Article written by Mandeep Clair, Family Solicitor
When couples decide to separate, the emotional impact can be very tricky to navigate. It can be financially disruptive too. In this article, we look at five key steps to give yourself a clear understanding of your financial circumstances to allow you to navigate your separation smoothly.
1. Document your assets
One consequence of a divorce is to determine how assets will be distributed between the parties. We would advise you to create an inventory of joint and individually owned assets, assign a value to these assets and gather relevant documents such as bank statements, insurance documents and investment details. The same applies to debts.
2. Manage your outgoings
We would advise you to review bank statements and other documents to track your monthly outgoings including household bills, transportation, food, childcare arrangements, entertainment and other expenses. Are you paying for subscriptions you no longer need? Review and update your budget to reflect your circumstances.
3. Gather your financial statements
We speaking to a family solicitor, we would recommend you gather current and past financial documents to showcase a clear picture of your shared and individual accounts. This may include:
- Assets: savings and investment account statements for the past 12 months.
- Property: a list of real estate, vehicles and other assets accrued before and during your marriage.
- Taxes: income tax returns from the previous three years.
- Debts: details and balances for mortgage accounts, personal loans, credit and store cards.
- Income: salaries, rental income, dividends and any other revenue streams.
Knowing all the debts and liabilities is crucial for fair distribution and repayment planning.
4. Develop a financial plan
It is advisable to outline your short-term and longer term financial goals including savings, budgeting, debt management and retirement strategies. Ensure your insurance policies and Wills are up to date. Consider a savings fund to cover any unforeseen expenses. You may wish to consult a financial adviser to help you understand the financial implications of divorce and plan for the future.
5. Find a good solicitor
A family solicitor will advise you on your rights and responsibilities, break down and explain without legal jargon and help you to make informed decisions regarding your future.
Even if you are not planning to contest matters, a family lawyer will act as an advocate to protect your interests and help you to achieve your goals.
For more information or to discuss a particular family matter further, please feel free to email me or contact the team on 020 8858 6971.