What Every Family Should Know About Emergency Financial Planning

The impossible happened. Relationship breakdowns bring an incomprehensible amount of stress. Grieving the future you’d envisioned, navigating different conversations with children, and watching financial security crumble beneath your feet — the world feels shaky. But it doesn’t have to.

In an ideal world, every family should have an emergency financial plan. Fortunately, there are simple steps to achieve stability following a separation. Here is what everyone should know.

Securing Immediate Liquidity

Treat those initial few days as an emergency period. The quicker you seek specialist legal help with divorce, the better your chance of avoiding one party draining emergency funds. There is also a bit of free guidance available from Citizens Advice. The first goal is securing immediate liquidity. In other words, protecting access to sufficient funds.

Currently sharing bank accounts? Freeze or add a joint mandate to shared accounts. This prevents one party from emptying an “emergency fund” while allowing approved payments, such as mortgages or utilities, to clear. Secondly, redirect salary payments to a new account, opened solely in your name. From that date onwards, your funds will remain under your control.

Applying for Maintenance Pending Suit (MPS)

In some relationship breakdowns, the court can order a higher-earner to make maintenance payments to their former partner. This could be an avenue for your family. However, these decisions can take months to uphold, which might be too little, too late. If you fall into this category, consider applying for a Maintenance Pending Suit (MPS). If approved, this interim court order will approve financial support of “reasonable” daily living costs until a final settlement is reached.

Protecting the Family Home via Property Notices

Let’s address one of the biggest causes of friction in separations: the family home. When children are involved, the primary caregiver usually has an advantage when applying to remain in the house. However, in the long term, courts will typically order the sale of the property and the division of financial assets.

Living in a home under your partner’s name? It’s important to apply for home rights with the Land Registry immediately. If granted, this will prevent eviction during the separation process.

Freezing Orders for Asset Preservation

Shared bank accounts aren’t the only thing that should be frozen. Applying for freezing injunctions is an important step to prevent a partner from hiding, selling, or transferring assets. For instance, selling shares or transferring offshore savings. When promptly secured, these orders serve as an effective “pause” button, allowing courts to calculate a fair distribution. Applicants must provide recent bank statements and valuations.

Establishing a Transition Budget

Communication doesn’t need to deteriorate. If both parties are on amicable terms, suggest a transition budget to account for two separate households. On an individual basis, this transition budget is equally important. Track essential versus non-essential spending. Protecting credit scores and building a buffer could be essential in later stages, especially when applying for a mortgage on a new property.

Nobody wants to find themselves navigating a difficult break-up. But with these five steps, the process will be less stressful.

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Becky

Meet the award-nominated UK lifestyle blogger behind Spirited Puddle Jumper – a mum of three living in South East London! Becky shares the real ups and downs of family life, parenting tips, and lifestyle inspiration, proving that being a mum doesn’t mean you stop being fun or having other interests! Follow along for honest insights into UK family life and opinions on a whole range of topics, from travel and food, to beauty reviews, home and DIY, business and health and wellness.