Dear Qualified Financial Advisor,
My partner and I have been married for four years, but we’ve been living separately for some time. We’ve realised that our differences can’t be reconciled and are contemplating divorce. Immediately after we married, I quit my job and moved cities to live with my partner, who had a well-paying job and could support me while I was getting my start-up off the ground. I’m still in the process of setting up my business, and am not sure what financial ramifications the divorce will have on me, but I do know that I need to be prepared. How can I now take steps towards a stable future?
Dear Soon-to-Be Single,
I’m sorry to hear about your separation. Let’s create a roadmap so that your transition is less of a hassle.
Here are the things I would recommend that you first list down or check to ensure that you’re stable and continue working towards your goal of setting up a business:
Update Your Documents
If you have changed your last name on your documents post-marriage, you have to rework those documents after the legal paperwork of divorce. Once the divorce decree comes, you have to first update your Aadhaar card and, subsequently, your PAN card. Then, you have to update your bank accounts and investments too.
Check Ownership of Bank Account and Lockers
Find out the mode of operation — whether joint- or single-holding — along with nomination and contact details. This will be the key to most of your financial matters and the base for all your financial transactions in the near future.
Look at Your Demat Holdings and Investments
Understand how your investments were planned and in what mode of holding they are invested — check the holding pattern and, once again, the nomination and contact details. Due to digital transactions, the contact details play a pivotal role, as the OTP is received on the specified email IDs and mobile numbers. These would mainly be financial investments: PPF, recurring deposits, fixed deposits, mutual funds, bonds, stocks, etc.
Confirm Who Holds the Property
Is there any property in your name, or one that you both paid for together? If yes, be sure of what your share was when you bought it and whether it is attached to a loan.
Review Your Liabilities
Find out what types of liabilities have been created during your marriage — like home loan, car loan, personal loan, any overdraft facilities, a loan against an insurance policy, gold loan, credit card dues, etc. Check if you are a borrower or a co-borrower for any liabilities. You and your partner have to decide who will pay off the liability.
Evaluate Your Insurance
Take a good look at your health insurance policies. Are you covered by any policy with your spouse, or is it an independent policy? If the policy is a floater, then make sure that you move out of it, and have an independent policy so that you are covered for any medical emergency. Further, if you both jointly hold any life insurance or any policy that your partner bought for you, then you need to understand the policy benefits and update the nominee accordingly.
This won’t be an easy, one-step process. It will be a transition. We have to do it phase-by-phase and every step will take a while. These are some important factors you have to keep in mind while going through this divorce.
1 Finance Advisory Committee for Qualified Financial Advisors — Mumbai Chapter