The chief concern for many couples looking to separate is the state of their finances which can complicate the process. Between children, houses and bank accounts, the financial back-and-forth has left many looking for outside guidance in order to try and come to an agreement on how these will be arranged. Here are some of the financial considerations you may need to think about.
Splitting finances during separation is complicated with the inclusion of children. If both parents are financially independent, things will go much smoother if there is a civil agreement in place about sharing custody. Discussing the roles and responsibilities of each parent will help to better formulate the financial plan in relation to their daily living costs. Matters can be complicated if the child/children have ongoing medical issues that require financing or take on extracurricular activities or are enrolled in a private school. All of this will need to be taken into account possibly even leading to the creation of a separate budget.
The Family Home
If the property was attained during the period of marriage, it is by law considered to be marital property. This means that both partners are responsible for paying for the home even if they are currently separated. On the other hand, it is common for many separated partners to decide that the individual using the property is the one who is responsible for financing it. In the case of separation, many believe in keeping the home for the benefit and stability of their children, unless both partners are financially stable or either has the necessary income to keep a hold of the property, it may lead to an individual taking more debt than they can handle on a single income. In instances like this, the best option may be to sell the home and split the profits.
As a part of a marriage or civil partnership, all of your debts are considered to be shared between the involved parties making it important to decide which of the debts have been incurred individually and which you are happy to keep repaying in tandem. Credit cards taken out in joint names can also be a burden further down the line and it’s important to consolidate them if you are able.
Draw up an Agreement
Involving a lawyer isn’t a must when it comes to managing your finances but for your financial security and that of your ex-partner, it may be in your best interest to do so. In the instance that your partner is not happy with the separation or any agreements made as a part of it, they may begin to overspend on shared bank accounts incurring a joint debt or on the contrary, refuse to pay back the instalments on your mortgage, landing the responsibility squarely on your shoulders. Having a lawyer draw up clean lines of financial responsibility will help protect your credit.
Keeping finances running smoothly is difficult on the best of days but with the added complication of separation, it can become difficult to manage pitfalls, but in keeping with our areas of financial consideration and keeping your mind focused on your goals you can strive towards financial independence.
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