Going through a divorce or relationship breakdown isn’t easy. It is a stressful event that may take a toll on your children, finances, living arrangements, and daily routine.

The cost of a separation can also be something that takes its toll and it can be difficult to prepare for due to the usually short timeframes and the urgency of action. Generally, the overall costs of your divorce will depend on how amicable you and your former partner are about reaching fair agreements. 

Whilst it can be a challenging time navigating the separation process, it’s important to seek expert advice in areas that are going to streamline the process for you. This should include legal support as well as a financial adviser.

They can also provide you with the relevant financial information you may be seeking during this time.

Read on to learn about financial planning amid a divorce or going through a separation.

Assessing Your Financial Situation with A Financial Adviser

It’s important to carefully assess your current financial position. It can help you know what steps to take next and what you should avoid.

A financial planner can tailor their strategies to your individual circumstances and provide you with the knowledge to make informed decisions surrounding your money.

It’s recommended you gather as much information as you can about all your assets and liabilities and note the names each is in.

Consider collecting the important documents and examine the following:

• Savings (individual and shared accounts)
• Art and collectables (and other assets that are worth considering)
• Bank statements and credit card statements
• Family trust
• Insurance policy
• Home loans and personal loan statements
• Investment statements (for example, managed funds, share dividends)
• Personal effects (boats, caravans, farm equipment, motor vehicles, etc.)
• Superannuation statements
• Marriage certificate
• Insurance policies (health, home and contents, car, income protection and life)
• Tax records (tax returns and tax file numbers)
• Car registration
• Loan statements
• Utility bills (electricity, gas, water, phones and internet)
• Property documents (lease, deeds, mortgage documents)

It is also beneficial to examine your joint income and expenses as this is crucial to help you plan for the future. The documents you may need are:

• Business and personal tax returns
• Payslips
• Bank, credit cards or store card statements
• Joint debt statements

Navigating Divorce and Separation Finances

Updating Your Accounts, Will and Super

Once you have gathered all the relevant financial documents, it’s crucial to begin separating your money.

In order to separate your money, you may consider doing the following:

• Opening separate bank accounts in your name (for your income and savings)
• Changing your PIN and online banking passwords
• Closing joint bank accounts
• Cancelling joint credit cards
• Update your super and ensure the payout goes to who you want.
• Update your will and powers of attorney.

If you possess joint accounts with your former partner, you should let relevant financial institutions know of your plan to seek divorce. As you do this, you can also start opening your own bank account for your finances after the relationship ends.

Reviewing Your Insurance

Because a divorce or separation is a major life event, this is a good time for you to review your insurance needs. These may include:

• General insurance (contents, home, motor vehicle, etc.)
• Health insurance
• Personal insurance (income protection insurance, life, total and permanent disability, etc.)

Insurances are vital in protecting yourself and your family if an unexpected event occurs. Reviewing your policies will help you determine your savings in premiums and better methods to let you keep up with payments while spending on other necessities. Additionally, it’s essential to make sure your beneficiaries are up to date on life cover policies so that the financial support goes to who you want it to. 

Creating New Cashflow Plans, Financial Plans and Investment Strategies

It is only natural to experience an income reduction as you go through a separation and understandably, it can take time to adjust to relying on only one income. Creating a budget and financial plan early on can make it easier to track expenses and feel confident that bills and payments will be covered.

It would be wise to think about your new level of income – and potentially new expenses – and how these will affect your lifestyle. 

If you have investments in place, you may like to consider adjusting them to account for your new income, changed expenses, and different living arrangements.

Making important decisions can be overwhelming at a time of significant change. When going through a separation, managing your finances is probably the last thing you feel like doing.

A financial adviser can support and guide you through the process. The Hyland Financial Planning team has the knowledge and experience to help you make confident financial decisions in times of challenge. 

Do you need help navigating your finances during a divorce or separation?

Seeking professional assistance through counselling, financial planning, legal advice, and the like will significantly help identify your options when navigating a financial separation. A divorce or separation is a tough time, so don’t hesitate to ask for help from reliable experts while navigating this challenging period in your life. 

If you need financial planning services in Sydney, turn to Hyland Financial Planning. We were founded on the desire to build a collaborative relationship where our financial advisers strive to improve our clients’ lives. 

We offer strategic planning, wealth creation, and ultimately—wealth success, leaving nothing to chance. Explore our services today.