Navigating through separation finance

Divorce or separation can be one of the most challenging and emotionally taxing experiences a person can go through. It can be even more complex when it comes to dividing assets and liabilities accumulated during the relationship. This process is known as separation finance, and it involves taking stock of jointly-held assets and liabilities, understanding the complexity and emotional aspects of dividing them, and considering the long-term financial implications of the division.

Separation finance refers to the process of dividing assets and liabilities when a relationship comes to an end. This can include any assets and liabilities acquired during the relationship, such as property, savings, investments, and debts. It is essential to approach separation finance with care and consideration, as it can have a significant impact on the future financial well-being of both parties.

One of the first steps in separation finance is taking stock of jointly-held assets and liabilities. This involves identifying and valuing all assets and liabilities, including those held in individual or joint names. This step can be particularly complex, as it may require assistance from a financial professional or legal expert to ensure that all assets and liabilities are accounted for accurately.

Dividing assets and liabilities can be a complicated process, both financially and emotionally. Many assets may have sentimental value, and both parties may have strong emotional attachments to them. It is important to approach this process with sensitivity, particularly when it comes to items such as family heirlooms or sentimental possessions.

Tax implications also need to be considered when dividing assets and liabilities. For example, transferring property or investments may trigger capital gains tax or stamp duty. It is important to seek professional advice on the tax implications of dividing assets and liabilities, as this can have a significant impact on the final settlement.

It is also crucial to consider the long-term financial implications of the division. For example, the division of property may impact the ability to purchase a new home in the future. Likewise, the division of investments may impact retirement savings or future financial goals. It is important to take a long-term view and consider the financial implications of the division carefully.

Separating financial accounts and establishing new ones is also an essential step in separation finance. It is important to close joint bank accounts and credit cards and establish new ones in individual names. This can help to prevent any future financial disputes or issues.

Particularly where ongoing debt is required, and before coming to an agreement, it’s important to make sure you know how much the banks will be prepared to lend to you on the basis of your ongoing position. This is where your mortgage broker comes in. A pre-approval may also help reduce the risk of non-settlement once you come to an agreement.

Finally, it is essential to approach separation finance with careful planning and consideration to reach a fair and equitable agreement. This may involve negotiation or mediation to reach a mutually acceptable outcome. Seeking professional advice from a mortgage broker, financial planner or legal expert can also help to ensure that the final settlement is viable, fair and equitable, and so that both parties can move forward with financial security.

Luke Meisenhelter

With over 14 years in the finance industry Luke has helped countless clients achieve their finance goals. As the Managing director and founder of Loanright Financial services Luke now manages a team of experienced mortgage brokers with a combined total of more than 60 years finance experience in residential and commercial lending as well as business and asset finance. As a leader the finance industry Luke has become an innovator in the game, mentoring and coaching other industry professionals and pushing the limits on process driven workflow structures, systems, and accountabilities, aimed at providing the best possible financial outcomes for all clients in the shortest possible time frames. Throughout his years in the finance industry, Luke has become increasingly frustrated with the quality of information available to consumers in the property and finance market, most of which is biased and designed to capture leads by creating fear and offering a magic solution. It’s Luke’s goal to share his knowledge and provide free, non-biased, quality sources of information on finance and financial concepts to as many Australians as possible.