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Relationship breakups: five financial factors to consider

Money is a complex part of a relationship split but the pain can be lessened if you prepare financially before detonating.

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Splitsville is a popular place at the start of any new year, and 2022 has been especially active for couples seeking to separate.

Australian Family Lawyers chairman Grant Dearlove says historically inquiries for divorce and relationship matters in the early months of the year have increased 40 to 50 per cent.

“Many couples use the new year to consider the future of their relationships,” he says.

“This year, with impacts such as Covid, we have seen a 77 per cent increase.”

Family law fee financer Plenti also sees activity increase up to 30 per cent in the March quarter, and CEO Daniel Foggo says financial separation can be “complex and emotional”.

Walking away from a relationship comes with extra money stresses.
Walking away from a relationship comes with extra money stresses.

Life Sherpa spokesman Christopher Zinn says separation and divorce are “the most damaging sledgehammers you can use to smash your wealth now and in the future”.

“If there’s any hope of staying together, apart of course if there’s been any kind of abuse, take all the help and advice you can,” he says.

If a relationship can’t be saved, consider these factors before splitting.

ASSETS

List all assets, and think about who keeps what for sentimental and financial reasons.

“You may need legal advice as splitting assets such as the family home or a superannuation account can involve costs and taxes if not done correctly,” Zinn says.

“For example, in some states, there can be stamp duty relief in transferring a property from to one of the parties if it is court sanctioned.”

LAW CHANGES

Zinn says the law and court judgments concerning married and de facto couples have changed, so make sure your decisions comply to avoid legal challenges.

Foggo says a majority of family law matters settle out of court, and before engaging a lawyer consider the cost of legal advice and how it will be paid for.

Plenti CEO Daniel Foggo says financial separation can be complex. Picture Supplied
Plenti CEO Daniel Foggo says financial separation can be complex. Picture Supplied

REAL ESTATE

This is usually the main asset involved in a separation, and its ownership should be understood clearly, Foggo says.

He says people should document contributions they have made such as making mortgage payments or funding home improvements.

CHILD SUPPORT

“The Federal Government calculates child support taking into account each parent’s income and other factors,” Foggo says.

“However, you are also able to agree an outcome privately if you each receive independent legal advice on the agreement.”

SEPARATE FINANCES

“Close any shared bank accounts and, unless you have agreed with your partner, close any shared credit cards that have no outstanding payments,” Foggo says.

Originally published as Relationship breakups: five financial factors to consider

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Original URL: https://www.adelaidenow.com.au/lifestyle/smart/relationship-breakups-five-financial-factors-to-consider/news-story/4dd8d63f3690b36bacd8222c7803c9df