Money Talks: How to financially plan for a separation

Many women stay in unhappy marriages because they lack the financial knowledge to leave

Don't let financial fear stop you from moving forward

I am 45 years old and have been in an unhappy marriage for some time. The stress of the pandemic has exacerbated this, and I now feel that we have no other option but to separate. However, we have three young children, and my husband has always taken full control of our joint finances, so I feel very worried about the possible financial repercussions of separation or divorce. Have you any advice?

I am so very sorry to hear about your situation and appreciate that this is an emotionally turbulent and stressful time for you. We commonly find that women feel very financially vulnerable at this stage, and some may not have huge experience in financial matters. But try not to worry because with the appropriate professional legal and financial advice, independent financial stability can be established quickly, and you can happily move on to the next chapter of your life.

Get to Know your HouseholdFinances

Before you decide to separate, you need to try your best to gain a comprehensive understanding of your household finances. This will serve to educate you on what your finances will possibly look like after the separation and, also on how much you can afford to spend during the legal process. Prepare a budget, so you know exactly where you stand regarding basic living expenses and the big-ticket joint items like the car, mortgage or rent, insurances etc.

Create an Emergency Fund

Having an emergency fund in place to cover at least six months of expenses would be ideal to keep you going and cover any unexpected expenses you may incur during the separation process.

Paying off Joint Debts and Closing Joint Accounts

On separating, you would need to work with your husband to promptly manage joint financial affairs, particularly any loans or overdrafts as either of you could be asked to repay the full amount if the other party defaults. You and your husband more than likely have a mortgage together and making a decision regarding your home can be difficult. Because of the legal issues to consider here, your solicitor would be the best person to advise on how best to divide your home and deal with the mortgage side of things.

Pension Matters

Besides the shared family home, the next most valuable asset a separating couple can have is a pension. The court can treat a pension as an asset and order that the fund be divided into whatever shares are considered appropriate. Specialist advice is essential in relation to the value of a pension and how it should be shared.

Life and Sickness Covers

Any joint Life insurance policies would need to be reviewed especially as you have dependent children. You may have had joint cover previously with your husband so you will now need to ensure that the cover you both take out independently would still be adequate to protect your kids financially in the event of the untimely death of either you or your husband.

Too many women we deal with stay in unhappy marriages because they lack the financial knowledge and confidence to leave. Proper legal and financial advice will bring with it the relief and security of knowing that you are financially organised and will give you the soundest possible basis on which to move forward with an independent happy life.