Separating is often one of the biggest challenges an adult will face in their life. It is an emotional and difficult process, which results in loss in many forms. There are various things you can do to try and make this difficult process a little smoother:
The period following a separation can be extremely difficult for both the couple and the wider family. If possible, sitting down early with your partner to identify any immediate decisions that need to be made can enable separating couples to have some breathing space to digest the changes without pressing issues causing tension. For example, consider interim care of the children, temporary living arrangements and payment of the monthly bills. Similarly, looking to the longer term, deciding what is important to you both and what you want to achieve can be a useful way to keep conversations on track. Consider setting out your mutual aspirations and behaviours for your separation if you can, for example to put the children first, to focus on being fair, to aim to remain as amicable as possible, to be honest and open or to agree not to involve wider family or friends. It can be useful to revert back to these aspirations when you hit any bumps in the road.
2. The best interests of the children
Children feel the pressure and emotions of their parent’s separation, as much as parents try to shield them from this. Making interim and longer term arrangements for the children’s care during the school term and holidays will help with a plan that everyone can run with and give them routine. If you are struggling to agree what should happen with care of the children, consider getting some extra support and guidance from a specialist. Agree on a plan for telling the children together and avoid putting your children in the middle, by discussing adult issues with them, asking them questions or talking with other third parties in front of them. This places too much pressure on children who will likely want to make both parents happy. Attending a separating parent information programme early on can really help you understand the impact on your children, and to help frame the way you approach your separation.
3. Gathering information
It is useful from the outset to identify what you and your partner’s finances look like and how assets are owned. Identifying property, investments, bank accounts, life insurance, pensions, credit cards, loans, and any other assets or liabilities early in the process can help to prevent delays and issues further down the line. All of the assets and liabilities, especially those in joint names, will need to be dealt with as part of the separation. Start to request financial documentation such as pension valuations early on, as these can take some time to arrive, as well as obtaining valuations of any properties you own. Think about setting out a schedule providing an overview of your finances. This will be a helpful starting point for discussions about how the finances might be divided.
4. Your finances
Thinking about your respective needs and the needs of the family when it comes to housing, income and plans for the future is important and can take time. Consider interim arrangements and the associated costs if you plan to remain living together, or if one of you is going to stay with family or rent a property then how will the interim finances be met. Also, consider looking at longer term solutions for providing two homes. This might involve reviewing your mortgage capacities with a financial adviser and property prices. Some early research as to what you can afford can help shape discussions from the outset.
5. Support networks
Having the right people around you can ease the stresses and strains of the separation process. Not only is it important to have a good relationship with your trusted family and friends, the same can be said of your advisors. You need to be able to trust your advisors and feel supported by them, knowing that they understand your priorities and what you want to achieve from the process. If you don’t feel you have a support network you can turn to, consider a therapist or coach to help you navigate the emotional strain of your separation.
6. Early advice
Whether it be financial advice on how best to separate your assets, guidance on pension schemes or tax, think about what specialist involvement you need and when. If you are looking for guidance on arrangements for the children, consider speaking to an independent social worker or engaging in family therapy to help with the emotional issues arising from the separation. If your partner is being unreasonable, you are not sure on what your rights are, you would like some guidance about options for discussing your financial and child arrangements or if you have reached an agreement and would like to document this then it is sensible to speak to a solicitor. Early advice is often best and can help you map out a plan for navigating your separation.
7. Consider tax implications
Couples thinking of transferring assets between themselves as part of a wider agreement should consider the timing of those transfers. If married or in a civil partnership, taking action during the tax year of separation and considering the timing of any formal separation could be significant in terms of tax. Similarly, when thinking about what to do with an asset, thinking about the consequences of each option from a tax perspective will help inform a tax efficient way forward. Also consider the tax implications of moving out of the family home – by moving out of the property you often only then have a period of nine months before tax may become payable if you later sell or transfer the family home.
8. Reviewing your will
Considering what you would wish to happen with your assets should you pass away is an important decision and something that couples should re-consider on separation. Protecting assets for children, perhaps from a previous relationship, can be extremely important and requires consideration both immediately on separation and after a divorce or dissolution has been finalised. There are two ways to own property jointly, depending on which of these applies to you - then if you were to pass away your property can automatically transfer to the other – if you have separated, think about steps to change the ownership type to avoid your notional share of the property automatically passing to your ex-partner if this is not what you intended.
9. Formally separating
Unmarried couples do not need to formally separate, although some couples decide to enter into a formal separation agreement to record what they have agreed. Couples looking to formally separate who are married or in a civil partnership do need to engage in a formal process. Timing of a divorce or dissolution, as well as the information within the application is important and there is no one size fits all. Discussing this and agreeing how to approach the separation between you is important. The final stages should only be concluded after you have a court binding order in respect of the finances. Any agreement you reach about finances on divorce or dissolution is not binding until it has been documented and a judge has reviewed and approved the same. It is therefore very important that any agreement you reach is carefully documented and a solicitor can help you with this.
10. The future
Taking stock and looking at what you want from your future is important as well as planning for it. A divorce coach or therapist can help with the process and help you come up with a strategy and plan for moving forward. When it comes to a financial settlement, an independent financial adviser can help you plan to meet your financial objectives. If you meet a new partner and consider moving in together, a cohabitation or nuptial agreement can help keep your new relationship healthy by avoiding difficult financial discussions later by recording who will pay for certain things, and to protect assets either of you have brought to the relationship. Specialist early advice is key.