The end of a relationship—whether sudden or over time—is one of the most difficult situations in life to navigate through. It’s riddled with emotions can range from intense hurt, to fears about the future, to regret about the past. Finding help and healing throughout the process is essential, as is developing a plan to deal with your divorce.
Start with a separation agreement
In most provinces and territories in Canada, separation agreements and court orders are used to resolve family matters when a couple initially separates. But these agreements and orders cannot legally end your marriage. For that you, you’ll need go through the divorce process. In simple cases—where you and your ex-partner agree on the conditions that dictate the end of your marriage—you’ll need to fill out and file a Family Court application. At that point it’s a matter of waiting for court cases to finalize what you both agree to and decide upon. (There are even simpler processes if you and your partner have an amicable, uncontested divorce. For example, Gail Vaz-Oxlade offers the CommonSense Divorce.) For more complicated matters, you will probably need to seek out the advice of a divorce lawyer—a barrister that specializes in family law.
Make a budget
The next task is to make your own budget. That’s because a divorce can wreak havoc on your savings. According to Darren Gingras, president of The Common Sense Divorce, the average Canadian divorce costs between $15,000 and $25,000. Also, with the end of your marriage comes the split of the household earnings. To create a budget, consider all the ways you currently spend money and write that down. Now examine this list for ways you can save. Perhaps you’ll need to start taking your lunch to work, or skipping that second latte each day, or maybe you need to cut the gym membership and start working out at home. The key to a solid financial footing after a divorce is learning to spend less than you earn—and to save for that rainy day.
Protect your credit
When confronted with a separation or divorce you’ll need to take steps to protect your credit score, explains Gail Vaz-Oxlade, TV personality and personal finance blogger. Make sure you cancel all jointly held credit cards that are under your name and freeze any lines of credit or joint accounts that could be liquidated without your knowledge. Request your current credit rating from the two biggest credit score tracking companies, Equifax and Transunion, and thoroughly analyze all entries on your credit rating. If you see any that are in error, or any credit card or loan that is jointly held by you and your ex-spouse, take steps to contact the bank or loan company to legally close these accounts.
Protect your assets
Quite often married couples will start their insurance and estate planning early on in their relationship. RRSPs, life insurance and other investments will list your spouse as the “named beneficiary”—meaning your partner gets this asset should something happen to you. But when you separate or get divorced you’ll need to rethink if you want your investments and any insurance money left to your ex-spouse. If you want to make changes, you’ll need to call your independent broker and your investment advisor and ask to change the beneficiary on each policy and account.
If you and your spouse had taken out joint life insurance—where both of you were insured under one policy—you will probably not be able to delete your spouse from the plan, at least not without his or her consent. If you both agree to the changes, you can approach your independent broker and ask to change the life insurance policy—from a joint policy to an individual policy, but you or your spouse may be required to undergo another medical check-up.
If only one of you was listed on the home insurance or the car policy, then that person is authorized to make changes. This can be problematic as your car coverage could be cancelled without your knowledge if your spouse is the policy holder.
That said, there are certain steps you should take when it comes to your insurance and your divorce. Once you or your partner moves out update your existing car insurance policy—either to remove them from the policy or to reflect the change in address and your new commute distance to work. Also, discuss what changes need to occur to update the tenant or homeowner’s insurance policy. To fully protect yourself, call your independent insurance broker and discuss what coverages need to be amended to reflect your separated or divorced status.
Find your team of professionals
Often divorce will mean lawyers and accountants, but those aren’t the only professionals you’ll meet and greet through this process. For David Batori, a Toronto real estate agent, roughly 20% of his business now comes from divorced couples.
Whether it’s finding new a new place to live, getting a new financial planner, or developing a relationship with an independent insurance broker, who can walk you through what you need to protect you and your assets. While it can be overwhelming the key is to keep it simple. Start by calling your insurance broker and asking him to review your car insurance due to your impending move, or ask what discount you could get on your home insurance if you were to start your own home-based business. Write down questions, keep a list of answers, and always refer to your contact list of professionals; these are people with expert knowledge in their specific fields and they can help you rebuild your life, your finances and develop solid fallback plans.
Don’t forget to ask for help
The final piece to the divorce puzzle is to find support. Thankfully, support can come in many forms: one-on-one gab sessions with a friend, confidential sessions with a therapist, or attendance at a support group that meets regularly to share their experience, strength and hope. Regardless of the form, finding support during this time of transition is essential. By creating a trusted place to go and talk, share and gain strength, you can find inspiration and get guidance through this difficult transition.
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