What to consider when protecting your finances after separation


Dealing with the mental stress and emotional lows at the end of a relationship is never easy, let alone taking on complicated and tedious administrative tasks such as managing your finances.

However, as time-consuming as these tasks may seem, it is best to address your financial issues as quickly as possible. In addition to dividing your assets and loans, there are many other financial considerations that often go unnoticed during the separation process.

To prevent long-term complications such as unwanted financial access, it is important to take the necessary steps to protect your finances. Here are the steps to consider when protecting your finances after separation.

Close joint accounts and cancel credit cards
Closing any joint accounts with your former partner will eliminate the possibility of them exploiting your finances in the future. In order to close a joint account, all funds must be cleared out and both account holders need to agree that the account should be closed. In the case that your joint account is overdrawn, make sure you pay it off.

Be sure to check your direct debits and credits as well to work out which ones you need to cancel or redirect to your personal account. After closing your joint account, ask for a written confirmation of the closure from your bank for record-keeping purposes.

Similarly, cancelling credit cards that you both share will prevent any unwanted debt sharing with your former partner. Keep in mind that your balance must be $0 before you can cancel your credit card, so the first step is to pay off your credit card in full. This includes any interest or fees. Discuss with your former partner to make payment arrangements.

Update your Will
Your Will may not be the first thing to come to mind after a breakup, however, it is a critical document that needs to be reviewed, especially if your former partner is listed as a beneficiary or executor. In the case that you appointed your former partner as your power of attorney, you might also consider revoking them upon separation if you deem them untrustworthy or financially irresponsible.

Also consider updating the conditions of your family trust or testamentary trust if you have one. Before making any major changes or updates to your Will, seek the aid of a legal professional.

Manage your income and expenses
Separating from your partner may mean that your income and expenses will change considerably. In order to make sure your lifestyle is not majorly compromised as a result, be sure to:

  • Budget. Calculate your individual income and expenses.
  • Consider government payments. Determine any government payments that you currently receive that must be cancelled or can be continued once you separate from your partner, as well as other pensions that you may be entitled to.
  • Manage your debt. It may be more difficult to manage debt by yourself rather than with a partner. Seek financial advice to help you manage your loans.

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