Going through a relationship separation or divorce can be extremely traumatic. I am not sure there is any way to avoid the emotional turmoil particularly if children are involved, but there certainly are steps to take to avoid overwhelming financial stress.
One common theme I have seen with many women is the lack of understanding or control over their financial position. In particular, I find it surprising that many Mum's with businesses leave a lot of the financial and taxation side of things to their husband/partner. Whether you are happily married or not, if you run a business, you need to be in control of every aspect, including taxation.
Statistics tell us that 1 in 3 marriages will end in divorce. Whilst nobody really wants to think about this when getting married and let's hope its not you who will become another statistic, it is important to ensure that you are protected and well informed, regardless of what the future holds.
1. Have input into the family cashflow and understand what money is coming in and what money is going out and where and who is paying for what. A joint account as well as separate personal accounts works well for a lot of couples.
2. Have control over your personal taxes and make sure you personally see your accountant each year (whether it be with your spouse or at a separate time) rather than leaving your spouse to handle your affairs for you.
3. Understand your individual and joint assets and liabilities; what they are worth, what needs to be paid off and what other income you receive on a regular basis.
4. Understand you superannuation and insurance as well as that of your spouse.
5. Organise and File your important documents. For taxation purposes, as an individual, you are required to keep documentation for 5 years. File then all of your important documents - taxation as well as general household expenses, children expenditure, bank statements, superannuation and insurance by financial year.
Having a handle on your financial and taxation affairs on an ongoing basis prior to separation/divorce will make things easier.
I recently read a checklist for women facing divorce. One of the 10 recommendations was to Make A Plan prior to separation . I know what a lot of you might think, what? How macabre! But actually, it can be extremely empowering and calming and for those who have been through a separation or divorce, gaining some sort of inner strength is vital to be able to face what some describe as the worst experience of their lives. The other point made, was to keep this plan confidential; don't share it with your soon to be ex-spouse, if they don't use it against you, their lawyer will.
Once you separate:
You will need to retain copies of all those documents (point 5 above). Usually for couples, there is only 1 copy of jointly held items and these are filed in 1 place - so this obviously becomes problematic. It is vital you get a copy of everything and keep them in a safe place.
If you don't have a separate bank account just for yourself, open one up as soon as possible.
Seek legal advice. This can be costly, so seek the free advice first.
If you and your spouse have used the same accountant, this becomes a conflict of interest and the accountant will be unable to act for you both going forward. It seems that in more cases than not, it is the woman who finds a new accountant. This isn't necessarily a bad thing. If you can't continue with your current accountant, I suggest you seek recommendations from your lawyer or friends who have businesses.
Consider seeking advice from a financial planner.
If you have children, contact the Child Support Agency immediately. Child Support payments will be calculated only from the date you contact them, so the longer you leave it, the longer you are potentially out of pocket.
Contact Centrelink immediately and apply for any government benefits like the Family Tax Benefit, Child Care Benefit and Single Parenting Allowance. Separation and divorce, even in the most amicable cases, is expenses, so every extra dollar you are entitled to counts.
Remember that you don't have to go through this experience alone. There are many people out there who can help you - networking groups, your lawyer, your accountant. You need to surround yourself with good people providing you with sound advice and support.