Do I have to pay for my ex's midlife crisis?

We don’t live together anymore and we hardly see each other but am I still liable for my ex’s new toys?

Do you have to pay for your ex’s midlife crisis?

It’s a story as old as time. When people leave a long-term relationship, they sometimes go a little crazy with the new toys.

Red sports cars, new shoes, designer outfits and holidays. Most of us have a weakness for a little credit card therapy.

But do you have to pay for your ex’s midlife crisis, even if you’re already separated?

Not necessarily. You are not automatically liable for every debt your former partner incurs. Much depends on whose name the debt is in, whether it is held jointly and whether you guaranteed it. However, spending from joint accounts, borrowing in joint names and post-separation spending may still affect your financial position and eventual property settlement.

Separation does not automatically end your financial ties

We can become so wrapped up in the wedding day and everything surrounding it: the date, the dress, the invitations and the location. Yet many people give little thought to the legal significance of getting married.

Marriage also creates important legal and financial consequences. Those consequences do not simply disappear when one person moves out or the relationship ends.

The good news is that you do not usually have to wait 12 months to begin resolving your property and financial matters.

Divorce is only one part of separation

One of the most common misunderstandings about family law is that a divorce is all you need to legally finalise a relationship. While married couples generally need to have been separated for at least 12 months before applying for divorce, divorce is only one part of the process.

There are three distinct areas to consider:

1. Divorce

2. Parenting arrangements, if you have children

3. Property and financial matters

Each can be separate and will require a different approach.

Divorce

A divorce legally ends a marriage.

Australia has a no-fault divorce system, which means the Court does not consider who caused the relationship to end. The Court must be satisfied that the marriage has broken down irretrievably, the parties have been separated for at least 12 months and there is no reasonable likelihood that they will resume married life.

A divorce does not determine parenting arrangements or divide property and finances.

Parenting arrangements

Parenting arrangements do not always require Court involvement.

If parents can agree on arrangements for their children, they can record them in a parenting plan. A parenting plan provides a written record of the agreement but is not legally enforceable.

Parents who want an enforceable agreement can apply for consent orders. If they cannot agree, they may seek parenting orders from the Court.

Property and financial matters

Financial matters can be formalised through consent orders, a Binding Financial Agreement or orders made by the Court.

Until that happens, spending and financial decisions made after separation may still affect the assets and liabilities available for division. However, this does not mean you are automatically liable to a creditor for every debt incurred by your former partner.

Unlike divorce, you do not usually need to wait 12 months before addressing property and financial matters. In fact, dealing with joint accounts, debts and assets early may help prevent further complications.

Married people should also be aware that an application for property or financial orders generally must be made within 12 months after a divorce takes effect. The Court’s permission is

required to apply outside that period.

So, are you responsible for the new jet ski or those must-have Manolo Blahniks? Not automatically but while you are still financially joined your ex will be spending joint funds some of which could end up as yours.

Much depends on whose money was spent, whose name is on the debt and how the spending is treated when the property settlement is determined.

In family law, we talk about the “property pool”. This generally includes the assets, liabilities and financial resources considered as part of the settlement. The Court then considers matters including the parties’ contributions and financial circumstances before deciding whether the proposed outcome is just and equitable.

That is why it can be important to obtain legal advice and formally resolve your property and financial matters as soon as

you reasonably can.

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This article contains general information and is not a substitute for legal advice about individual circumstances.

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Susan Hewitt is the Principal at Bright Side Family Law, a non-litigious family law and mediation practice. Susan has worked as a lawyer and journalist for almost 30 years. She is an accredited collaborative lawyer and family-law mediator who is committed to helping families through their relationship breakdown in an honest, cooperative and respectful manner. 

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