Rebuild your finances after divorce

The end of a relationship can be a big change for your life and for your finances. These steps may set you on your way to rebuilding your financial wellbeing after divorce.

It may feel overwhelming, but starting to rebuild financially after divorce begins with sorting out immediate issues.

First steps

Take care of immediate logistics, including finding out how your finances were organised when you were a couple, and how to manage your finances moving forward.

ASIC’s Moneysmart website¹ says your first steps should include protecting your finances.

Actions to consider may include:

• Closing joint accounts. Establish your own pool of money and redirect your pay into your own account. Make sure your partner can’t access your account and consider cancelling joint credit cards.
• Updating your bills and any rental agreement because you are liable for any unpaid bill if your name is on the account.
• Taking your former partner off any third party authority lists. This will prevent them calling financial institutions and requesting details of your accounts, including your super.
• Changing your passwords and online access to accounts, including your online banking PIN and email account.
• Taking stock of all your assets and liabilities. Understand your assets, debts and joint responsibilities. Your asset list includes your super.
• Check whether you may be eligible for any government or other assistance.

You may like to access Moneysmart’s Divorce and Separation Financial Checklist on how to separate your finances and get your money on track. It covers the major things from separating bank accounts and credit cards, to dividing your assets and managing your income and expenses.

If you separate suddenly

If you separate suddenly and do need to leave home urgently, it is important for getting control and regrowing your finances for you to take your legal and financial papers with you. Legal Aid Queensland² suggests taking documents including:

• Birth and other certificates
• Wills
• Passports
• Visas
• Bank and cheque books
• Superannuation, tax and other financial papers.

Seek expert advice

When you separate, there are avenues for free legal advice. Legal Aid agencies and community legal centres are available in every state and territory and can provide free legal advice.

Also consider seeking expert financial advice. QSuper members have access to financial advice about superannuation and managing your money through QInvest.³

Your superannuation

Getting your superannuation sorted after your relationship ends is an important step in planning for your future.

Once you separate or get divorced, super is treated as a type of property and can be divided by agreement or by court order. Splitting your super does not convert your super into a cash asset.⁴ It is still subject to superannuation laws, which means, for example, that it is usually retained until retirement ages are reached.

The financial hit of divorce

• The value of assets owned by a divorced man is 67% less than a married man of a similar age and socio-economic background.
• A divorced woman has assets valued at 90%  less than a married woman (all other things being equal). These differences are largely caused by the difference in assets held in the form of house ownership and superannuation.
• Super balances for divorced women are 70% less than married women, and 28% lower for divorced men compared with married men.

Graphic Source: Brown,L, December 2016, Divorce: For richer or poorer, AMP.NATSEM Income and Wealth Report

See our 7 things to do for your super after separation.

1. Australian Securities and Investments Commission, Moneysmart, Divorce and separation, accessed 20 December 2019 at www.moneysmart.gov.au/life-events-and-you/life-events/divorce-and-separation) 2. Legal Aid Queensland, Separation and divorce, accessed 21 March 2019 at www.legalaid.qld.gov.au/Find-legal-information/Publications/Legal-information-guides/You-and-family-law-a-short-guide/Separation-and-divorce) 3. QInvest Limited (ABN 35 063 511 580, AFSL 238274) is a separate legal entity responsible for the financial services it provides. When you receive personal advice from QInvest, the QSuper Board may pay for some or all the advice fee for advice related to your QSuper benefit. Eligibility conditions and advice fees may apply. Refer to the Financial Services Guide for more information. 4. Federal Circuit Court of Australia, Family Law matters: Superannuation, accessed 20 December 2019 at www.federalcircuitcourt.gov.au/wps/wcm/connect/fccweb/family-law-matters/property-and-finance/superannuation/superannuation