Anna Kelsey-Sugg* says tens of thousands of Australian relationships break up every year and, as well as the emotional costs, the financial consequences can be huge.
In the midst of separating from her partner of 10 years, Jude would wake in the night, terrified about becoming financially ruined.
She’d spent years trying to establish herself as a writer and had finally started to make a good income.
Now all that was under threat — along with the home she lived in.
The financial fear led to panic attacks.
“It was the most traumatic thing I’ve lived through,” she says.
Jude’s stress was exacerbated by a legal process she describes as a “horrible game” — one that cost her thousands of dollars.
Tens of thousands of Australians break up every year.
The emotional costs are huge: pain, stress, instability.
But, as Jude discovered, there are often heavy financial consequences as well.
Determining assets ‘intrusive’ and ‘humiliating’
Jude says she was “completely blindsided” by the way her ex went after her money.
He hired a lawyer and pursued a percentage of her earnings, including her future assets — projected royalties from her books over the next decade.
“I thought he was joking,” she says.
“Obviously, we split everything accumulated in our relationship — but future royalties?”
“That’s a pretty big call.”
But it wasn’t a joke.
The projected amount of money she would earn over the next 10 years became an asset and was added to an asset pool.
Her ex-partner was then legally entitled to half of that.
Determining future assets involved a forensic accountant interviewing her publisher and her agent about her income.
“It was really intrusive … and also humiliating,” she says.
Separating without a plan
When Carly’s marriage broke down suddenly and unexpectedly, she also developed anxiety, as well as insomnia.
The repercussions of her separation were far-reaching.
“It impacted on my ability to parent, it impacted on all my roles in my life,” she says.
The worry about her finances was equally as burdensome.
Carly was the primary carer of her small child and working part-time, while her partner was earning more than double her income.
“The financial side of things — I can’t even put into words how stressful and how all-consuming it was,” she says.
She wondered how she would afford to live.
Like many, she didn’t have a plan for what would happen if she and her partner split up.
“You don’t enter into a relationship planning for it to end,” she says.
‘Haemorrhaging’ money
Carly’s legal fees amounted to $10,000, but that wasn’t the only financial blow.
She was surprised to learn just how intermingled her and her husband’s finances actually were.
“I became aware that not only are our assets shared but so are our debts, our super, our HECS debts — all of a sudden I was facing my partner’s $50,000 HECS debt,” she says.
“At the same time, my super was also significantly less because I’d worked less.”
“It was a very, very overwhelming time and the only reason I got through it was because I had the support of my family.”
“Financially I wouldn’t have been able to afford it otherwise.”
Jude outlaid even more money in separating from her partner.
“I was haemorrhaging money,” she says, adding that the biggest cost was legal fees.
“I don’t know exactly what I would’ve paid over that period, but it was tens of thousands of dollars.”
Both women were able to avoid going to court, which would have exacerbated their costs significantly.
Family law specialist Scott Wedgwood says the litigious pathway, specifically the period of time between filing an application and being allocated a court hearing, lasts about three years.
It can take another six to 12 months to receive a judgement.
“That protracted period is one of immense pressure — emotional pressure and of course financial costs beyond the emotional costs,” he said.
The costs often start at around $20,000, he says, and they only go up from there.
“For difficult … matters, we can certainly be talking hundreds of thousands of dollars,” Mr Wedgwood says.
He says people going through separation need to take a commercial and pragmatic approach.
“Quite often I’ll hear people early in proceedings talk about ‘the principle’,” he says.
“That’s often cured by them receiving accounts and starting to understand that they are no longer sharing their wealth with just their partner or children, but they are starting to divide it four ways with a couple of lawyers as well.”
‘Don’t do anything spiteful’
Family lawyer Rebekah Mannering says separation can be easier — and less expensive — if both parties act in good faith.
“The most important thing is to really keep a level head,” she says.
“Don’t do anything particularly spiteful or irrational because that’s not going to help things.”
Though it was tough, maintaining a functional relationship with her ex-partner was a priority for Carly.
“Our relationship was incredibly tarnished through the separation and the divorce, but we agreed to try and keep it together for our daughter,” she says.
“Regardless of our situation, I wanted us to maintain some sense of ability to carry on and co-parent no matter what.”
“I didn’t want it to be a fight down to the last dollar.”
Driven by a desire to end the separation process as soon as possible, Carly and her ex-husband were able to quickly and amicably agree on the division of their assets.
For Jude, reaching that agreement was more difficult — in part, she says, due to her ex-partner’s approach.
“When someone’s hurting and very wounded — because I instigated the separation — that can transform into fear,” she says.
“I’d taken everything from him, in his mind.”
“I felt like he felt backed into the corner.”
She soon accepted that extrication from her relationship was more valuable than her assets.
A high-profile writer who’d experienced separation advised her to do whatever she needed to get back to writing.
“He said, just walk away … with your imagination, they can’t take that from you,” she says.
“So I did. I just … walked away with nothing.”
“I handed the house over to him [but] what I did take with me was my freedom.”
Names have been changed for privacy reasons.
* Anna Kelsey-Sugg is a digital producer with the ABC in Melbourne.
This article first appeared at www.abc.net.au.
