Separation and divorce are never easy. Aside from the emotional issues you will also have to think about how you will divide your property, bank accounts and other finances.
Before you start negotiating your financial settlement
Before you start discussing your financial settlement with your partner it is a good idea to do a few things on your own. This will help you understand what assets and other financial things are at stake and what you would like the result to be.
Review your finances
Write a list of all the financial assets and liabilities you have, either on your own or together. This may include your home, car, shares, jewellery, superannuation and anything else of value. You should also write down who you owe money to like your home loan, personal loans, credit cards, after pay purchases and even money borrowed from friends or family.
Have your assets independently valued
An independent valuation can tell you what your assets are worth. This can help you better assess what you need, what your bargaining chips are and what you think would be fair in your financial settlement.
If you cannot afford an independent valuation on your own, you and your partner may later agree to do one and share the cost to help you negotiate fairly.
Write down what you want your life to look like after divorce
Have a think about what you want your life to look like once you have finalised your divorce and financial settlement. Some questions to consider include:
- Where will you be living?
- How often will you have custody of your children?
- Who will be responsible for covering the costs of looking after your children, their schooling and other expenses?
- Where will your pets live?
- If you have a business together, who will be running it?
Understanding what you want your life to look like after divorce will help you frame how you negotiate with your partner. It is also helpful if you can think about what your partner may want their life to look like after divorce so you understand what points they may want to negotiate with you.
Consider your bargaining chips
Negotiating your financial settlement may require some give and take. Before you sit down with your partner, think about some possible options that you can offer them that may also help you get what you want. Some things to consider include:
- Would it be more beneficial to sell some property at a particular time?
- Can you structure how you split your superannuation better for tax purposes?
- Will it be better to transfer some assets into a family trust or company?
You may want to speak to an expert like a lawyer or accountant as they may have some ideas of how you can better structure your financial settlement that may be mutually beneficial.
If you have children with your partner they are not bargaining chips. How you share custody of your children may impact your financial settlement, like if there are child support payments involved, but they should not be used to negotiate with as this can create more emotional turmoil and may potentially impact your children as well. Your child custody arrangements should be a separate negotiation and agreement with your partner.
Understand your rights
Before you sit down with your partner to negotiate it is a good idea to speak to a lawyer. Our divorce lawyers can give you advice on what your rights are, what you may be entitled to in a financial settlement and what may be considered fair. This can then help you understand what you can ask your partner for in your negotiations.
Negotiating with your partner
When you start negotiating with your partner it can get emotional but it is helpful if you are able to remain as calm as possible. The steps below will give you the best chance of reaching a fair and amicable financial settlement. If you can agree on a financial settlement without needing to get the Court involved it will be easier, quicker and cheaper for both of you.
You will need to provide your partner with a list of all the valuable things you own like property, vehicles, shares and even superannuation. Your list should also include what you owe like home loans, credit cards and any other debts. They will also need to provide you with a list of their own.
The quicker you can both provide an open and honest inventory of your finances the better your chances of being able to reach a quick and amicable agreement.
Bring in experts if you need
You may need to bring in experts like an accountant, lawyer or independent valuer to help you identify all your assets and liabilities. An accountant or lawyer should also be able to help you understand if there are any tax implications to dividing or transferring your assets.
Discuss what you both need
While you will both be living your own life after you are divorced, you will need to discuss what you both need as part of your financial settlement. This will help you make decisions like:
- Whether you will sell the family home;
- Where your children will live;
- Who will be responsible for paying for your children’s schooling and other expenses; and
- If you run a business together, who will be responsible for the business and its expenses.
Find a fair middle ground
The objective of your financial settlement negotiation should be about reaching a middle ground that is fair to both of you. If either of you is unable to budge from your position it will most likely delay you reaching a settlement and could even result in the decision being left to a Court.
If you can not reach a decision speak to a lawyer
Our family lawyers have helped hundreds of couples reach a financial settlement and may be able to help you negotiate with your partner. We can sit beside you and help you negotiate with your partner and their lawyer informally. This can often be a very effective and inexpensive way to reach an agreement. We can also give you advice on what may be reasonable to ask for in a negotiation and what is not.
If you are not able to reach an agreement even with the help of lawyers, we can give you advice on what your options are and represent you in Court or with a mediator. We can help you find a mediator that is often significantly cheaper than going to Court. A mediator is an independent party who can help you reach a financial agreement without needing to go to Court.
If you do have to go to Court, it will involve a significant amount of paperwork and cost, including the need for full financial statements from both of you, independent valuations for your joint assets and other information.
Regardless of what happens, our experienced family lawyers will be by your side offering you advice and guidance with compassion and understanding to help you achieve a fair outcome. We will explain your options in plain English and even draw up the paperwork so that it’s watertight.