Jackie is back with Kavita Bhagat, Certified Family Law Specialist, to discuss trends in family law as we wrap up the love and money series for the month of Lovuary! In this episode of Live at 5 with the Financial Confidante, they talk about how couples are consciously uncoupling post pandemic and what the implications are on their finances. Turns out a lot of couples went their separate ways during the pandemic for so many different reasons. Let’s dive into the conversation.
There are so many issues that arise from being in a common law relationship that people do not even realize. It’s important to be aware of these loopholes in case the relationship we are in does not work in the future. Maybe getting a co-habitation agreement is what could potentially save you serious financial pain in the future. Remember that the law is the law and it is sometimes not fair. Consider protecting your assets when getting into a serious relationship instead of going into it blindly without consulting a family law specialist.
Was there any rhyme or reason as to why relationships ended during the pandemic?
As much as covid tested relationships to the max, it was not necessarily because of time spent but the time many people got to figure out what they wanted to do moving forward. Also, both genders got a chance to be involved in childcare even if it was circumstantial for some men who were now working from home because of lockdowns. Typically the high income earners who were typically male are now filing for shared parenting in separation, simply because they have more opportunity to continue to work remotely. That does not mean they are putting in the same amount of work as the primary caregiver, yet it will impact what they would be obligated to pay for child support. These nuances are amplified when immigrants are involved as there are sponsorship details that might be missed out and could cost one partner more, or cost the other partner access to additional monthly support at the point of separation.
What are some challenges you have seen over the last couple of years as people separate?
The biggest issue will be the lack of understanding of finances. Take for example, when a couple who owns a house together go their separate ways and one party decides to keep the home, they don’t realize that it affects their credit profile in the sense that child and family support is also being factored into their monthly obligations, while their assets are considered to be 50 percent less. This may lead the the lender to deem them unfit to continue financing the property on their own. Also, if they are a real estate investor, the investments they made as a couple are now being split in two as well, this causes a huge gap between what people think their financial situation will be after a separation vs what the reality is.
Separation tends to put a strain on co-parenting in the sense that, if one parent can barely afford to match their old lifestyle the children could potentially suffer and the second parent may
not be able to afford to live nearby. Parents just need to work together in most cases to salvage the situation from a financial standpoint to avoid huge losses. The most important thing is to consider getting a financial professional come to educate you on what is financially feasible for both parties and not let your emotions get the best of you as you negotiate the separation.
What advice do you gave for people going through a separation?
You must think of it as a business proposal! It is very important that you treat your separation process as a business transaction and consult the services of a financial planner, lawyer and accountant based on your situation so that you maximize the assets you and your partner can take with you as you leave the relationship. Build a team that can help you and do not leave anything to chance!
Are you going through a divorce? Talk to Kavita Bhagat on LinkedIn. If you need support on getting important financial questions answered we are happy to help! Pease reach out to firstname.lastname@example.org. Also, feel free to share your questions/experiences with us here or on our social platforms #valentines #separation #cohabitationagreements #askjackie