N Avigating Financial Separation

Navigating a Financial Separation: Challenges and Strategies

Published: 24 October 2023

4 min read

Going through a relationship breakdown is one of life’s most challenging experiences. Even in cases where the separation is amicable, the emotional and financial toll can be overwhelming. This article dives into challenges and strategies to help you through a financial separation, highlighting the need for expert guidance and the importance of finding a suitable advisor to navigate these complex waters.

The emotional side is one thing, but anxiety relating to financial matters can bring about feelings of fear and uncertainty. Often one person in the relationship has let the other person run the family's finances. Now they face being in control of large amounts of money, property or even investments, with no experience in managing these things on their own.

How to Handle a Financial Separation

We've got your back. Just like a sherpa helps you climb a mountain, a trusted financial advisor and lawyer can assist you in navigating these complex financial matters. Here are 8 challenges you might experience during a financial separation, with solutions to solve them.

1. Financial Literacy Gap


Many individuals entering a financial separation haven’t had equal involvement in managing the household's finances or wealth, leading to a significant gap in financial literacy.


Knowledge is power. So it's essential for both parties to have a good understanding of your financial priorities, strategy and performance. Start by reading up on trusted money resources such as Moneysmart.gov.au , check out our guide to wealth for women , seek financial education online or through a friend or get in touch with a financial advisor who can explain key concepts and help you make informed decisions.

2. Asset Division and Property Settlement


Dividing assets and properties can be one of the most contentious aspects of a financial separation. “What happens when one partner owns the house?” “What is my wife/husband entitled to in a divorce?” These are common questions with complicated answers.


Engage with a legal expert who specialises in family law to navigate the intricacies of property division . They can help you understand your rights and responsibilities and work towards an equitable settlement, not just in terms of real estate, but any assets you may be entitled to a share of, including investments and superannuation.

3. Budgeting and Financial Planning


Adjusting to a new financial reality can be tough. Establishing separate budgets and financial plans can be overwhelming when accustomed to shared expenses and income.


Start with a budgeting tool to get an idea of your new financial comings and goings. Then seek the assistance of a financial planner to create a comprehensive budget and financial plan tailored to your personal circumstances. This plan can help you manage expenses, set goals and save for the future.

4. Child Support and Parenting


Determining child support and parenting arrangements can be emotionally charged and calculating the appropriate amount of child support can be complex.


Consult with a family lawyer to ensure that child support and parenting agreements comply with local laws and are fair to both parties. Family lawyers can also help mediate and establish reasonable terms, without the need for expensive court action.

5. Debt Division


Splitting shared debts, such as mortgages, loans or credit card balances can be problematic, as creditors may hold both individuals responsible.


Consult with a mortgage broker to establish a plan for handling joint debts. This may involve refinancing your home loan , negotiating with creditors, or determining each party's responsibility.

6. Insurance Review


One common challenge in insurance following a financial separation is failing to update insurance policies to reflect divided assets, reduced income and new debt, leaving beneficiaries and assets vulnerable.


Many insurance brokers offer a complimentary review of your existing insurance which is a great place to start. You can also work with a life insurance advisor to update life insurance coverage and other relevant documents to ensure that your wishes are reflected accurately and beneficiaries are updated to match your new circumstances post-separation.

7. Estate Planning


It can be stressful determining how to fairly distribute assets and benefits to dependents, especially when the previous financial arrangement may have involved shared resources. Failing to update your will can see assets going to unintended family members or wealth left vulnerable.


Work with an experienced estate planner who can help you update your will, trusts, and beneficiaries to reflect your new financial situation. This will clearly outline your intentions for asset distribution in legal documents to avoid disputes. You can also consider establishing a trust or incorporating specific clauses in your will that protect your intended beneficiaries' interests. Don’t forget to regularly review and update your estate plan to adapt to any changes in your financial situation or family circumstances.

8. Mediation and Alternative Dispute Resolution


In some cases, disputes may escalate, making it difficult to reach agreements. This can lead to prolonged legal battles and increased costs.


Explore mediation and alternative dispute resolution methods. These can help both parties come to mutually acceptable solutions without the need for lengthy and costly litigation.

Secure Your Future with Advice Around Financial Separation

Often, in the case of a relationship breakdown, a multidisciplinary firm is a smart choice to streamline the process and develop a trusted team around you to support you through the tough times. Working with experienced advisors that can provide a collaborative and holistic solution for you to sort your tax , finance , private wealth , investments and personal insurance all under the same roof can be a reassuring solution to help make the transition to an independent life less overwhelming.

At BlueRock, we're here to guide you with expertise and empathy, empowering you to make informed decisions that secure your future and protect your assets. It's not just about numbers; it's your first step towards a brighter, financially stable tomorrow. Get in touch and we'll connect you with a whole team of advisors tailored to your unique needs.

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