Y o u r M o n e y
MONEY WORRIES OVER DIVORCE AND SEPARATION
Separating from your partner is a stressful and emotional time, no matter who made the decision. There is a lot to think about, but with a little planning and preparation you can get through this difficult time possibly more quickly or probably with less adverse impact on the children. Joe Walsh of the FSA reports
W
hen relationships break down, finances may be the last thing on your
mind. But, if you can take control at the outset, you can avoid difficulties further down the line. Separation affects more than just you and your partner. You will need to think about how the children will be provided for, if you have any; your living arrangements; how you would share the assets and financial resources that you each have, for example your home, income and savings and how you will be affected financially now and in the future.
For most couples, separation means a temporary or even longer term lower standard of living than they had during their relationship. It can be more expensive to run two households and this should be considered at the time of separation. It is important to consider how any children will be affected when you separate, both immediately and in the longer term. When dealing with the financial consequences of separation, the children’s best interests should be considered first.
The steps involved
Many people prefer to reach an agreement about financial matters when a relationship ends. This can be done privately, or with the help of a solicitor or mediator. However, you may have to ask a judge to make a decision for you. If you go to court the outcome will depend on your legal entitlement, which will depend on whether you’re living together, married or in a civil partnership.
Living arrangements
Deciding how to deal with what was the family home can be very difficult, both
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financially and emotionally. When you are thinking about what to do, you may find it helpful to know how a court might deal with your circumstances. The current state of the economy – for example, how easily you can sell a home or find a job – may affect what you ultimately decide to do and how and when you decide to do it.
If you have children
As parents, you are both financially responsible for your children, including any adopted children. This means the parent without main day-to-day care is expected to help with the cost of looking after the children. This is usually done by paying maintenance to the parent who does.
Each parent should pay towards the costs of the children according to their resources. However, if the parents cannot agree about how much they should each contribute, it is the parent without main day-to-day care who can simply be obliged to pay maintenance at a specific rate. This applies whether you are getting a divorce, dissolving a civil partnership, splitting up after living together or where you have never lived with your child’s other parent. If you are unmarried, you will not be financially responsible for any step-children of your former partner. There are a number of ways to help pay for your children’s upbringing for example Private agreement; Child maintenance through the Child Support Agency (CSA); Going to court; Insuring child maintenance. You may also want to think about what financial support may be available from government, and what you’ll need to do if your circumstances change.
Splitting what you have Breaking up means you will now each need a home, possessions and the financial
means to meet your living expenses. You can agree how you divide belongings, savings, investments, income and other assets between you in whatever way you like. However it may sometimes be useful to know how a court would deal with your situation and what they would consider to be a sensible outcome and you may wish to take this into account in your discussions. Whatever your circumstances, you can agree how to split your assets and you don’t necessarily have to involve lawyers or the courts. However, you may prefer to use a family lawyer or a mediator.
Managing money
Starting out on your own again can feel daunting, especially if someone else has been making the financial decisions until now. You may need to think about trying to maximise the income that is going to be available to you; how to budget so that you can manage on that income and any assets you are left with following financial settlement; and things to think about to get and keep your finances on a sound footing for the future.
To find out more about this subject The Consumer Financial Education Body (CFEB), established by the Financial Services Authority, the UK’s financial regulator, has a new website:
www.moneymadeclear.
org.uk/divorce It has been launched as part of it’s range of impartial tools and resources to help people with their finances. Whether you are thinking about divorce or separation or are going through the process the site offers clear, practical help with the complex and stressful financial issues. It also explains the legal processes involved. And, as it’s from CFEB, established by the UK’s financial regulator, you can rest assured it won’t try to sell you anything or recommend specific financial products or providers.
www.raf-ff.org.uk
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