Uncoupling your finances

If you and your partner have been together for some time, separating your finances is not necessarily going to be easy.

However, it is absolutely vital that you can reach a financial settlement that is suitable for both parties. This is essential to the emotional wellbeing of all parties, particularly children.  You may no longer live together, but you are still their parents.

If you want your children to be able to invite you both to the graduation or the christening without worrying you will have a row, you are going to need a settlement that brings financial independence to you both.

This will take a lot of careful thought and planning.

One of the hardest parts of attaining an ideal settlement, acceptable to both parties, is fully understanding the financial challenges you and your former partner will face, and dividing the assets in a way that minimises financial risks to both of you.

Some of the questions you will need to consider:

• What is worth more, the family home or accrued pension and who will benefit most from each in the future?
• Is downsizing possible or even desirable?
• How, if at all, will the party who has stayed at home to look after the children – which was after all a joint decision – increase their earning capacity?
• How can both parties attain a living income?
• How can assets from the relationship be used to rebuild a non-working spouse’s state pension entitlement?

All these issues need to be explored fully, by both parties, looking at these challenges from the perspective of the other.  Of course, with emotions inevitably running so high, how many divorcing couples are even able to have the clarity of mind to see things this way?

What I would love to hear is if those of you have divorced or separated share with us how you went about making the right financial decisions?  If you are considering divorce, what aspect of financial uncoupling is worrying you most?

Your feedback would be really welcome, and would be totally confidential.

photo credit: flickr:divorce cake_DrJohnBullas