A breakup is tough enough without worrying about the financial complications that come along with it. While the idea of splitting up your finances can be daunting, sometimes ripping off the Band-Aid and tackling the issue is the way to go.
Corilee Blanchard, a Family Banking Relationship Manager at Prospera Credit Union, is here to explain the steps to a smooth financial separation.
- Separate your accounts
Start by separating joint accounts. Think – are there any other accounts at different financial institutions? Don’t forget about automatic payments or direct deposits synced with those accounts – you will need to change them, too.
- Deal with credit cards and other debt
Review any lending that is jointly held. If you have credit cards, car loans or other debt together, you will need to split them up and remove any co-applicant cards. Otherwise, you will be held responsible if your partner defaults on payments! Contact your financial institution for help to deal with this as soon as possible. Ask what steps must be taken for all debt to be reapproved in a single name. You may have to work with your ex to decide who is responsible for what. Each person will need to refinance the debt in his or her name only so that the other is no longer responsible for it.
- Update beneficiaries, pensions and extended benefits
Don’t forget to update beneficiaries on your TFSA’s, RRSP’s/RRIF’s and insurance policies. To get started, contact your financial institution or insurance company and discuss the specific policies that need attention.
- Chat with your Financial Advisor
Depending on length of the relationship, you may need to review your financial plan. Talk to your advisor about the impact of your breakup on your future retirement, and what it will mean to live off one CPP/OAS instead of two. This is a good time to set up a new budget that allows you to get out of any debt you may have and start working toward your financial goals.
Working closely with an advisor, such as Corilee at Prospera Credit Union, will give you the best chance to recover financially from a breakup and resume planning for your future. Prospera is there to make this hard situation a little bit easier. Visit prospera.ca for more information, or call 1-888-440-4480 to book an appointment.