Deciding to separate – things to consider…
Deciding to separate from a partner is a significant step to take for most people. As well as making the most urgent decisions about who is going to live where, who will pay for what and who will spend time with the children – there are a number of additional matters which might need your prompt attention and which are not always immediately obvious. The financial decision to separate your finances may take some time and patience to resolve with your former partner but there are some steps that you can take to protect your position in the meantime.
If you share a joint bank account with your former partner you will need to consider how this account is used and who will need access to the funds in that account. Whilst the account remains in your joint names you will generally both be liable to pay back any overdraft on the account. Due to the joint and several liability clauses on most bank accounts even if your former partner overdraws this account spending all of the money on themselves you will both be liable to pay back the full balance to the bank. Legally there is no rule that you are responsible for half each when repaying an overdraft on a joint account. The bank could pursue either of you for all or part of the amount owed.
Ideally, any joint account should be closed as soon as practicable to limit any ongoing liability each of you may have for the other person’s debt. Where this is not practical it is recommended that you should reach a clear agreement between you as to what each of you can draw from the account pending reaching an overall settlement.
In circumstances where your partner will not consent to the closing of a joint account, and you are anxious as to what steps they may take which might affect you financially, it is a good idea to speak to your bank to explain the position. In some circumstances the bank will agree to “freeze” the account until a formal agreement is reached. This usually means that the account cannot be used by either of you and this can be useful to prevent one party from drawing out funds or making an overdraft worse.
If you have savings in joint names you need to be clear as to who can draw out the funds. If you are not sure check with your bank to find out if both of you need to sign for any withdrawals or if one of you may do so alone. If only one signature is required (as is the case with most joint bank accounts), either of you could withdraw all of the money in the account without the other’s further agreement. You may agree to leave the funds in a joint account if there is a good level of trust between you and you agree that these funds should not be removed by either of you without the other’s prior consent. If you need access to the funds agreeing with your former partner the withdrawal from these funds in advance is usually the best option to avoid conflict, even if legally you can remove funds from the account without that consent.
When one partner moves out of the family home they need to consider if their name is on any of the bills for the family home. An agreement will need to be reached as to who is paying the outgoings on the family home pending any long-term financial settlement. If it is agreed that the partner remaining in the family home will be responsible for the outgoings, the bills will need to be transferred into that partner’s sole name with the water, gas and electricity provider.
The person(s) who signed the initial agreement with the supplier will remain legally responsible to discharge the bill in contract, even if they no longer live in the property. If the bills are to be transferred to the remaining partner’s sole name this is usually easily achieved by giving notice to the utility supplier to terminate your agreement with them and the remaining partner can then take over responsibility for the bills.
This can apply to gas, electricity, telephone, broadband, television and cable services as well as a TV licence, repair and maintenance contracts, subscriptions and payments for the buildings and contents insurance. It can also affect payments for the mortgage and any additional payments such as life insurance or endowment policy payments. We recommend that you go through the statements for your credit card and bank accounts to identify payments that may need to be transferred.
Where your separation means that one former partner remains living in the family home as the only adult they may also be able to claim a discount on their council tax bill.
When one party moves out of the family home each former partner will then usually be considered by the Benefits Agency as living in separate households and as a result, they will then be assessed separately for any entitlement to state benefits. In some circumstances, this may result in one or both parties’ entitlement to benefits changing and we recommend that this is a good time to reassess your potential entitlement to state benefits and to make any claims as soon as possible as these are often not backdated.
If the children of the family are living with you after separation hopefully, it will be possible for you to reach agreement with your former partner as to the amount of maintenance they will pay to help support the children. Jurisdiction to determine what maintenance a parent should pay in financial support would usually be determined by the Child Maintenance Service (CMS), by reference to their gross annual income, the number of children and the number of nights they spend with the non primary carer. There is an online assessment calculator which is available for everyone to use to allow a calculation of liability to be carried out and the use of this can assist in agreement being reached. If not an application to the CMS can be made and they will then carry out any necessary assessment. Further details on this issue can be found elsewhere on this website.
If any relevant child maintenance provision has been determined and the financial provision for the spouse who has primary care of the children is still insufficient for them to meet their reasonable outgoings, it is possible in some circumstances for them to make a claim for maintenance for themselves against the other spouse. This is only possible however when the parties have been married. No right of maintenance arises if the former partners were not married (save in relation to child maintenance above).
A claim for spousal maintenance will only be successful if the spouse applying can show a clear need for the additional support, that they are mitigating their claim by claiming any benefits or making use of their own earning capacity, if any, and if the spouse being asked to pay can afford to do so. Spousal maintenance is a balance between the amount one spouse may reasonably need and the amount the other can reasonably afford to pay.
If you own property jointly with your former partner you will need to establish if you hold the property as ‘joint tenants’ or as ‘tenants in common’. We can quickly undertake a search at the land registry for you if you are not sure on this point to confirm the position.
If you hold the property as tenants in common in the event of your death your interest in the property will not automatically pass to your former partner. In these circumstances your interest in the property would pass in accordance with the terms in your will or if you have not made a will under the intestacy rules to your next of kin. If, however, you are still married to your former partner they will usually still be your next of kin and may still inherit through entitlement under the intestacy rules. We recommend in those circumstances that you make a will, setting out who you would want to inherit your interest in the joint property on your death.
If you hold the property as joint tenants, your interest will automatically pass to your co-owner in the event of your death. This is how the majority of couples who purchase property will hold their interest in the property. If you do not want your former partner to inherit your share of the property it is possible to ‘sever the joint tenancy’ to make it a tenancy in common. Your share can then pass by way of your will or the intestacy rules. You will also need to make a new will if you are still married to your former partner.
Severing the joint tenancy to make it a tenancy in common is straightforward. It involves serving a short notice on your co-owner(s) and then registering your severance notice at the Land Registry.
If you have lived with your former partner in a property owned in their sole name and you are concerned that they may sell this property once you separate it is possible for you to register a notice against the property if you have been married during your occupation of the property. This notice in practice makes it difficult for the property to be sold without you becoming aware as it protects your right to occupy the property whilst you are still married. This is a simple process that requires you to file an application form at the land registry. The land registry will then send a notice to the owner of the property advising them that the rights have been protected. This notice will usually last until the divorce is finalised.
When you separate it is important that you review your will. You will need to consider whether, due to your change in circumstances, the will you have in place now still meets what you would wish to happen in the event of your death. If you do not have a will in place your estate would be dealt with under the intestacy rules and for most estates this would mean that the majority if not all of the assets would pass to the deceased partner’s next of kin. If you are still married this will often mean that your estranged spouse will still benefit. We recommend therefore that you remake your will or write one as soon as possible after you separate to ensure that your estate passes to the beneficiaries whom you choose.
If you have children you are also able to specify who you would wish to be a guardian for your children in the event of your death, although this would not usually come into force whilst the children’s other parent is still living.
Change of Name
If you wish to change your name when you separate you can legally do so simply by using your new name. Many organisations however require evidence of your change of name before they will amend your details on bank accounts, passports, insurance policies etc. We can prepare a change of name deed for you as evidence of your change of name should you need this. This is a straightforward process.
Talk to Tollers
If you are considering separation and would like further advice… Talk to tollers on 01604 258558, our experienced family team is on hand to guide you through and facilitate you.