HOW TO: 5 STEPS TO SEPARATION
If you are still able to communicate amicably we recommend you make a list of joint expenses and work out how much needs to be paid into an account per week, fortnight etc. to pay those expenses as they fall due. It’s Ok to keep a joint account open for that purpose if you trust each other not to misuse it.
Work out how much you can each afford to contribute to that account based on your income and other expenses not covered by the joint list.
- Bank accounts – Open a bank account in your name only and get your wages and Centrelink benefits paid into this account.
- Joint accounts – talk to the other person about closing off joint bank accounts and dividing the amounts in there. Failing that ask the bank to freeze the account or make it so that both signatures are requires.
- Credit cards – If the credit card is in your partner’s name can you stop using it? If it is in your name and he/she has a card – consider cancelling it.
- Joint credit cards – consider cancelling or freezing the account
- PIN and password –change all PIN’s and passwords.
Please note – we always encourage you to talk to your ex about these steps before taking them.
Your mortgage and other debt
- Know what the mortgage and bills are – how much, when payable.
- Know what the loans are. What are you liable for? Don’t forget guarantees.
- Let the lender know you have separated, keep in contact if you are having trouble making repayments. Can you pay the minimum repayment? Can you renegotiate the loan?
- Don’t forget that if a debt is in joint names, the only way to ensure you are no longer liable for the loan is to remove yourself from it. Even a court order stating that the other person is totally liable for a loan, doesn’t remove your liability. Only the lender can do that.
- Mortgages – do you have a redraw option? How can you stop the other person using the redraw? Eg – joint signatures for any withdrawals.
- Bills – The person staying in the home should put all utility bills (phone, internet, electricity, gas) in their name only – the person moving out, should have their name taken off. You should get a balance as at the date of separation.
- Another tip about a mortgage – if you want to keep the house you will have to take over any mortgage in joint names into your sole name. You must keep up repayments without falling into arrears and if you fear you might, talk to your bank or other lender.
- Go and see a broker to make sure you will actually be able to take over the loan before you start any negotiations; also to make sure you really can afford to make repayments
- Go and see a financial advisor/financial counsellor if struggling
- Know how it is owned – joint names or not?
- If it is on the other person’s sole name – you may need to protect the property with a caveat.
- If rented – can you change the lease to your sole name? Or have your name taken off?
- Superannuation is an asset capable of being divided between couple after separation.
- If you are paying extra into your super you may consider stopping the payments for now.
- Check who your beneficiary is on your super
- Get a statement as at separation but just be aware if the matter goes to court you will need to provide current balances.
- If you can’t get the other person’s super statement from them, you can request it direct from their super trustee – it’s called a “Form 6 Request for information” and will be available on the family court website or the super trustee’s website.
- If you are worried the other person may be able to access their super get legal advice about applying for a “flag” ( stopping the other person being able to draw down their super)
- For a self managed super fund – are you protected? Don’t forget that you can’t have a SMSF with only one person so it will have to be wound up which may involve selling assets
Companies and other financial entities
- Do you know how assets are owned – i.e. by a company or family Trust?
- Get the relevant paperwork – e.g. get the trust deed, you need to know who the settlor and beneficiaries are
- If unsure about a company do an ASIC search, you need to know who the directors are and how shares are held
- Don’t forget that to separate the interests in a company you need to take further steps to have directors removed
- Make sure you know about any company liabilities – tax, personal guarantees
- Start getting ready – what other things do you own and what are they worth?
- Who owns them?
- What do you owe?
- How easily can you access these assets – ie a term deposit
See our fact sheet – Property preparation – on our website.
This is a handy online tool:
- Will – Update your will as being separated does not cancel your existing will. Divorce may invalidate it.
- Life insurance – review the level of cover, are the named beneficiaries still correct?.
- Super – are the named beneficiaries still correct ?
- Power of attorney / Advance Plan- if you have something in place is it still what you want?
- Get copies of all important documents