FAMILY & RELATIONSHIPS
How to financially prepare for divorce
30 October 2019
In 2017, the Australian Bureau of Statistics recorded 49,032 divorces in Australia1. If you’re going through a divorce or separation, it’s important to know that you’re not alone and that there are many ways you can access support.
Whether you’re married or de facto, separation can occur for any number of reasons. And if it does, it can be emotionally and financially overwhelming. From a practical point of view, the process of separation and divorce will depend on your circumstances, including shared assets and whether there are children involved. It’s important to take steps to protect your finances and set yourself up for the future.
Relationship breakdown: 5 financial steps to take after a divorce or separation
1. Close your joint bank account
One of the first things you’ll need to do if you’re going through a divorce or separation is to close any joint bank accounts. You’ll then need to open your own transactional and savings accounts. You'll also need to consider:
- cancelling joint credit cards
- updating your bank on any new contact details, such as address, phone number or name changes
- requesting a 2-person signature requirement on any account withdrawals or mortgage redraws, and
- asking for bank statements to identify any direct debits.
This step is an important one in establishing your financial independence. If you need to set up a new bank account, Suncorp has a range of everyday and savings accounts to cover all your banking needs.
2. Keep track of assets and liabilities
If you and your ex-partner share assets or debts, it’s useful to list who is responsible for what, and what you plan to split. You can use ASIC’s asset stocktake calculator to work out your individual and shared assets and liabilities.
3. Update important documents
After a separation, you’ll need to update any documents in which you name your ex-partner as a beneficiary. This includes:
- your will
- any insurance policies, and
- your rental agreement (if you don’t own your own home).
It’s also important to know where you stand with your superannuation. Super is usually the second biggest asset in a divorce, after the family home. It’s treated as such, too – it’s included in divorce property settlement and may be split between yourself and your former partner2.
4. Notify service providers
If your name is on an account for any service provider, such as electricity, gas or Internet, you’ll be liable for any unpaid bills. Whether you plan to stay in your home or both leave the property, make sure you arrange a fair amount with your ex-partner to take care of utility payments. This could mean equal share of the bills up to the time you both lived together, or a split of the disconnection and relocation costs.
5. Create your own budget
A divorce or separation will likely mean changes to your expenses, income and savings. By completing a new budget that considers your income and lifestyle, you’ll better understand your current financial position.
To start, you might write down all of your expenses and income. Once you’ve done this you can decide which expenses are essential and which could be done without, at least in the short-term. Try tracking your finances online for free using Suncorp’s Budget Planner.
Get legal advice
Before you make any important decisions, it may be worth seeking legal advice. A divorce or separation can be challenging and traumatic, so receiving the right information for your situation can go a long way to simplifying the process.
If you need legal support, most Australian states and territories have Legal Aid services that can usually be accessed free of charge:
- Legal Aid Commission of South Australia – 1300 366 424
- Legal Aid Commission of Tasmania – 1300 366 611
- Legal Aid NSW – 1300 888 259
- Legal Aid QLD – 1300 651 188
- Legal Aid VIC – 1300 793 387
- Legal Aid WA – 1300 650 579
- Northern Territory Legal Aid Commission – 1800 019 343
Don’t forget to keep notes
The process of applying for a divorce involves a lot of attention to detail. To keep track of everything, you may find that taking notes of conversations or specific details is particularly handy. This is especially useful if you decide to engage the services of a lawyer for the duration of your divorce proceedings.
For instance, you’ll need to prove that you and your former partner have been separated for 12 months before applying for a divorce. By writing down the date you decided to separate, you’ll have the information on hand for when you need to refer to it.
Coping with divorce
Look after yourself
Going through a divorce or separation is a big change in your life. Among other emotions, it’s very normal to feel angry, anxious, hurt, lonely or shocked. To get through the experience of it, it’s important to be kind to yourself and ask for support.
What to do if you’re in danger
If you’re experiencing family violence, make sure you:
- call 000, if you’re in immediate danger
- call 1800RESPECT on 1800 737 732 to access 24/7 counselling or download the Penda app, and
- let Suncorp know what you’re going through by contacting our specialist hardship team on 1800 225 223 (8.30am-5pm AEST, Monday to Friday) or email@example.com.
Try out a financial checklist
For a more comprehensive list of steps, take a look at ASIC’s Money Smart divorce and separation financial checklist. It will guide you through the financial considerations you’ll need to make following a relationship breakdown and may help you to feel more in control of your situation. If you need further assistance, you can also find a free financial counsellor via Financial Counselling Australia on 1800 007 007.
Let Suncorp know
Suncorp understands that divorce or separation can lead to financial difficulty. If you let us know about your situation as soon as you can, we may be able to support you by:
- temporarily postponing loan repayments
- reducing the amount of loan repayments, or
- waiving early withdrawal fees if you need to access a term deposit.
- 'S.M.A.R.T' planning to help manage financial stress
- 4 simple ways to keep track of your spending
- Why you should consider establishing an emergency fund
2 Federal Circuit Court of Australia: Superannuation
Insurance issued by AAI Limited ABN 48 005 297 807 trading as Suncorp Insurance. Read the Product Disclosure Statement before buying this insurance. Go to suncorp.com.au for a copy. The Target Market Determination is also available. This advice has been prepared without taking into account your particular objectives, financial situation or needs, so you should consider whether it is appropriate for you before acting on it.
The information is intended to be of general nature only. Subject to any rights you may have under any law, we do not accept any legal responsibility for any loss or damage, including loss of business or profits or any other indirect loss, incurred as a result of reliance upon the information. Please make your own enquiries.