Certainty in a split decision
A breakup from a partner isn’t easy, but protect your financial security
A COUPLE of weeks ago we wrote a column on how to protect yourself financially if you move in with your partner. As a result we were swamped by queries from people asking about the opposite … what to do if the relationship dissolves and your partner moves out.
Breaking up is hard to do, and even worse when you live under the same roof. Just how simple the split is will depend on whether it is amicable or not and whether it’s within the first two years of the relationship.
The best-case scenario is you’ve simply fallen out of love and you both realise you’re not suited to each other. It’s even easier if you haven’t mixed your finances with things like joint bank accounts, investments or debt.
Then it becomes a matter of simply deciding who can afford to go or stay, and how to share or buy out the physical possessions you’ve acquired.
That’s the dream scenario. The nightmare is when you’ve lived together for longer than two years, the split is hostile and you’ve blended your financial lives together. Joint bank accounts, credit cards, loans, investments … and/or a child.
If that’s the case, then expect a whole lot of frustration and pain. The reality is that in the eyes of the law the rules applied are similar to those of a married couple. It’s pretty much like a divorce, even though you haven’t officially tied the knot.
In these cases it’s fundamentally about protecting your interests first … and protection against a hostile partner. The key is to ensure your physical, emotional and financial security. So before getting angry or emotional about the situation, there are seven things to do before reaching for the tissues. 1Take money out of your bank account to get you through the first few weeks, but try to be fair. For example, if there is $10,000 in a bank account, only take 2Makeout $5000. an appointment to see the bank manager, accountant or financial adviser to ensure you’re fully briefed on all financial issues – everything from investments, superannuation and bank accounts you 3Get didn’t know about.
on top of your banking. Change passwords on your personal online bank accounts (if your partner knows them) and close joint accounts. The last thing you want is for your partner to bleed joint accounts dry and leave you with nothing.
Close joint credit cards for two reasons: to make sure your partner doesn’t keep racking up purchases that you are jointly responsible for; and they don’t skip out on paying their share of the debt and leave you holding the lot. It’s called Sexually Transmitted Debt.
Use money in the joint bank accounts to pay off the joint credit card bills.
Then organise with the bank to receive all correspondence relating to all your accounts. This includes credit card bills, cheque and savings account statements, mortgage updates, and superannuation statements.4Collect
as many important financial documents as possible and make copies of the lot. We’re talking about things like the deeds to the family home and any investment properties, share certificates, and super fund details.
It’s advisable to take it away from your family home to your parent’s place or a close friend.
5Secure
items that are emotionally important to you, such as photos, family videos, kids’ mementos and other “treasures” important to you. You may need to trade them off any settlement, but at least you will be bargaining from 6Keepa position of strength.
the lines of communication open. If you do this, you will increase the chance of an amicable separation. You don’t want to pass a message on to your partner through your solicitor, who speaks to his solicitor, who relays the message to your partner. That drastically increases the chance of miscommunication, which can lead 7Don’tto litigation.
agree to anything without taking time to get advice and think about it. You never know, they may have been preparing for the split and already been to a lawyer, who has advised them to take advantage of your shock and unpreparedness.