We like to keep our topics focused on building your future and growing your finances. But sometimes things fall apart. Relationships break down and you need to figure out how to divide what you’ve built together. If you find yourself needing to separate finances after a breakup, here are some of the financial aspects you will need to get in order. Working with a professional will ensure all your bases are covered.
Who gets the house?
If you own it, you will likely be contacting a professional to split it. If you’re renting, whose name is on the lease, and can it easily be changed?
Whoever is moving will need to make sure that their address is updated. Use the Government’s website to change your address with the main regulatory agencies.
Also, update Your address with:
- Your bank and credit card company
- Investment Accounts
- Insurance Policies – life, health, house, car
- Loans or debt accounts
- Service accounts you hold (i.e. cellphone, hydro)
- Regulatory agencies you report to
- Your employer
How do you separate finances after a breakup?
You have a few options.
If you had a joint bank account, remove one of the names after splitting the funds. Make sure that all automatic withdrawals or deposits coming from the partner who was removed have been redirected.
Otherwise, you can each open your own chequing account and move your automatic deposits and withdrawals there. We suggest leaving your joint chequing account open for a few weeks until you’re sure you haven’t missed anything.
Now, take inventory of your new financial picture. Create your OWN budget and goals to start strong in this new chapter of life.
If you have investments, decide which ones need to be split (if a lawyer is involved, they will advise). Remember to change the beneficiary on your RRSPs and TFSAs.
To avoid trouble down the road, keep some form of paper trail on what you’ve decided together. If you’re working with a lawyer, they will likely do this for you. If it was a verbal agreement, consider sending an email or screenshot a text message between the two of you, of your agreement.
The only constant in life is death and taxes.
Take inventory of your bills. Change the account holder of any household bills to the person staying in the home. Separate the accounts that you’ve been sharing together – like family phone plans and gym memberships.
Be sure to update the beneficiary (unless required for a loan, children, etc.) on your individual and employee group life insurance policies. It is best to make your beneficiary an actual person, instead of your estate, unless advised otherwise by your lawyer.
If you have health coverage, either remove the ex-partner or talk with your provider about a continuation of benefit coverage or other options available.
The partner being removed, if applicable, should still submit all receipts for services incurred before the separation to get the reimbursement they are entitled to.
If you are working with a lawyer, they will guide you through the process of separating finances after a breakup. They can advise regarding beneficiary changes and agreements you need to make. This list is not exhaustive and there are many more details to work out.
Sending you strength through this difficult time ❤