How To Uncouple Your Finances After A Separation (With Minimal Drama)

“Uncoupling” in any format is a messy business. Be it a matter of separation, divorce, even the demise of a friendship, the process of untangling one life from another is hardly simple. And amidst the emotional trials (of which there are many), there are pragmatic ones, too — who keeps the cat? The apartment? What about your mutual friends?! And arguably most daunting of all: How do you confront shared finances? 

In the event of a divorce — or any separation whereby funds and assets are merged — it can feel near impossible to focus on finances while ushering yourself through the more sentimental aspects of the process. In fact, according to recent data from The Wells Fargo Money Study, talking about personal finances is harder for most folks than talking about religion, politics, or death (and almost as hard as talking about sex). “It's completely normal to feel overwhelmed — I think that's often a barrier to decoupling in the first place,” says Emily Irwin, head of advice relations at Wells Fargo Bank, “but untethering from one another financially is a big and brave step towards building a new future post-separation.” 

To help you get started, Irwin has built a topline guide to uncoupling your finances, designed to take some of the inevitable intimidation out of the whole charade — and perhaps, even foster some optimism. Here’s where to get started:

It certainly sounds unsexy to address the prospect of divorce while still in the honeymoon phase — but once you’re reaching milestones like marriage, moving in together, or merging your finances, Irwin suggests it’s time to open up the discussion. If you’ve considered the potential breakdown before you’ve actually leaned all the way in, you’ve already set a blueprint for backing out with the potential for minimal drama (and stress). “Debt and finance tend to be major stressors in people's lives. So talking about these things from the get-go helps build muscle memory with your spouse in terms of how you’re going to talk about things like this throughout the course of your relationship,” says Irwin. “Ask yourselves: How are we gonna check in with one another if there's ever a disparity of income or wealth? What’s a division of labor going to look like between us? How much will we actually merge?” 

Whether that involves building a checklist for yourselves, reaching out to an advisor, or talking to married or divorced friends who can shed some light, find a way to keep the discussion open around the question of merged finances — even before the notion of uncoupling looms. “It doesn't have to be this big, formal thing,” adds Irwin. “A friend of mine and her spouse always have these conversations on walks. They’re outside, birds are chirping, and it all feels a bit lighter than sitting down with a spreadsheet in front of you and going line by line.”

If you and your soon-to-be-ex are on good terms, you may choose to break the news of your imminent separation together and communicate your decision as a united front. That may not be possible though, and preparing yourself to be in a healthy mindset to share the news is key to self-preservation. Remember: You can’t control the reaction of those around you, but you can control being clear about your decision, expressing how it’s emotionally impacting you, and letting them know that you’ll need their support.

Much like with therapy, consider finding a mediator who truly suits you, your partner, and your situation. Yes, you’ll want someone you can afford — but you’ll also want someone who feels like a good fit in the midst of this process. “You need to be sure that you're picking someone you feel comfortable with,” says Irwin. “Do you want a bulldog or do you want someone who's going to work with the other side's attorney to keep things as copacetic as possible? Do you want someone who's going to split pennies? Do you want them to be very involved or minimally involved? If so, you need to ask for it.”

In order to locate your person, Irwin recommends tapping into your network: Do you have friends who have undergone similar experiences? Friends of friends? Who did they work with? What did they think? And if you don’t feel comfortable tapping your personal network,  search online through social media communities or chat forums. 

Moreover, mediators and divorce attorneys will often offer initial complimentary consultations. “These folks won't give you legal advice during the consultation conversation, but they will ask you about your financial background, your spouse, your general assets, and gauge how well you might work together,” says Irwin.

As Irwin puts it, it’s critical that you know what’s on your “balance sheet.” Beyond the bigger things like, say, a mortgage, it’s important to take note of what your shared investments look like. “Think about your home, other real estate, tangible personal property like furniture, cars, et cetera,” says Irwin. “Then start considering things like your savings and checking accounts, your investment accounts, all of your retirement accounts, emergency funds, anything of that nature.” 

For folks without prenuptial agreements, marital assets are typically split in the event of divorce. How those assets are split, however, depends on the laws of the state in which you reside. For example, if you live in a "separate property" state (which is the vast majority of the United States), the courts will usually determine if an asset is a marital asset (subject to division) or a separate asset (not subject to division, meaning you get to keep any assets that are considered "separate"). And while there is a presumption that assets acquired during marriage are marital assets, that presumption can be challenged and supported with evidence to the contrary. By contrast, if you live in a community property state, regardless of what’s yours, you’re typically each entitled to half.

A mediator may be essential in helping to divide some of the larger assets, but the smaller things — even items of personal or emotional value — can merely be a question of communicating to one another what’s meaningful to you. “I’ve seen couples go through a house and just put Post-Its on the things they each want most, before dealing with the things they disagree over with a counselor,” says Irwin.

That said, in addition to desire, it’s also important to consider necessity in these scenarios. “Think big picture: What do you have available to you? What do you need in order to be able to support your lifestyle as it is now, and as it will be after the finality of your marriage? What incremental changes, if any, do you need to make?” says Irwin. 

In these scenarios, a mediator or an attorney can be instrumental in helping to make sure everyone lands on their feet. “One of you might take the home, or you might need to sell it so you can each purchase smaller homes. When you're thinking about cash flow, if there's a disparity — maybe there was a stay-at-home spouse —  you need to ask, ‘What can I expect to receive, if anything, through the settlement? Will there be any sort of spousal maintenance? And if not, do I need to adjust my lifestyle?’” Irwin advises.

There’s no denying the emotional weight of undergoing this process — so make sure you’re taking care of yourself. Whether that’s couples therapy, private therapy, or a general commitment to *wellness* (a weekend away! A long run! A massage!), make sure you’re still prioritizing yourself. “Money is emotional. It’s important that you’re working through that,” says Irwin. “Communicate as much as possible. Ask your counselor to give you tools that you can implement outside of the negotiating room. How can you use those to avoid cynicism or resentment during this process?” 

“There's a lot of freedom in life after uncoupling,” says Irwin. “Yes, you need to put together your budget, and take realistic stock of what you can afford, but the fun part is that now, you’re setting your own goals. You get to ask yourself: Where am I at right now, and what am I going to do next?”

For all the ways an uncoupling operates as an ending, it’s a new beginning in equal measure. Find the hope in that: You’re a free agent. Your resources are yours. Whatever ambitions you choose to pursue belong to you. “Maybe you’ll go back to school and get that art history degree you always wanted, like my neighbor. Maybe you’ll travel more. Maybe you’ll redecorate,” says Irwin. “Ask yourself what you’ve always wanted to accomplish — then figure out how you get there.” 

And while, yes, naturally, that’s a far more complicated process than it may seem, tools like LifeSync® in the Wells Fargo Mobile® app are designed to help individuals work towards financial goals. Whether you’re tracking savings as you build towards an end game, or uploading photos and other inspirational materials as a mood board of sorts, use the resources available to you to help breed optimism in the face of your new financial future.