Paula Phelan is a Family Lawyer with Specialist Accreditation in this area from the Queensland Law Society. She has been a lawyer for 21 years and is the director of Phelan Family Law, a Rockhampton legal firm specialising in Family Law only.
In my first column, I mentioned that the approach to family law issues involves help from other professionals as well as your lawyer.
This week we introduce Brent Giles, a partner with Kennas Financial Services Rockhampton. Today Brent will talk about dealing with financial matters before and after separation.
Separating your finances in a relationship breakdown
Going through a divorce or separation is never easy and there will be many factors to consider. It is important not to forget to take the necessary steps to enable you to separate financially from your partner. To some this can be a daunting task particularly after years or sometimes decades of melded finances.
It is especially daunting for those who either have not taken an interest in or have been excluded from any involvement in the family finances.
Establishing your financial independence as quickly as possible can help protect your finances, reduce unnecessary stress and can even be the difference between a workable settlement and a disaster later on down the track.
Most couples these days have joint accounts, so the first essential step is to establish your own bank account
Bank accounts can be setup very simply online or in a branch.
If you are working, update your details with your employer to that your pay can go directly into your new account.
The next critical step is to close or freeze any joint bank accounts and cancel joint or additional credit cards.
Talk to your bank, and if there are any disputes between you and the other account holder it’s likely the bank will put a hold on your account so no money can be withdrawn until a resolution is reached.
In a recent case, where a marriage broke down after 17 years, the husband moved out into a unit and the wife stayed in the family home and cared for the children.
Both parties had good incomes and maintained shared accounts even though they were separated. They thought this would make it easier to provide joint care to the children.
As it turned out, the husband’s new lifestyle was expensive to maintain, and expenses were incurred by him without agreement. Very quickly $35,000 was drained from the joint account, leaving the wife high and dry and without cash flow.
In this instance if separate accounts had been established, the wife would have had certainty about her income and expenses during this time, reducing unnecessary stress and anxiety.
The money that disappears may be able to be recovered in the future as part of the property settlement, but that certainly doesn’t help in the short term.
That’s why it’s so important to protect yourself as early as possible.
If you have separated, you should consider taking these steps immediately.
You can also start to make these preparations and speak to your bank if your relationship is breaking down or you are concerned about the future.
This is not being sneaky. It is merely protecting yourself from being left high and dry.
A separation is emotionally draining enough, without having to be concerned around how you are going to live during that time.
It is important to create a team around you that cares for all areas of your welfare during this difficult time.