By Gianna Huesch
A major part of divorce and separation is figuring out your newly individual financial situation going forward, and this can be especially tricky for people who may not have been as involved in financial decision-making or organising as their partner during their relationship.
Women in particular can be dramatically affected by a relationship breakdown and its impact on their financial situation, as found in research by the Australian Institute of Family Studies. The research found that divorce had a “substantial negative effect on the equivalised household incomes of women, with Australian women experiencing a fall in income of 21 per cent compared to their pre-divorce income”.
It’s therefore very important to make well-informed financial decisions when your relationship breaks down and you are separating your finances. To assist people struggling with the financial effects of a relationship breakdown, ASIC (Australian Securities & Investments Commission) has put together some helpful tools covering the financial aspects of divorce and separation. The tools will help you get your budget sorted out, avoid common financial mistakes and understand what practical steps you need to take when commencing your property settlement process, starting with providing a summary of assets and debts.
During this time of heightened emotions and stress, it may feel overwhelming to have to deal with money issues, but this is precisely the time you need to focus on financial matters, in order to resolve uncertainties and create the best possible future for yourself. Director of the AIFS, psychologist Anne Hollands, says, “When a relationship breaks down, we often don’t know how to start sorting out our finances. The new checklist from ASIC’s MoneySmart can help you work out what you need to do.”
The Divorce and Separation Financial Checklist covers the following topics: bank accounts and credit cards, your mortgage, your rented home, legal help, documents and information to collect, your income and expenses, care for your kids, dividing your assets, car loans and other debts, wills, insurance and super, domestic violence and financial abuse. The Checklist is available here: https://www.moneysmart.gov.au/life-events-and-you/life-events/divorce-and-separation/divorce-and-separation-financial-checklist
The Asset Stocktake Calculator will give you an overview of your current financial situation by helping you value your assets, and can be found here: https://www.moneysmart.gov.au/tools-and-resources/calculators-and-apps/asset-stocktake-calculator
Do you need advice regarding a property settlement or other family law matter? Please contact Cristina Huesch or one of our other solicitors here at Alliance Family Law on (02) 6223 2400 to discuss your needs. We can also refer you to our recommended financial advisors who can further assist you with specialised financial advice.