They Can’t Just Cut You Off…
Are you contemplating leaving your partner, but are apprehensive about the impact on your finances? Fear of a lack of resources is not a good reason to stay in an unhappy relationship! With some planning and support, you can manage your separation so your standard of living does not plummet.
One of the common reasons people tend to delay family law proceedings is the belief that it will leave them in an untenable financial position. Unfortunately, it is usually women who are most anxious about this issue, because generally they have lower average incomes and assets than men. Occasionally we see female clients who are not sure of their finances at all, because they have relied on their partner for all money matters. This is particularly the case where small children are involved, and is entirely understandable.
So Where To Start?
If you are not sure about where your money is, the best time to begin collating information about your finances is before you separate from your partner. Remember, you do not need to let your partner know you are making these enquiries.
Talking to a family lawyer can help to clarify what exactly you should be looking at in your particular situation. However, some basic questions to get your enquiries started are:
- What is your income? What is your partner’s income? Is it likely to change in the near future?
- How much tax do you pay?
- What bank accounts do you have, including transaction accounts and savings accounts. Get a copy of the latest statements, or at least find out what the balance of the account is.
- How much superannuation do you both have?
- What kind of investments do you have? Shares? Term deposits? Peer to peer lending? Bit coin?
- What credit cards do you have? How much is owing on the cards?
- What kind of loans do you have, and what are the amounts of the loans? For example, do you have a mortgage? Do you have a car loan? A personal loan?
- Do you have an informal arrangement with your family or friends? For instance, many people borrow money from their parents to buy property.
- Have you received any gifts or inheritances? Are you likely to in the near future?
- More complex issues: do you or your partner run a business? Are you involved in any trusts?
It is important that you look at the assets and liabilities owned by you, your partner and jointly owned. When you are involved in a family law matter, you owe your ex-partner a duty of full financial disclosure under the law. This means you need to be completely transparent about your finances. Furthermore, you need to be ready to back up your statements with documentary evidence.
Now is not the time to be ‘gifting’ money to family members, with the intention of retrieving it after settlement. Courts are savvy about transactions that are ‘intended to defeat an anticipated order’. The key is to be open and honest about your finances. This will help encourage your former partner to be honest too, and will facilitate a faster resolution.
Most importantly, remember that there are safety clauses built into the legislation to ensure that you will not end up with nothing, even if your partner has been earning significantly more than you. This is particularly true when you spend more time looking after the children. Non-financial contributions are just as valuable as financial contributions, in the eyes of the Court. Even if you don’t plan on going to Court, this is an important factor to remember when negotiating.
If you have any questions or require family law assistance, please do not hesitate to get in touch with our firm. We are here to help you.