There is no question that divorce is one of the most stressful and emotional things you can go through, and unfortunately it is the outcome of a staggering proportion of UK marriages – a percentage which is predicted to spike this year in England and Wales following the introduction of the ‘no-fault divorce’ reform on 6th April.
On top of managing the grief that comes with the breakdown of a relationship, divorce is a complex legal process and there are many difficult practical factors to consider. These include changing your living situation, discussing custody of any children, and separating your shared accounts.
It can be tempting to push money matters to the bottom of the list as other decisions threaten to overwhelm you, but no matter how amicable your separation is it is vital to protect your finances during a divorce. Knowing how much money you have to your name now – and will have once you are separated – will give you a sense of security and help you to put in place realistic plans for the future.
Save yourself time and energy and trust the expertise of a financial planning advisor who will conduct a professional appraisal of your assets and assist you in safeguarding your wealth. Financial planning advisors can also help you to navigate your shifting financial situation, from setting aside funds for your legal fees to recommending investment options for any settlement you may receive.
Prepare for conversations concerning your wealth and ensure that your finances are protected during the divorce process by taking these three simple steps:
Know Your Rights
Knowing your rights is key to understanding any financial obligations you may have with regards to your ex-partner. For example, if you jointly own your home, the property cannot be resold or re-mortgaged without your consent, and you are both liable for the full mortgage. Be aware that the legal responsibility for paying any outstanding bills, e.g., from your utility providers, lies with the person or people named on the account. You should also gen up on the money and assets you are entitled to from your partner, re-reading any relevant legal documents such as a prenuptial agreement.
Change Your Will
Most married couples have a joint will which describes their shared assets and other important estate planning details such as the named guardian for their children should they be unable to care for them. You need to update your will immediately after your divorce is finalised to ensure that your estate is distributed as you want it to be, especially if your ex-spouse was the executor. You can also change your will straight after your separation prior to getting a legal divorce if the process is dragging on.
Separate Shared Finances
As soon as you are able, separate any shared finances. Primarily this will mean contacting your bank or building society to alter the way any joint accounts can be managed, but do not forget the smaller things like car insurance. All insurers require immediate notice of any change in personal circumstances that may affect your agreed policy. Following the divorce, once your assets have been divided and placed into sole names, apply for a notice of disassociation to break the connection between your credit and that of your former partner.