While the topic of divorce is much less of a taboo today than it has been in the past, talking about divorce and your finances is much less common.
Our trusted family lawyers have put together a short guide to divorce and your finances – what you need to know when you decide to divorce.
Divorce & Your Finances – What You Need To Know
Divorce Can Be Expensive
It’s no secret that getting divorced can be an expensive process. So when you decide to divorce, it’s important to not just think with your heart but your head as well.
Have you got not only the energy for a lengthy legal battle, but the funds as well?
Divorce lawyers can be costly, especially if your case drags out for months – some can run for years, and the cost of that could be much more than you ever anticipated.
Divorce Mediation Can Be A Better Option
If you’d rather save your money for setting up your new life post-divorce, consider divorce mediation.
Mediation is usually a more affordable option when it comes to getting divorced. It can be more effective as well, as both parties come to mutually agreeable outcomes. This makes it more likely that any agreed terms will be adhered to by all involved.
You can formalise any agreement that you reach in relation to your financial settlement in consent orders. Read our FAQ where we explain more about consent orders.
Do A Financial Stocktake
When you decide to separate, it’s a good idea to do a personal financial stocktake.
The easiest way to do this is to create a spreadsheet that lists all your assets and their values, all your income and all your expenses. Include all joint and separate assets, income and expenses.
Work out what debts you have, jointly and separately, and what regular income you have.
Now think about how this might change going forward.
Decide How To Move Forward
When you decide to divorce, there are some crucial things you need to think about when working out how to move forward.
This includes things like who will stay in the house and who will pay for which expenses.
Other considerations are how and when you will go about separating any joint finances like bank accounts and mortgages, and importantly, where your children will live and spend time.
Create A New Budget
Once you’ve done an audit of your finances as of your separation date, and discussed how you will split any joint financial affairs, you’ll need to create a new budget.
Make another spreadsheet of your personal income and what essential expenses you need to cover from now on. Once you’ve done this, you’ll know exactly how much money you’ll have left at the end of each month, or how much child or spousal maintenance you may require in order to meet your expenses.
Child Care Arrangements Can Affect Your Finances
Depending on which parent your children spend the most time with, there may be child support payable from one parent to the other.
It will vary from family to family. Some parents are unable to care for their children full time due to work commitments. If one parent moves further away, it may be impractical for them to take on the majority of the child care and living arrangements.
This will have a bearing on whether a parent needs to pay more or less to the other parent. Generally, the principle applies that the less time a child is in your care, the more you may need to pay to the parent who they are mainly living with.
Update Your Will & Policy Beneficiaries
Something that many divorcing couples fail to do following their separation, is update their wills.
If you no longer wish your ex to be a beneficiary in your will, or from life policies and superannuation funds, it’s important to update these preferences in all the relevant policy documentation.
This is a straightforward process for most policies and super funds; usually you simply complete a new nomination form and return it to the assurer.
For wills and any health directives, it’s best to update these with your estate planner. There will most likely be a fee for this service, so make sure to include that in your budget planning when you separate.
When it comes to getting a divorce and your finances, Hickman Family Lawyers can help. Our team of family lawyers in Perth will assist you with getting through your divorce as quickly, affordably, and as stress-free as possible.
We offer a free and completely confidential 15–minute phone consultation – book yours online here.