No one wants to think about getting divorced but it has become a sad fact of life – between a third and half of all marriages in Australia end in divorce.
Divorce can wreak havoc on your life and finances – even if the divorce is amicable – and the effect can be long-lasting.
If your marriage looks like it’s on its last legs there are a few important steps you should follow to limit the financial damage.
You need to have been separated for at least 12 months before you can apply for a divorce in Australia. Take that time to get your affairs in order.
Try to keep lines of communication open. You and your soon to be ex need to take the time to talk to each other about whether divorce is really the answer.
If yes, it’s actually a requirement to try to negotiate any splitting of assets yourselves before resorting to a court to make the decision for you.
You may want to talk among yourselves or get a solicitor involved, but either way consider all possible assets including the family home, any cars, savings, shares, valuable collections and superannuation.
You’ll also need to include liabilities including the mortgage, personal loans and credit card balance. Even if you do sort it out yourselves it’s a good idea not to sign anything before talking to your solicitor.
You generally have two options to make the agreement binding. You can file for a “consent order” with the Family Law Registry.
There’s no fee involved and the court must find the terms are “fair and equitable” before it approves them. The other option is to sign a “Binding Financial Agreement”. This does not need to be approved by a court but to be legally binding, both parties must receive independent legal and financial advice before signing.
If you can’t agree you’ll need to go to court but this should be a last resort. A protracted court battle will end up costing you a great deal of money.
Naturally things are more complicated when children are involved. Discuss how the children will divide their time between the two of you in general, including major holidays. You’ll also need to work out child support and how you’ll split the costs.
According to divorce.com.au the court will not grant a divorce unless proper arrangements have been made for the care and welfare of any children under the age of 18, so it’s important to reach an agreement before applying for divorce.
Once all these arrangements are in place, actually organising a divorce is fairly straightforward. You can download a divorce application from the Federal Magistrate’s Court website.
You must pay a $550 fee when you file it. It will take at least four months to obtain a final divorce certificate. After the divorce is finalised, make sure you draw up a new budget reflecting your new income and expenses.
You may be eligible for government benefits so consider a visit to Centrelink. Update your life insurance if you want the payout to go to someone else. The same goes for your will.