Financial

Short term plan

'The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.'
Martin Luther King Junior

The best way forward when planning finances
The best way to move forward is to ensure that communication remains open between you and your spouse if at all possible. Even if hurtful and spiteful things may have been said, tempers may calm with a little time and talking may become an option once more. This could save the whole family unnecessary expense and distress.

Things said in anger
'Contact me through my solicitor!' may be stated in a rage but there comes a time when the waters have calmed and discussion is more fruitful than costly solicitors' letters. This of course does not mean that you should not consult a solicitor and maintain contact with him.

When there are children
Talking is also necessary if there are any children involved. Any small consideration for each other will make this painful journey easier for all concerned; for you, your spouse, any children, parents, siblings, other family and friends.

Saying sorry
'I'm sorry, I shouldn't have said those things. May we talk?'
This may be difficult to say and you may have to say it to each other repeatedly but it may be the best course of action and could lead to mediation which is discussed later In this section.

The family's day to day living
Despite how wretched either one or both of you may feel, (although it may seem that one of you is hurting the most, it is in most cases very painful to all concerned) day to day living has to be organised and the family's financial situation has to be preserved.

In order to prepare the way for a settlement to be discussed, some short term plan should be agreed. It may be useful to consider the following issues:

The family home
This is discussed in more detail further on In this section but your immediate concern should be the mortgage or the rent. If there are children, they normally stay in the home with their mother and if the husband is the main earner, attention should be focussed on continuing this payment together with any associated policies. Even if tempers have flared, the family home may be the main asset and should be protected. When emotions are running high, any threat regarding the sale of the property at this early stage could be counterproductive. Your aim is not to decide on a final outcome at this early stage, but to keep the family stable on level ground so that future discussions may take place. But if you are unable to keep up the payments, you should always write to the mortgage company or your landlord at the earliest possible time. (Debt is discussed in detail later In this section).

One thing which frequently upsets the one left in the family home is the term 'ex matrimonial home.' Although it seems to infer that the home no longer belongs to the family, it is only a legal term used when you are not living together at the property.

What if the property is in my spouse's name only?
If the family property is in the sole name of the other spouse, this can be altered by registering it in your name and you should also draw your solicitor's attention to this asap. If there is any other property owned by your spouse, then steps can be taken to prevent it being sold before a settlement is agreed if you can show that this may harm your claim. When the property is in your joint names and you wish to safeguard your half should anything happen to you whilst the divorce process continues, you can ask your solicitor to arrange this. This means that should you die, your share in the property would form part of your estate. Your solicitor will advise you but you should consider whether this action would be seen as inflammatory particularly when children are involved. You should also bear in mind that the courts have full powers to allocate property as they see fit in divorce.

Spending
Care should also be taken to provide for the family's immediate needs. If at all possible, it may be wise to allocate the same amount of family income, or as near as possible, to meet the normal spending pattern. Although you may consider that one less person in the household would automatically reduce the outgoings, this is not generally the case. The cancellation of any payments or planned expenditure, unless major, without any prior discussion or notification, often results in avoidable distress. This distress could then lead to a lack of trust and fear, which in turn may only serve to lead to lengthy negotiations. Fear is a powerful negative emotion whether it is real or imagined.

Child contact problems
Another consequence of this type of behaviour could be problems relating to contact with any children. Emotions, the legal process, finances, children and health are all interwoven and any problem in one or more of these areas will undoubtedly have a knock-on effect on the others. You may wish to take control at this stage, but reasonable behaviour is best. Although you may have come to terms with the breakdown of your marriage and you may think that your spouse has too, it is generally the case that one of you is much further down the road than the other on this divorce journey.

Overspending
The one thing which causes bad feeling and resentment is overspending. It is so thoughtless to restrict your spouse to a much lower budget and argue that money is in short supply when you are seen to be enjoying a spending spree. Even if you think that this is done in secret, you may be brought to task when you have to explain your accounts in court. On the other hand, it is thoughtless to attempt to punish the other by spending on credit cards when you know that this has to be paid for at a later date. Again, the best action is reasonable action.

