances such as Home & Contents, or car insurance

• Superannuation accounts

• Will and estate plans

• Business documents

Consider using the list above as a starting point to determine what bills and expenses you may need to pay, alongside what savings you currently have and the income you expect to receive in future. Knowing the amount and frequency of phone bills and credit cards, details of duration of any loan terms which you may still be accountable for, or other costs like utilities, council or strata costs can help you work out if you have the savings and/or income to meet your expenses when they fall due or if you need to make some changes. It’s also important to take a look at additional income and expenses when setting a budget to get your finances in order. 

Divorce and separation checklist: step 2

Most people find that consulting a legal professional to assist with the equitable division of their and their ex-partner’s assets, can be beneficial. Solicitors can advise on how assets and debts you and your ex-partner both own can be divided, such as property that is held in both names, or can prevent the sale of any property prior to any settlement that is held only in your ex-partner’s name. They can also provide advice on formalising a property settlement, and assist you in reviewing and changing your will to take into account your new circumstances.

At this point, it might also be worth meeting with a financial adviser. Your financial adviser can explain the pros and cons of your settlement, leaving you well-placed to make an informed decision during what can be a period of emotional and physical stress. If you and your former spouse can’t agree on a settlement, then you can apply to speak with a mediator, who will assist in discussing and resolving the issues in your divorce or separation.

Divorce and separation checklist: step 3

Before the property settlement is finalised, you should be cautious in putting your hand up for the family home, as it could also mean taking on the home loan – a debt which might prove to be challenging on your own.

The key is to speak with lenders to explain your situation and aim to renegotiate a more manageable payment plan, if it looks like you might struggle with repayments (even temporarily). 

Divorce and separation checklist: step 4

After a relationship ends, it’s important to get your super sorted. In many cases, when going through a formal separation or divorce, both parties’ super savings may be considered as part of the formal property settlement. This means your partner might have right to claim some of your super (or, you may have right to claim some of theirs). Your legal adviser can assist with this as part of your broader property settlement.

Once the settlement has been finalised however, you should ensure any super accounts that you hold have beneficiary nominations that match your new circumstances (in case anything happens to you in future). 

Divorce and separation checklist: step 5

You may also need to think about reviewing your insurance, including car, home and contents, income protection and life insurance, especially if you have children.

Just like your super accounts, you should double check the beneficiary of your insurance policies. If your ex-partner is nominated, you might want to revise your nomination. This may also be a good time to review all of your insurance cover levels to make sure you have the right amount of cover, either inside or outside or your super.

If you are newly-separated, you can take a few important steps to rebuild your finances:

• Budget for your new life and lifestyle
• Take stock of where you are financially
• Don’t make any major financial decisions until your property settlement is finalised and you have a regular source of income lined up
• Check your life insurance (including your nominated beneficiaries) and other personal cover to be sure your children are suitably protected, financially
• Speak with a financial adviser to develop a road map for the future. 

Next: Losing a loved one