Separating? How to deal with the finances in a simple way.

A separation or divorce is never easy and can easily turn into an absolute nightmare.  It can drain you emotionally and mentally. On top of that you may also have joint assets and liabilities including property that have to be split between you. Here is how to deal with the financial side of a separation in a simple and straight forward way.

Check all joint and shared accounts

As a couple both of your names are often registered on shared accounts which means that you are both responsible and liable for these accounts. It is therefore a good idea to check all your accounts and remove your name or close the account, so you are not held responsible for any future debt generated by your partner. This could be a credit card or another unsecured liability. It may also be a liability that is secured against an asset such as your home. Often the only way to avoid this, is to close the account as the lender may refuse to take one party off the account.

Audit your shared Assets

Once you have audited your financial liabilities, you then need to go through all your shared assets. Some of these assets may still have repayments outstanding such as:

• Car Loans
• Home mortgage
• Investment mortgage

As some of the liabilities may be in joint names it is best to deal with it straight away. If one party is staying in the home and the mortgage is in both names, both parties are still liable for payment and it is therefore a good idea to find a permanent solution as soon as possible.

The first port of call is to contact your mortgage broker or speak directly with your financial lender. Ideally one person can refinance and take over the financial liability and ownership, however, if this is not the case, you may be forced to sell the asset.

If you are in a situation, where you have to sell an investment property or the family home it is a good idea to bring your preferred real estate agent in as early as possible once you have agreed on how to split the assets.

If you have to sell a property

If the property is in both names, then you need to agree on a real estate agent who you both can trust and who also has the ability to stay impartial. Under typical circumstances an agent may be dealing mainly with one of the partners, however, if the sale is due to a breakup, it is extremely important that both parties are kept up to date.

It is therefore vital to clarify with the agent, how the agent is going to keep both parties informed. You should also ask the agent for past client contacts or ask for testimonials to verify how the agent will act.

The agent also needs to have great negotiation skills ensuring that all parties are happy throughout the sale. Discretion is a must and the agent should never disclosure that the sale is due to a separation or divorce.

You also want to choose a real estate agent with empathy for your situation while selling your Perth property. A good agent is somebody who listens to you and your soon to be ex-spouse and understands your concern and situation. At the same time, the agent needs to stay objective, and focused on a win-win solution for you and your soon to be ex.

As emotionally draining a separation can be, when it comes to your liabilities and assets please try to consider it as a business transaction. Find a solution so you can move on. Always consider getting legal advice to ensure you rights are protected.

Readers should always seek their own independent advice prior to making any decisions regarding property or finances.