Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 594

Navigating broken relationships and untangling assets

Relationship breakdowns can be emotionally challenging, particularly during the holiday season. As an accounting partner and a family law specialist, we’ve both seen when emotions can cloud judgment and make it difficult to approach asset protection, and if required, a division. The holiday season can make this harder, but it’s a sad fact that for many couples, this is the period when it’s finally time to let go and separate your lives and assets.

So here are some pointers on how to do just that, calmly and rationally through a separation process.

The most difficult aspect: letting go

Shared possessions often carry memories—both good and bad—which can make it hard to lose, or even keep, certain items. People can make decisions which make no financial sense. The cost of settling some disputes is disproportionate to the value of the issue or asset, so advice about when to let go can save you angst and cost.

Important decisions have to be made at this time. Approaching this task with your accountant helps to ensure that the overall impact of your decisions is clear to you: they can help ‘light up’ options to deal with these issues and help you understand what each might mean for you.

The first step

To begin the process, a comprehensive inventory of everything acquired during the relationship (including assets and debts) must be taken. This includes:

  1. Physical assets: Real estate, vehicles, furniture, and personal belongings.
  2. Financial assets: Bank accounts, investments, and superannuation accounts.
  3. Intangible assets: business interests.

This helps provide a clearer picture of the ‘asset pool’ i.e. what needs to be kept or divided – and it’s a critical step. Some people are very clear on what assets they have; others aren’t. But couples have a legal duty to exchange financial information, so transparency during this process is crucial and mandatory. Hidden assets can lead to complications, delays, protracted disputes and cost orders against parties who fail to honour their duty – even if it is an oversight.

This is why it’s important to maintain thorough records of all individual and shared financial dealings including assets, income, expenses and debts. These can be vital in ensuring a fair division and may be relied on if disputes arise.

Involving your accountant here is also important. They can help you provide information quickly and effectively. They can clarify ownership where different structures are involved and may already have structure charts that identify your financial assets. A shared early understanding of your assets saves you time and cost.

And it’s critical to consider the difference between the market value of assets versus the emotional value. The costs involved in ‘winning’ assets with great emotional value can be considerable, so some perspective is important. Accountants can help clients to make this assessment.

Have a strategy around dividing assets

Sometimes, the traditional division of assets may not be practical, and people need to consider alternatives such as trading assets or cash settlements. This is where a financial strategy meeting with your advisors can be hugely valuable. They can provide advice about which assets you actually do need for your lifestyle and future financial needs and recommend the most favourable pathway to minimise the impost of tax and other fees to your family and you.

Think through your legal position

When assets are involved, consulting a legal professional is necessary. Laws regarding asset division in Australia are applied with considerable discretion.

Understanding your rights after a relationship is crucial and you should get specialist advice early, so you know where you stand. Family law also looks at businesses, trusts and partnerships, as well as personal and other interests.

Couples and their families are unique and so you need to get advice about your particular circumstances. Further, the Commonwealth Parliament has just passed new laws for property settlement which come into effect from 10 June 2025.

A lawyer can help mitigate emotional stress by providing objective guidance before, during and at negotiations.

Consider mediation

Discussions about finances can be tricky if it’s already hard to talk. Trust your judgement. If you feel conversations might be become contentious or unproductive, consider involving a mediator sooner rather than later. This can help ensure everyone stays on track, respectful and heard. It’s important that everyone remembers the intention is to find a resolution through a respectful conversation that allows both parties to move on. An accredited mediator can provide structure and help both parties reach an amicable agreement.

Protect yourself in other ways

Family law property settlements often occur in an emotional context. It’s important to recognise that the parties to a separation are making big financial decisions in the midst of emotional upheaval. It’s essential to make fully informed decisions, rather than decisions based on emotion alone.

Feelings of anxiety, distress or just being overwhelmed are commonplace, but that does not make them easier to manage or safe to ignore. If you are feeling overwhelmed by the separation, then talk a health professional, like your doctor. It is difficult to make wise choices and decisions if you are unwell. Take care of your health at this time when you are making big decisions.

 

Danielle Hart, CPA is an Associate Director at Marin Accountants, and Jane Koelmeyer, BA LLB is Principal of Jane Koelmeyer Family Law & Mediation. This article is for general information only. It does not consider any of your personal objectives, financial situation or needs. Before taking any action, you should seek appropriate professional advice.

 

RELATED ARTICLES

Where Baby Boomer wealth will end up

Five charts show predicaments facing financial advice

Eight steps to expect when seeking financial advice

banner

Most viewed in recent weeks

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

Retirement income expectations hit new highs

Younger Australians think they’ll need $100k a year in retirement - nearly double what current retirees spend. Expectations are rising fast, but are they realistic or just another case of lifestyle inflation?

Welcome to Firstlinks Edition 627 with weekend update

This week, I got the news that my mother has dementia. It came shortly after my father received the same diagnosis. This is a meditation on getting old and my regrets in not getting my parents’ affairs in order sooner.

  • 4 September 2025

5 charts every retiree must see…

Retirement can be daunting for Australians facing financial uncertainty. Understand your goals, longevity challenges, inflation impacts, market risks, and components of retirement income with these crucial charts.

Why super returns may be heading lower

Five mega trends point to risks of a more inflation prone and lower growth environment. This, along with rich market valuations, should constrain medium term superannuation returns to around 5% per annum.

Super crosses the retirement Rubicon

Australia's superannuation system faces a 'Rubicon' moment, a turning point where the focus is shifting from accumulation phase to retirement readiness, but unfortunately, many funds are not rising to the challenge.

Latest Updates

Investment strategies

Why I dislike dividend stocks

If you need income then buying dividend stocks makes perfect sense. But if you don’t then it makes little sense because it’s likely to limit building real wealth. Here’s what you should do instead.

Superannuation

Meg on SMSFs: Indexation of Division 296 tax isn't enough

Labor is reviewing the $3 million super tax's most contentious aspects: lack of indexation and the tax on unrealised gains. Those fighting for change shouldn’t just settle for indexation of the threshold.

Shares

Will ASX dividends rise over the next 12 months?

Market forecasts for ASX dividend yields are at a 30-year low amid fears about the economy and the capacity for banks and resource companies to pay higher dividends. This pessimism seems overdone.

Shares

Expensive market valuations may make sense

World share markets seem toppy at first glance, though digging deeper reveals important nuances. While the top 2% of stocks are pricey, they're also growing faster, and the remaining 98% are inexpensive versus history.

Fixed interest

The end of the strong US dollar cycle

The US dollar’s overvaluation, weaker fundamentals, and crowded positioning point to further downside. Diversifying into non-US equities and emerging market debt may offer opportunities for global investors.

Investment strategies

Today’s case for floating rate notes

Market volatility and uncertainty in 2025 prompt the need for a diversified portfolio. Floating Rate Notes offer stability, income, and protection against interest rate risks, making them a valuable investment option.

Strategy

Breaking down recent footy finals by the numbers

In a first, 2025 saw AFL and NRL minor premiers both go out in straight sets. AFL data suggests the pre-finals bye is weakening the stranglehold of top-4 sides more than ever before.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.