The Hidden Financial Red Flags Women Must Never Ignore in Relationships

Speaker 1 Welcome to The Wing, the emotional and financial health check you never knew you needed. We provide tangible solutions for young women to build emotional health and wealth on their journey from school to motherhood. This is the podcast for young women in Australia navigating the big stuff, life, money and motherhood. From high school to first homes, babies to bank accounts, we take you on an interactive listening journey that helps you make smart, empowered decisions every step of the way. Speaker 2 Hello ladies, welcome to another episode of The Wing. Today we are chatting to Angela Lee. She's a family lawyer, so hopefully we're going to get some answers on some questions that I know a lot of you have been wanting to hear about and certainly personally out of interest to hear it from a professional. So Angela has been a family lawyer since 2014. She offers direct and honest yet caring and compassionate legal advice. She is thorough and considered in her approach and assists clients in an efficient, pragmatic and solutions focused manner. Angela is experienced in all areas of family law, but she really shines when dealing with complicated financial matters and complex parenting matters. Angela is a graduate from the Australian National University with a double degree in Science and Law with Honours. She also holds a Master's degree in Family Law and is a NSW accredited specialist in Family Law. Angela speaks conversational Mandarin as a second language. Unfortunately I won't be able to compensate in Mandarin, but it's another one of Angela's many skill sets. Personally, Angela is a keen traveller. She has been to over 30 countries and counting. Her last adventure was to Nepal for a 12 day high altitude trek in the Anna Perness and hopefully I got that right. When she's not travelling or doing family law, Angela will be with her animals, 2 cats and a foster fail Bunny. Angela also holds performance degrees in piano, classical and jazz and clarinet. So that is quite the skill set, so welcome Angela. Speaker 3 Thank you so much Katie for the lovely introduction and for inviting me to your podcast. Speaker 2 Absolute pleasure, thank you for accepting the invitation. I absolutely love chatting to professionals in various fields. Angela and I were introduced through a mutual connection, Jessie Chen from Loan market who has featured on the wing twice now. So it's nice to have a nice warm introduction and yeah, have have the professional on the microphone so that we can get some facts straight and and hopefully learn something today. So Angela, we'll get into the questions we have. I have a lot for you. So we will do our best to to summarise as best we can. So question number one for you Angela, what legal mistakes do you see women make most often in relationships or traditional heterosexual relationships? I thought about. Speaker 3 This one quite hard but I think all my answers really came down to 1 fundamental thing, which is I don't think we prioritise ourselves enough or we're not very good at prioritising ourselves. We're always putting, you know, the relationship, the children or our partners needs probably ahead of our own need for financial protection. And I don't say that as a criticism, but merely as an observation that, you know, that's, that's just what I see in a lot of clients who come in the door. And of course, we do it for the right reasons. You know, family, we we want family stability, support our partner, we want to keep the pace. But you know, all of the stuff over time can lead to a real cost to ourselves. The relationship breaks down. It sort of makes it harder to leave if, for example, you don't have that financial independence. And my personal view is I think a good healthy relationship should be something you choose and want rather than it be something that that you're sort of dependent on and can't leave. Speaker 2 It's interesting, isn't it? You're seeing it through. Obviously, you know, we all have our personal ends, but seeing I'm sure plenty of clients over time that may have made mistakes early in relationships and then not being able to escape them or make changes to set up for a more positive future or better outcomes. And by not prioritising that early in relationships for women, that can be detrimental later. So I'm interested to know Angela from you to and to give some insight and perhaps advice in this space. But what financial red flags should women never ignore in relationships? Speaker 3 I I think secrecy about money is a big deal. Not being able to have that open communication with your partner about what assets do we have, what are our debts? You know, what's our budget? What money do we have coming in on a weekly, fortnightly, monthly basis? What are our outgoings? A lot of people just don't have that conversation. It's uncomfortable, it's awkward. You don't want to come across as greedy, Like, there's a lot of reasons that sit behind that, but not having that conversation is a red flag or feeling like you can't have that conversation is a bit of a red flag for me and for a lot of clients to when we see them when they're going through a separation. The first step is to work out, well, what actually do you have? And a lot of clients just don't have any idea of where to start with that, you know? And yeah, so I think while you're in a relationship, having that open communication is important. Debt can, you know, shape your life decisions, housing, kids, and it might be something you end up being indirectly responsible for in a separation or even not in a separation, right. So I guess, yeah, having the open communication, that was my first, I guess, red flag. And then on the flip side of that, the second sort of point I had in response to this was feeling pressured to combine finances too quickly or too early or when you're not ready for that, but you're getting that pressure from your partner. And if you do that too early, you're probably exposed to their financial habits. If you're not really, you know, if you don't know what they are or their debts, and if you're not ready to make that decision to become a financial intertwined couple, it's a bit of a red flag. And then it also means it's harder to sort of disentangle if you do separate. Speaker 2 Yes, I think that's great insight, Angela, because I, I mean, I've seen it obviously in sort of my own circles and you're seeing it with clients of making sure that you're comfortable having the right conversations early so that you don't jumping into things financially in particular. Yeah, when you're not ready or. Speaker 3 When a way or wrong way to do it. But I think what that's right with you in this relationship is, is your test like it's your own test, Yeah. Speaker 2 Yes