Who controls the bank accounts?
It is worthwhile giving some thought to your banking arrangements particularly if you fear that large sums of money may be taken from a bank or building society or that charges could be made to joint credit card or store accounts. In fact, all options should be considered as your family's financial position should be safeguarded particularly when there are debts.
Where accounts are in joint names, you are both jointly liable even after you separate and it may be prudent to change accounts to sole names or to agree with your bank to only allow certain sums to be drawn when both of you sign. Another option is to reduce the spending limit on credit cards or arrange for your spouse to have a new one.
Freezing accounts is also an option to be discussed with your solicitor. When family Trusts are involved, you should seek expert advice either through your solicitor or your financial adviser but you should make your solicitor aware of the situation.

Tax, insurance, benefits and tax credits
As soon as you separate, you will be considered as separate individuals by the Inland Revenue. It is best to keep them informed. If there is only one adult in the household, you may apply to your local council for a 25% reduction in your council tax. You should try yur very best to pay this as councils are generally quick to chase their debts.
You should also ensure that all insurance and endowment policies are paid regularly. You may think that it is a good idea to cut costs but this may prove to be an expensive mistake.
Try to keep everything ticking over as normal as possible as you both readjust to your new circumstances. You may be entitled to state benefits if you are now on a low income or tax credits. If you are already receiving tax credits, you should keep them informed of a change in your living and financial arrangements.
Please refer to our Housing and benefits article In this section. It would be a good idea to mention benefits to your solicitor before claiming as when children are involved, the CSA/CMEC automatically enters the scenario when you are receiving certain benefits. This could therefore affect any claim made through the court.

Next step
The next step is to gather information about your financial circumstances and to draw up a balance sheet of your income and expenditure, your assets and debts. The sooner you tackle this the better. Read further In this section for more details and an example of a balance sheet to help you keep on track.
In the meantime, it may be prudent to try to make economies. There are now going to be two households to support with less money than there was previously in the one. But your main concern, and that of the court, should be any children.
You may want to refer back to the Parents' section for ideas about coping with children under these new and difficult circumstances. There is a separate section for Children and a large one just for Teenagers.

Remember the children's feelings
While you may be arguing over finances and legalities, who said what and when, please try to remember that your children will be hurting too, regardless of their age and understanding and irrespective of what they say to you or others. Perhaps you could have a look at the Children's section with them. Teenagers may well want to read in private but would welcome your reassurance that you know they are hurting too. Even if they say they are fine and seem to be coping, this could be a smoke screen. In these sections, there are people you can all talk to, websites linked and groups you can join. Have a look in the Books section for age-related books for children and, of course, for yourselves. You do not have to go through this alone. There are always people ready and willing to help you.

Whatever the reasons for this split
Whatever the reasons for this split and whoever is to blame, children should not be party to all the details. No matter how aggrieved or fearful you may be feeling, you must both try to co-operate for their sake and, at the same time, realise that conflict about finances will inevitably have a knock-on detrimental effect on your relationship with the children and their general well-being. It is generally understood that a mother (or father) with care, will do her utmost to provide for her children to the detriment of herself. Children come first. You may see your spouse as money-grabbing but on the whole a mother or father with care is ultimately concentrating on the needs of the children.

When trust breaks down
When the trust disappears, a parent caring for children cannot imagine that you would put their needs first and is therefore determined to try and safeguard their financial future. Whether this fear is real or imagined, you may do well to try and understand it.

See everything through the eyes of your child. This may be the best advice you will ever receive. If you do not have children, then try to imagine you are looking at the situation through the eyes of someone you love and respect. Try to stay away from the ugly people with their ugly advice. Look for the professional experts when needed and the gentle people. Counselling may be worthwhile too. It is good to be heard and understood. You are not alone.

'Heaven never helps the individual who will not act.'
Sophocles



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