It’s a fact of modern life that even with the best laid plans many long term relationships won’t be a ‘til death do us part’ coupling. And sadly, the process of separation and divorce can be just as devastating financially as it is emotionally.
The most recent figures show that in 2014, 121,197 marriages took place in Australia, while on the flipside, 46,498 divorces were granted. This suggests around one in three marriages could hit the rocks. Add in the breakdown of de facto and same sex relationships, and it becomes clear that large numbers of Australians will go through the separation wringer each year.
As part of the process, important decisions need to be made about your finances – often at a time when emotions are running high.
Seeking the advice of a family law expert makes sense. However it’s an option some couples simply cannot afford. So it’s good to hear our money watchdog – the Australian Securities and Investments Commission (ASIC) – has developed some online resources to help people navigate the financial aspects of ending a long term relationship.
ASIC’s new ‘divorce and separation financial checklist’ and ‘asset stocktake calculator’ can be very helpful to make informed choices and take practical steps. That’s important because the decisions made following the breakdown of a relationship can impact your financial well-being for many years to come.
Research undertaken by the Australian Institute of Family Studies for instance, found women tend to be especially poorly affected, in some cases experiencing a fall in income of more than 20 per cent following a divorce.
Understandably, many people don’t know where to begin when it comes to something like a property settlement. Others want to get the whole thing sorted as quickly as possible to move on with their lives. Nonetheless, it’s critical to think through your options carefully.
ASIC’s asset stocktake calculator provides an easy way to list all your assets and liabilities and get an overview of your current financial position – a good starting point to work out a property settlement.
The divorce and separation checklist is especially useful as it sets out recommended steps across a range of money matters from managing your mortgage following separation, through to updating your will and life insurance as a newly single person.
These resources won’t ease the emotional distress of a relationship breakdown but they do provide sensible suggestions to move forward with your finances. You can find ASIC’s financial resources on divorce and separation at the government’s MoneySmart website.