and sometimes you may not know how you're going to come into it or approach it if you haven't yet and it could be overwhelming. But being able to spot yeah those red flags early, like you said, secrecy and then obviously sort of being pushed if you if you're not ready. And it could probably goes both ways honestly. Like we obviously speak through the lens of females, but this could go both ways with males as well. So making sure that you yeah, coming together and and getting the foundation right before you start making big changes or being a big impacts and understanding where your partner is is up to financially. Like you said, it's difficult. You don't wanna come across greedy or like you're snooping, but ultimately if you're coming together in a relationship, you need to be open and have that level of communication so that you are aware of any, you know, if there's debt already associated with your partner, it's probably something that you should know about and have a right to know about. Because you know, when you legally, if you legally come together or in any kind of way and which we'll get into, yeah, you may end up being responsible for that as well. So. Speaker 3 Yeah, it's a big ask and it's a big decision for someone else to be responsible or to join you financially. And it's a bit of a, I guess a relationship house check as well early on for right to manage finances together. Do we want to do that? And coming into it fully informed for both sides, yes. Speaker 2 Angela, what rights do women usually not realise they have when it comes to dividing assets during separation or divorce, or even during marriage? Speaker 3 I think there's a lot of myths out there. So the first one that I hear a lot is, you know, just because the assets not in my name, it means I've got no claim to it. That's certainly not the position at law going through a separation. Our, our first step is to work out what, what do the two of you have separately and together and through, you know, trusts companies like other entities that you control. So just because the house isn't in your name doesn't mean you don't have a rightful claim to it. That's definitely a common one. And then probably an assumption that it's going to be 5050 because there is no such presumption in Australian law. There is no presumption of any starting point. We start with a blank slate and then we go from there. So yeah, it may very well be that you are entitled to more than 50%. So getting that advice early on to understand we stand legally. Another common 1 is probably super not understanding that super is part of your asset pool and that it can be divided. There's something called super splitting in the family law context, where after separation one party super can be transferred to the other party super. So it goes directly from super to super as a top up for, you know, especially for women taking time out of the workforce and you've lost those years in terms of being able to contribute to super. And we all know from the figures that on retirement, women have a lot less super than men. And so super splitting is sort of the family law fixed to that to balance that out. So that's that's definitely something that you know you would want to look at in any property settlement context. Speaker 2 Thank you for outlining that, Angela. That has been a that superannuation in particular has been a burning topic that we've been wanting to cover for our listeners and you know, personally as well, it's an interesting topic and it's something that comes up in so many conversations understanding super splitting as a term. So this is something that could be considered or talked about while you're in a relationship. Maybe you might be married or de facto whatever the situation may be. So when if women are taking time out of the workforce to have babies and raise babies, this is something that couples could explore so that the females superannuation is topped up by the partner during the time that they're out of the workforce. So that that I guess the female isn't as far behind or maybe not behind at all when it comes to the superannuation pool as an asset. Is that correct in in saying that like this is a conversation people can be having while they're married or while they're in relationships? Speaker 3 I I'm aware that there probably are super tax related issues to get financial advice about. There's probably caps on how much you can contribute, but it's certainly something people should be looking at. Or if you haven't done it while you're together, talk about it on separation. Speaker 2 That's fascinating and that's something that I think might give some Peace of Mind to a lot of mums out there or or women coming into motherhood. If you're pregnant now or if you're you've just had a little one or maybe your mat leave has finished, maybe you're not at that stage and it's something in the future for you. But being able to know that this is a conversation you can have with your partner. Obviously, both parties need to agree and it needs to line up with your overall, you know, financial and tax situation, which as Angela said, that's a conversation to have with financial planner, even looping in your accountant to seek that professional advice so that you can mitigate any risks or any shortcomings that you're feeling that you might experience in as a result of having some time out of the workforce. Speaker 3 Like supers, most people, for most families, it's the second most valuable asset that you own after probably the family home, right? But it's also something to not think about because it's not something we can touch or see until we're, you know, 6567. You know, a lot of people sort of don't have it at the forefront of their minds when negotiating a settlement or just generally in terms of financial planning. But it's your hard earned money of a, you know, your entire career. Yeah, it's very valuable. Yeah. So don't don't ignore it. Speaker 2 I think as well, and we don't need to answer this Angela, if it's it's folds more in the financial planning category. But if anybody's got a self managed super fund, for example, like while we can't access our super until you know, 65, if you have a self managed super fund, you can potentially depending on your situation. Again, this is not financial advice, but the ability to buy assets in a self managed Superfund. So the healthier that fund, that's obviously when to, you know, when you kind of merge together, which is different to having separate super, that is something that could also help kind of build that asset pool as well over time. So if it is more equally weighted, then it is a benefit. Obviously, it's a benefit to both parties anyway, as you know, as you sort of, you know, particularly if it's coming to raising a family or anything like that. But there