Setting the Stage for an Amicable Split.
No one makes the decision to spend the rest of their lives together only to separate. Yet unfortunately, not all relationships will last forever. If you decided to make a commitment to your partner and after giving it your all, it still didn’t work out, take heart. The reality is some relationships are not meant to be for a lifetime, and the most important thing to remember when leaving a relationship is to do it gracefully, to create space for mental, emotional, and financial healing to begin sooner rather than later. Read on for money conversations that can set the stage for an amicable split with your former partner.
Money Conversation 1 What is the state of our financial health as we prepare to separate?
Answer: If you were the person who managed the finances in the relationship, and you and your partner have decided to separate, the basis for an amicable split will have everything to do with financial transparency. Now is the time to create a family net worth statement, that lists assets like the family home and current values along with the value of TFSA, pensions, and RRSP values. The net worth statement should also list all individual debts you currently owe as a couple, such as mortgage and credit card debts. This document will form the basis of all future negotiations so if you forthcoming with providing this document to your ex, and you and your partner can discuss the health of your finances, it can go a long way in cultivating an amicable negotiation process. Your financial health should also include a cash flow statement that shows, each partner’s income- if applicable and current expenses and debt.
Money Conversation 2 – Who will be the primary caregiver of our children? Will custody be shared?
Answer: Custody arrangements between partners are often one of the most contentious issues partners will have to deal with when a relationship dissolves. Typically, the person doing most of the heavy when it comes to parenting is often the person chosen by the former couple to be the primary caregiver. The challenge is how each partner will be managing expenses as a single person. Talking about support can lead to conflict on who should pay for what on behalf of the child. Ask yourself what would it look like if you and your partner tackled this sensitive issue with the goal of looking out for the best interests of your children as the primary focus? You will want to think through how your ex will pay the bills and take care of the children when they are no longer living in the family home based on their financial situation. This may give you some insight into what level of support may be required by the courts. Questions to contemplate can range from after selling the family home does it make sense to rent or buy? Will we need to downsize if we want to live in the same neighbourhood to be close to the kids? Having a closer look at the cash flow statement may foster a more sober conversation about what it will mean to pay to raise a child in a single household.
Money Conversation 3 – What If I struggle talking about money with my ex-partner?
Answer: If you are struggling with having these conversations with your partner, get help. You don’t have to face having sensitive money conversations alone. Enlist the services of a collaborative law professional or certified financial professional to help you set the stage for an amicable split. Collaborative Law Professionals specialize in working with couples who want to separate without the drama by working together to come to a fair outcome for all parties involved. A certified financial professional can help you to draft and interpret financial statements such as net worth and cash flow statements if you are not feeling financially savvy and want help from a neutral third party to draft your numbers.
As a financial expert, a CFP can help you understand your financial situation. We can identify economic opportunities to reach goals you might not identify on your own. If you want to get started with a financial plan, book your complimentary 30-minute financial planning session with our team! We are here to help you on your financial journey as you build your financial fortune. www.askjackie.ca/contact-us