Going through a separation or divorce can be overwhelming, especially if you feel unsure about the financial aspects. This post aims to help you understand the basics of the separation process, whether you are legally married or in a de facto relationship. Knowing what to expect can make the journey a bit smoother and help you feel more in control.
The Basics of Separation
Under the Family Law Act in Australia, the process for separating is quite similar for both married and de facto couples.
The key steps are
Agreeing to Separate:
The first step is deciding to separate. In Australia, we have a no-fault separation system, which means it doesn't matter why you are separating just that you are. Only one person needs to decide to end the relationship for the process to start. Importantly, you do not have to be physically separated to be considered legally separated.
Financial Settlements:
Once you've decided to separate, you'll need to agree on how to divide your assets (including your home, savings, super and other ‘property’). This is then formalised in a Separation Agreement, however if you cannot agree you may need to get the court involved.
Custody of Children:
This can be done concurrently with step 2, as it can have overlapping considerations; but you will need to agree on how your children are to be raised including living arrangements, contact, and financial contribution/support. As with financial agreements, where you cannot agree, you may need to get the court involved.
Apply for divorce (if you're married) If you are married, once you have been separated for more than a year you are able to apply for a divorce by completing and lodging the appropriate form.
Who Can Help You?
Several professionals can assist you during the separation process. Each plays a different but important role:
Family Lawyers:
They are your key support during this process, providing legal advice and helping you understand your rights and obligations. They can also represent you in negotiations and court if needed.
Mediators:
These are neutral third parties who help you and your partner reach an agreement on dividing assets and other important matters.
Financial Advisers:
We offer guidance on managing your money, ensuring that the division of assets leads to a stable and secure financial future for you. In a standard divorce process as your Financial Adviser, I would act on only your behalf, in your best interest.
In a collaborative process Financial Advisers act as a ‘neutral’ helping to create common language around money.
Psychologists:
The divorce process is extremely emotionally taxing, and having a good psychologist in your corner can help you manage your mindset, and curtail negative thoughts that could result in poor decision making.
As with an adviser, in a collaborative process they can also act as a neutral, helping translate complex emotions between parties.
Why Involving a Financial Adviser Early Is Beneficial?
Many people think of Financial Advisers as someone you see after everything is settled, to help setting goals and make decisions as to what your next steps are; however in my experience being involved as early as possible is really beneficial. Here’s why:
Empowering you
My first job is to help you understand your current financial situation. This includes understand the pool of assets and debts, entities and trusts, and the reality of income, and expenses, giving you a clear picture of where you stand. This is more so important in situations where one party has made most of the financial decisions, as it helps even out knowledge gaps, power dynamics and reduce mistrust.
Long Term Considerations in your decisions
Financial decisions are not limited to that moment in time. My job is not only help you understand the current asset split, but more importantly what that looks like over time. For example, keeping the family home might seem like a good idea, but if you can’t afford the mortgage and maintenance costs, it could become a burden.
Navigating Nuance
While most matters are clear on the surface, I have an understanding of the small details and nuances that can ensure you get your best outcome; for example the impact of your separation on Centrelink Benefits such as family tax benefit, or Carers Allowance for children.
Finding your 'Why’
Given the high stress in this process, its common to get caught in short term thinking because we lack the bandwidth or context to look ahead. A big part of my process is, at the right time, to visualise your aspirational life, both providing context to current decisions but starting to consider your life post-separation.
In closing
Understanding the separation process and knowing who can help you is the first step towards taking your first steps in your new life. With less ambiguity you are able to make better decisions and be clearer on your situation, hopefully resulting in a less arduous and much faster process.
If you need an Independent Financial Adviser who specialises in both the Financially Technical aspects, as well as the Emotionally technically aspects, please get in touch.
Additional Resources
If you are considering separation you can find more information visit
If you are unsafe or experiencing family violence please visit
