In previous articles of financial planning for women, we learnt about the starting steps of getting on one's own feet. Next, we understood the inherent multitude of risks women face, in the light of which, what must women do to mitigate the underlying risks.

Moving on, we will now understand how financial planning can help women in different stages of their lives. We discussed the life stage of married women of all ages, with or without children. Here we move on to another life stage.

Life stage: Separated but not yet divorced

This 'separation stage' is the last relationship bastion available before total separation i.e. divorce. Emotionally, the relationship has come to a close; however, legally this is the stage where any sort of restoration could be possible if that is still an option you wish to consider.

It is a stage where you are still not sure of seeking a divorce. It is at this stage that the law provides a remedy of 'legal separation'. In other words, a state where you are neither married nor you divorced. You could be living together under one roof or be living separately.

Legally, such judicial separation is considered to be a 'separation from the bed and board'. This means that the couple is free to lead their own lives, within certain limits. Their conjugal duties are temporarily suspended. It is just one step before divorce.

Finally, the last thing to understand about this stage is that a separation could be reversible while a divorce would totally and permanently end the marital bond.

Most of the emotional trauma at this stage is also due to financial considerations and the likely situation post separation and finally post divorce. So the question to answer is how to manage your situation if you are already emotionally separated and perhaps considering judicial or legal separation.

The first step here is to have a formal separation agreement, which would be pretty much in line with the grounds for a divorce settlement. It would include issues such as divisions of assets, child custody, support, etc.

Normally such an agreement sets all the ground rules and hence it is critical that such an agreement is well drafted and worded in a manner by which both of you are on a fair ground now and for the future.

The next step is to start considering and understanding your options.

If you are living in your marital home or if you are co-owner to such a property or if you have a joint mortgage arrangement on the house you live in - it is best NOT to leave your home. It is prudent to wait till divorce papers are made and filed.

The separation papers must state clearly who will retain the house and how much will the spouse retaining the house, pay the spouse. If it is proposed that the house be sold - then the split of proceeds also need to be documented in the percentage format.

If your house is on lease and your name is a part of the lease agreement, the entire rental will be your liability if your spouse moves out. That could be a burden on your cashflows. The same applies to utilities - split them or take your name off the utility bills.

You must have a log of all the financial papers in your home - shares, mutual funds, fixed deposits, bonds, Public Provident Fund accounts, debt details, insurance papers etc.

You must know all that is there in your name and in your spouse's name. Another very important set of papers, you must have are copies of the tax papers (last eight years) of your spouse. This is more so if there has been transfer of funds from one spouse's account to another. If there is a situation of income tax scrutiny and if you need to justify any matter; those papers will be handy else quite likely you will have to cough up whatever is demanded.

An immediate action required is to close all joint accounts or transfer funds to your personal/ individual accounts. If you don't have one, please open one at the earliest. Please find out who has the cheque book to such bank accounts.

Another important area, which is generally overlooked in such situations, is the consumables in your current home. If you plan to move out you need to take all that you think is necessary. This includes small things like your favourite shoes to your music CDs to electronics and whatever else you own and is dear to you. The point is that you may not get an opportunity to do so again and such basic items can total up to a considerable sum when you have to purchase all of it again.

Legal separation is the prelude to a divorce and in certain instances, the law allows for claiming maintenance during such periods. As you would have noticed that in this stage, there is more general financial affairs planning to do so that during the divorced phase of your life financial planning could be done.

Else financial planning becomes quite difficult to do if you don't have much and are going to step into a divorce shortly. We shall talk about financial planning post divorce in the next part.

All said and done please do not forget that the even after such a legal separation the doors for reconciliation are still open.

The author, Kartik Jhaveri is an expert at Financial Planning, a Certified Financial Planner and a Chartered Wealth Manager. He may be reached at kartik.jhaveri@transcend-india.com.

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