Divorce and Separation Financial Checklist

A relationship breakdown, separation or divorce is a challenging experience, especially in the earlier stages. It can be a confusing, clouding, and emotional time, making it all the more difficult to make objective financial decisions. That’s where ActOn Wealth’s professional divorce financial advice can make all the difference. We remove the emotion and guide you towards decisions that lead to the best financial outcomes for you and your dependents. 

To assist you during this transition, we have compiled a comprehensive and essential checklist for separation and divorce. We hope it helps you feel more in control and confident about protecting your financial status. 

The Essential Divorce & Separation Checklist 

There’s a big list of things to do when getting a divorce. Here, we focus on the finances only. 

First Thing to Do When Getting a Divorce 

Whilst your hands may be tied in some areas by the Courts, here are some of the very first things you can and should do when a relationship breaks down. 

• Open individual bank accounts in your name only. 
• Make sure your salary gets paid into your new one-name-only account. 
• If possible, freeze any joint credit cards and accounts. 
• Monitor all joint account activity for unusual activity. 
• Change all passwords. 
• Make copies of all financial documents and store them in a secure place (more on this in the documents to collect section below).

Start Thinking About Child Support and Family Considerations 

Your children or dependents are no doubt your number one priority. Therefore, they must be a big part of your divorce list of things to do. You’ll need to review and update school fee arrangements and understand the tax implications of child support payments. You may also want to consider a Family Trust for the children’s education or future. ActOn Wealth can assist in all these areas and more.  

Re-evaluate Your Cashflow and Budget 

Assuming you and your former partner contributed to the household budget and cashflow, it’s time to revisit this. You need to chart a new financial direction based on your income only. This may still be a little challenging as you may have to await Court outcomes, but it’s all about managing what you can control. Our financial advisors in Melbourne are experts in budgeting and cashflow management. We’re able to take a fresh approach to your budget and reimagine an achievable, results-driven reality for you and your dependents. 

Collect, Copy and Safely Store Documents 

Unfortunately, a big part of any relationship breakdown is paperwork. Maintaining copies of statements, reports, purchases, etc will be very important in this process, so it’s good to start as early as possible. A separation and divorce checklist must include ticking off documents such as: 

• Mortgage records 
• Loan agreements 
• Health insurance 
• Vehicle registration 
• Tax returns 
• Bank statements 
• Superannuation details 
• Investments 
• Bills and debts 
• Passports
• Inheritance records 
• Records of any assets owned before the relationship started  

Contact banks, energy providers, lenders, superannuation fund managers and any other relevant parties and ensure they are aware of the situation. Wherever possible, seek to freeze activity until a settlement occurs.  

Make a Property & Assets Inventory 

Another must-do on your separation and divorce financial checklist is collating all information about your property and assets. You will need a current market valuation on the family home and any joint assets, and provide evidence of property ownership structure and submit mortgage details. You may also need to update your home and contents insurance policies (more on this below). ActOn Wealth can assist in assessing the implications of selling versus retaining any of these assets.

Update Your Insurance 

While it’s not the number one priority, reviewing and updating your insurance should feature fairly early on in your financial separation checklist. As part of our thorough insurance advice, ActOn Wealth will forensically scrutinise your current cover and explore other more competitive and advantageous options.

Pay Attention to Your Superannuation 

For most of us, our superannuation fund is our most valuable asset or will grow to become so. You may need to identify if super-splitting orders are necessary and also revisit the beneficiaries. It’s also crucial to understand any tax implications should you be eligible to access funds early. This can be a complex area, but ActOn Wealth superannuation planning can help break things down and provide the most thorough financial advice based on your current situation and future wealth and well-being goals.

Revise Your Will

It’s essential to review your estate planning after any significant life change, including (and perhaps especially) a spouse or de facto relationship ending. Doing so should be another priority on your divorce and separation financial checklist. Updating your will, reviewing your Enduring or Medical Powers of Attorney and re-evaluating any binding death benefit nominations and family trusts are very important at this stage. Again, ActOn Wealth’s financial planners can help guide you through all these.

Understand Tax Implications 

Transferring or selling assets during a divorce can have Capital Gains Tax implications. Spousal maintenance and settlements can also affect your taxable income. Understanding the taxation considerations of your new situation is paramount, and ActOn Wealth tax planning accountants can assist. 

Once you have dealt with the above essentials, at some point, you will start thinking about the longer term.  Developing a new financial plan, reassessing your retirement goals and strategies, reviewing investment portfolios and building emergency funds are all part of a solid wealth-building strategy. Our comprehensive financial services are here to help you when the time is right. 

🛈 ActOn Wealth counsel remains strictly financial-only. We recommend contacting professionals such as the Family Relationship Advice Line in Australia on 1800 050 321 for emotional support.