It’s an emotional time when relationships come to an end. Add the stress of working through who get’s what and most of us would feel like crawling into a cave.

Emotional stress aside, divorce or break-ups can be time-consuming and expensive. Sharing children, assets and debts can be complicated legally and financially. Whether you were married or living common-law, your relationship likely linked you financially.

That link will now need to be undone so you can move forward. Here’s what to do to consciously uncouple your finances:

1. List your assets and debts

Make a list of your family assets and debt including those owned by only one of you and be sure to include those items owned before the start of your relationship as well.

You may think that if a court of law decides who pays for debt you’re off the hook if the court hasn’t named you. But in reality, some creditors still demand payment from a co-signer. This can become a particularly sticky issue if your partner decides to file for bankruptcy.

2. Overhaul your budget

Now that you’re living as a single person, your monthly income and expenses are likely to change. Sometimes dramatically. A new budget will help you understand the financial issues you face and can sometimes help towards negotiating a fair settlement with your ex.

If you’re unfamiliar with how to budget, check out this cash flow calculator to crunch the numbers. It may not be possible, but try to agree on how to split the debt and assets before going to a lawyer. This type of planning will serve you both well as you may spend less on legal fees.

Financial institutions typically “freeze” joint accounts if they believe assets are going to be disputed. Therefore, try to get a separation agreement in place as soon as you can to minimize financial disruption. When you have an overview of the entire financial picture, it’s time to consult a legal professional.

3. Don’t forget to change beneficiaries

Make sure you review and update your will, insurance policies, RRSPs and other legal documents if necessary. While divorce or termination of common-law relationships eliminates gifts to a spouse/common-law partner in a will, your beneficiary for  TFSAs, RRSPs, RRIFs, etc., need to be changed individually.

4. New life & new accounts

Surround yourself with family and friends and remember to open new bank and credit card accounts in your own name. Depending on your financial situation you might need to work on building your own credit history to qualify for loans or credit cards.

And now for a fun disclaimer:

This blog post provides general information only, and does not constitute financial, accounting, tax, legal or other professional advice. We encourage you to obtain personalized advice from qualified professionals regarding your particular circumstances. Please see our Terms of Use.