9 financial things women in relationships should know

In this extract from Women & Money: Mastering the Struggle, Janet Xuccoa walks through how to take control of your life when it’s been split in two.

Akey to planning and being ready to cope with unpredictable life events is possessing knowledge. Accordingly, as individuals in a relationship and in the nature of joint participation, I think every woman and man should, as a bare minimum, know the following:

● The market value of your home and any other real estate you own.

● Whether you owe any debt in respect of your home and other assets such as investment properties and if this is the case, who are your lenders, plus the amounts and terms of the loans.

● If either of you has income protection, trauma and/or life insurance and if so, details of the policies. For instance, where the policy document is kept, the name of the insurer, how much will be paid out under the policy and who are the named beneficiaries.

● If either of you has income protection, trauma and/or life insurance and if so, details of the policies. For instance, where the policy document is kept, the name of the insurer, how much will be paid out under the policy and who are the named beneficiaries.

● Where your bank accounts are held, their respective account numbers, the types of accounts held jointly and individually, plus the month-end balances held in each joint bank account.

● If there are other assets such as money held on term deposits or in bonds, or if you have funds invested in shares and/or managed funds. In relation to these assets, you need to know what the asset is, who owns the asset, what the value of the asset is and where the asset is held, including contact details of who manages the asset.

● If you and your partner have superannuation policies, who that provider is and the amount of money in your superannuation plans.

● Whether you have up-to-date Wills, where your Wills are kept and the main provisions of your Wills.

● If either of you have Powers of Attorney, where your documents are kept, who the Attorney is and under what circumstances the Attorney can work.

● Who your professional advisers are such as your Lawyer, Accountant, Financial Adviser, Sharebroker, etc. and their respective contact details.

Surviving divorce

Separation and divorce usually bring about some pretty big life changes on a personal and practical front. If you’re confronting separation and divorce, you’ll need to be courageous and proactive even when you don’t much feel like it if you’re going to move forward and build a new life for yourself and your children.

Financially take charge of yourself

Financial situations differ from person to person. Despite this, common among almost all women is the fact that, upon separation and divorce, they become solely responsible for their own financial well-being. Budgeting, planning, saving and investing now become the sole domain of the new single.

In the first instances, check there are no longer any joint bank accounts or credit cards in existence. You have probably already taken this step, but I would be remiss not to mention it. It’s unlikely you’ll want to and, in many situations, it would be unwise, to continue a financial involvement with your ex-partner at any level. Hence, all joint banking and credit facilities should be closed. Confirm that this

has occurred. Once you’re sure you have a clean slate you can start to build your financial future.

To succeed financially, you’ll need to plan and budget. Start with knowing the amount of income you’ll now be receiving. Understand what expenses have to be paid out of that income. Possibly, you’ll need to increase your income or adjust (decrease) your expenses.

If you think you’d benefit from professional assistance, seek the help of a budget adviser or accountant. If you’re in a financial position to do so, put some money in a savings account. This is your emergency money. It shouldn’t be touched for day-to-day wants. Having an emergency go-to account relieves you of stress. If you don’t immediately have the ability to put funds aside for emergencies, create a line in your budget and start building up your savings, week by week. Over the course of a few months, you’ll be further ahead than when you started.

Start to think about what you need to do to create investments and provide for your retirement. Perhaps you’ll have funds from your financial settlement to make investments immediately.

Alternatively, maybe you need to plan how you’re going to financially afford your new life. In both these instances, I recommend seeking help from accountants and/or financial advisers. Obtain their advice before taking any steps to invest.

Protect your assets going forward

For your own financial security and that of your children, it’s crucial you protect the assets you now have from potential relationship creditors. It may be you’re not in a relationship at this point of your life but that doesn’t mean you’ll never have a romantic relationship again. Many women go through a divorce and enter subsequent relationships. When those fail, the assets they possess can be at threat from a relationship claim. To avoid this, take legal advice and put a structure in place such as a trust to protect the assets you now have and those you may acquire in the future. If you have a new relationship partner, do not rely solely upon a trust to protect your wealth.

Update legal documents

During the course of a relationship it’s common practice for couples to leave their powers of attorney and wills in favour of each other. For example, if she is no longer legally able to act for herself, pursuant to her power of attorney, he may act in her place and vice versa. The same applies to a couple’s wills. That is, he is likely to be an Executor of her Will and if she dies, everything will go to him and of course, vice versa.

On separation and divorce, it’s unlikely individuals will want to continue with these legal arrangements. If you fall into this category, or if you don’t have a power of attorney and will, I recommend you talk with your lawyer and immediately put these documents in place. Having legal documentation on hand assists in others helping you and your loved ones and avoids unnecessary delay and expensive legal fees.

Insurances

It’s also commonplace for couples to nominate each other as beneficiaries of their life insurance policies. Again, people who are separated and divorced rarely want their ex-partners to end up benefiting from their death. To avoid this, ensure you talk with an insurance broker. Do not cancel an insurance policy however, until you have another one in place. This recommendation applies to all insurance policies where you receive benefits, such as income protection policies and medical insurances.