When a relationship ends, it is important to be smart about how and when financial connections are severed. Although every family’s financial circumstances are unique, you should consider whether anything on the following checklist is relevant and requires actioning:
1. Bank and Loan Accounts
If there are “joint” bank accounts/loans/mortgages be sure to change the account withdrawal procedures so that both account holders have to sign as joint signatories to withdraw any funds. You might also consider limiting or cancelling any redraw facility.
If there are accounts (credit or debit) in yours/your client’s name that the ex-spouse has access to (i.e. as a supplementary card holder), contact your bank to limit/cancel any access by your ex-spouse to that account.
Be sure to change your pin numbers and online banking passwords.
Make arrangements for any direct debits out of your personal bank accounts for your ex-spouse’s benefit.
2. Real Property
If there is any real property owned as joint tenants, as distinct from tenants in common, it may be necessary to sever the joint tenancy.
The primary reason to sever the joint tenancy after the breakdown of a relationship is to prevent yours or your client’s interest in the property from passing to the ex-spouse rather than in accordance with any Will.
3. Conduct ownership searches (Business and Property)
Perform company and personal name searches through ASIC to identify any businesses or companies in which the parties to the relationship might have an interest. It is very important to be aware of the state of affairs in any business or company either party to the relationship has an interest in.
Perform title searches and personal name searches to identify any real property in which the parties or either of them has an interest. It might be necessary to lodge a Caveat over any interest the ex-spouse’s has in a property to protect any equitable interest you or your client might have. You should seek legal advice from a team of Family Law solicitors prior to lodging any Caveat.
4. Wills and Power of Attorney
After separation it is important to review and reconsider any Will, in particular consider whether any amendment should be made to the Executor, Trustee or Beneficiary.
If you have a Power of Attorney it is important to consider whether a new Attorney should be appointed if this was previously the ex-spouse).
If there are children of the relationship and there is any concern about the other parent’s parenting capacity, it may be necessary to nominate a guardian in the Will so that if the person making the Will passes away, the guardian may challenge the living parent regarding who should care for any children.
5. Insurance and Superannuation
If you or your client has life insurance or an interest in a superannuation fund it is important to change the death beneficiary so that any benefit will not pass to the ex-spouse upon death.
Before leaving the marital home, ensure you or your client takes with them all financial records of the relationship (or copies if unable to retain originals). These documents might come in very handy if an arrangement with respect to distribution of property cannot be reached amicably.
If you or your client relocates from the marital home, make sure to redirect any mail and notify any organisations or institutions of
8. Notification to organisations interested in separation
We recommend the following organisations be notified of a separation: schools, sporting clubs, banks, places of employment, real estate agent’s, council and utilities providers and service providers.
9. Limitation Periods
It is necessary to be separated for 12 months before filing for Divorce.
Once the divorce order becomes final, a property application must be made to the Court within 12 months. For example, if a divorce order is made in court on 4 January 2010, and it becomes final on 5 February 2010, the property application must be filed before 6 February 20011.The court may allow a person to apply after this time limit if hardship for that party or the children can be established and a reason for the delay is given.
An application for de facto property settlement must normally be made within 2 years of the end of the. However, an application may be made after this time if the Court is satisfied that hardship would be caused to the party or a child if leave were not granted, or if the application is for maintenance, that, at the end of the standard two year application period, the person is unable to support themselves without an income tested pension, allowance or benefit.
10. Seek advice from a team of Family Law Solicitors
It is very important that advice is obtained from a team of lawyers specialising in Family Law as soon as possible after separation, if to do no more than discuss possible options and what might be a fair and reasonable outcome on a case by case basis.
If you have any questions or if we can be of any assistance, please contact: