IT PAYS TO PLAN BEFORE YOU LEAVE...

Financial planning before, during and after separation and divorce is vital to make sure that wealth is not destroyed as part of the splitting up process. Many people think about separation long before they leave and it is good to plan your finances before separation. Three tips to help plan your financial situation before separation and divorce:

1. Collect information about all the marital assets, including, for example

• bank statements for jointly and individually held accounts
• credit card statements for last 12 months
• mortgage statements
• pay slips for both you and your partner
• tax returns
• business tax returns and bank statements if there is a family business
• superannuation member statements
• annual statements and tax return if there is a self managed superannuation fund
• details of any shares or managed funds
• details of any investment properties
• information about any personal insurances

This information will be important when negotiating your property settlement and can be hard to access once your have left the marital home. It will help you understand what you own and what there is to be shared between you and your former partner.

2. Prepare a budget/cash flow so that you know how much you will need to get you through until a settlement can be negotiated with your former partner.

There will be some initial set up costs if you are moving into rental accommodation. Enquire from a local real estate agent about how much bond and up front rent you will have to pay, will you need money for new furniture and household items, estimate your utility bills, food costs, travel/car costs, medical and pharmaceutical expenses, personal care and leisure expenses. You should also make an allowance for at least some initial legal advice. Write down these expenses and make plans about how you will pay them.

3. If you are not earning an income, make sure you have access to money after you leave.

Many people are surprised to find that joint bank accounts are cleaned out and that their partner's wages are no longer paid into the account, and their access to the 'family' credit card is cut off once they have separated. Open up a bank account in your own name and try to put some cash away each week before you leave so you have a nest egg to draw on in the time immediately after separation. Apply for a credit card in your own name - this will probably only be approved if you have some income from work. Can you get any interim financial support from your family? Enquire at Centrelink about what benefits you might be entitled to. If you receive Family Tax Benefit A & B, ask Centrelink to pay this into your own bank account.

These few steps can help reduce the level of financial stress and anxiety in the period immediately after separation and allow you time to work through some of the emotional and legal issues before you begin to negotiate a financial settlement. The information gathered as a result of this financial planning for divorce and separation will be useful whether you choose a collaborative divorce, mediation, or the more traditional family law settlement. In all processes, accurate and complete financial information is essential.

At MCA we have a team of experienced divorce financial planners who can assist you with all aspects of your financial planning, including planning for your separation.

Monique Message works in a centre of like minded professionals who's aim is to guide their clients by empowering them to take control of their lives through education in investing and financial advice during and after family break downs. She specialises in advising women who are going through this difficult time and helping them make important financial decisions that can impact their future well being.