ONE: Don’t hand over control of your finances.
We get it, in most relationships there is one person that is better at money, or more organised, and gradually, over time, they are the ones that take over your family’s financials. And we’re not saying that you shouldn’t play to your strengths when it comes to sharing the mental load of life. But if your partner is the one paying the bills and keeping an eye on the accounts, make sure you are regularly checking in on things – for example, a monthly financial review together with a glass of wine might be a really good idea.
We’ve seen too many clients walk into our office not having any idea of their financial circumstances. Even worse, when clients thought their family was doing well financially and it turned out to be a house of cards built on credit and omissions.
TWO: Have a “get out of dodge” fund.
This doesn’t just mean to escape a relationship turned sour, but could also be an emergency fund if your car breaks down or you need to leave a toxic workplace. It will ultimately form part of the joint asset pool if your relationship does breakdown, but knowing you have a financial safety net can help you make good decisions and not panicked ones.
THREE: Paying for childcare is unavoidable.
And that’s either by paying a professional day care, or one of you staying at home with the kids.
And expect that if you separate, that the one that stayed at home with the kids will be compensated in terms of their “future needs” under the Family Law Act for any impact on their earning capacity while they took time out from the workforce.
FOUR: What you tolerate during the relationship may come back to haunt you when it ends.
And by this we mean those things about your partner that you find hard to cope with even while you’re in love.
For one couple that might mean that one partner wasn’t really employed or employable during the relationship – especially in a long relationship that partner will receive a portion of the joint asset pool based on their inability to work or have a similar income if you separate.
Another example might be drugs or alcohol – if you knowingly allow you partner to care for the kids now when they are over 0.05, it can be very hard to convince the Court later that you see it as a real issue in relation to future parenting arrangements.
FIVE: If your partner has their own business, especially if there is a potential for cash in hand income, be actively involved in that business.
Help with the books, go to the meeting with their accountant. Small business can be a funny thing and incomes can magically decrease when it comes time to divide the asset pool. If you have knowledge from experience of the earning capacity or value of the business, this can be become very important in the event of separation.
At the end of the day, the law is the law. And unfortunately, that often means that it seems inconsistent with what’s fair or what’s right.
