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Separation and divorce: the value of a financial checklist

If a relationship comes to an end, taking a few practical steps can help you regain confidence and control of your finances.

  1. Mortgage: the first thing to do is tell your lender about your separation – they will be able to talk you through your options. With a joint mortgage, you will both be liable for payments even if one of you moves out. Two common approaches are selling the house and agreeing on a split of the equity, or keeping the property and transferring ownership into one person’s name. Whoever takes this on will need to be able to afford the repayments, so will have their income assessed by the lender.
  2. Assets: dividing possessions can be tricky. If you are parting on good terms, the easiest way forward is to reach your own agreement. However, if you are in a complex situation or have valuable items, it can be helpful to seek mediation for support. By law, the person who bought the item can keep it, and if bought together the person who keeps it can buy out the other’s share.
  3. Joint financial responsibilities: making a list will help you both to consider how to repay any loans, credit cards and overdrafts and tackle life and contents insurance, utility bills and bank accounts. Call all of your providers as soon as you can to update them on your change of circumstances.
  4. Joint bank accounts: you’ll need to agree with your former partner how to deal with any joint accounts. Both of you are liable for any existing debt and for any increases. If you cannot agree on how to split any credit or debit balances then advise your bank. They will freeze the account and only act on instructions from both of you.
  5. Children: if you have children, they will be your highest priority. Be sure to consider both their immediate needs and how these will change as they grow older. If it’s possible, imagining different scenarios and discussing them in detail with your former partner can help to highlight any potential disagreements before they cause conflict.
  6. Will: as with any major change in life circumstances, it’s important to change your will after divorcing. If you had appointed your spouse as your executor and later divorced, this is automatically revoked. Divorce can also influence any arrangements you have set out regarding responsibility for your children’s trusts or guardianship.

YOUR NEXT STEPS

Revisiting your financial plans

A free personal financial review could help you assess your personal financial situation in more depth.

Further help and support

The Money Advice Service offers general guidance and support for divorcing couples.