are other things that you can be thinking about as well in that space that, you know, things you can be doing now to be setting yourself up for the the future. And then in the case of separation or divorce that, you know, it's going to be able to sort of come out in more equal parts. Angela, do women need to protect themselves legally, even in good relationships? Speaker 3 It's hard to say, look like every woman in every scenario ever, but I think as a starting point, being aware of what your rights are and what the options are like, I don't see sort of legal protection as a sign of mistrust in the relationship or as a negative thing. It can be a, you know, and it should be there for both of you. It's there to protect both people in this relationship through, I guess, uncertainty or change or, you know, having a way or a greed way of, you know, this is how we're going to manage our finances while we're together. This is how we're going to do things if we do end up separating. I think we're sort of getting into the realms of a binding financial agreement here, which is really the only thing you can do in Australia while you're in a relationship to protect yourself financially if we're to separate. So it's sort of like the concept of a prenup, but you don't have to do it just before you're married. You can do it at any stage of the relationship. And the way I sort of describe a prenup style document to clients is you're not protecting yourself from your partner. Like it's not something that should be in between the two of you. It's your, what you're doing is you're protecting your ability to make decisions about your life and your assets and how you're going to be merging assets together. If that is the plan. That's what I see as sort of legal protection in, in answering this question. And it all comes down to what we were saying before about being able to have open conversations with your partner about our finances. Even if you don't plan on separating, that's still a really healthy thing to do. And then if, if you do separate having a good financial plan at the other end? Speaker 2 Yeah, I think it's not necessarily something that needs to sort of come to a crescendo if you're about to get married. These are things that can happen along the way of any relationship. There are a lot of couples that are together that aren't married and they might have kids together and then they might own assets together. They they are still able to get a legal representation or legal protection on both ends even if they're not married. And if, you know, they go down that road and then end up separated. Is it a similar process to a divorce in that case, legally, Angela? Speaker 3 Very similar like in terms of the concepts that apply contributions, future needs. It's it's the same. The law is the same. There are a few differences in terms of time limits and extra things like jurisdictional things for the fact that are couples, but the law itself is it's it's identical. Speaker 2 Yeah, wow. Yeah. Just because you're not married doesn't mean that, you know, as I heard a lot of people say that having kids with someone is far more of a commitment than a piece of paper, for example, example, for, you know, in getting married. So this is, yeah, absolutely something that that we can be thinking about in de facto relationships and that it is just as important to have the right legal protection whether you're married or not. Speaker 3 Yeah, and it's like it's for people who aren't married, you know, might feel like, OK, we haven't chosen this path because if you are married, you know, vows and everything, like we've committed to, you know, a financial life together and a life generally together. But for people who aren't married, maybe it feels like you haven't opted in into this sort of legal process. But it's the same law. You know, I think it's, it's important for whether you're married or not married at any stage in the relationship to be thinking about, well, do we want the Family Law Act to apply to us? Or do we want to do our own thing and set it up own way early on in the relationship or during the relationship so that it's what we want and we're both clear and we have certainty about what it might look like if the relationship doesn't work out? Speaker 2 It's it's funny because you in a relationship, you, you know, you both opt in at one point in time, but perhaps that can feel different for yeah, you know, minus, minus the vows and the big party, but legally each. Speaker 3 Other, of course, but whether they're, yeah, I financially as well, I take on your debts and be partly responsible for that. Speaker 2 Great perspective on that, Angela. I think that's very valuable. What are the biggest mistakes women make during break UPS or divorces? Speaker 3 During break UPS or divorces I think agreeing to things out of fears the right word. I'm not sure, but especially when kids are involved, agreeing to certain outcomes to keep the peace or wanting to get it over quickly or just avoiding the uncomfortable space of, you know, conflict. That's a very common thing that I see. And my view is, look, if it's your decision, as long as you're informed about, you know, what your options are, that's that's fine. But I certainly see that a lot more in my female clients than in the male clients. The other thing is probably not seeking advice early enough, leaving it too late. Like I understand this, you know, probably a sense of I don't want to be the one seen as lowering up. You know, I don't want things to get nasty. Seeing a lawyer doesn't mean it has to be that way, but just understanding your options early on that might shape how you negotiate, prevents mistakes, you know, helps you have a bit of a plan early on while you're starting that process and not feel maybe cornered into accepting a poor deal later on. Yeah. And. Speaker 2 Just on the topic, the Angela of not rushing it like like typically not wanting to rush the process, take take your time through that process in gathering all the information and understanding where you are now and where how that might shape your negate negotiation in the future. When you say getting advice early, could you give us like a real life situation on that? So if you're starting to feel like a relationship is breaking down or communication lines aren't as open and maybe that's gone on for three months, for example, is that a good time? Is that too early? What's the When you say early, what do you mean by that? Speaker 3 Probably wouldn't put a time frame on it because every relationship is different. But I think when you are seriously contemplating separation, like it's not just a fleeting sort in the midst of an, you know, heated argument or anything like that, but it's it's seriously you're contemplating. I'm I'm leaving this relationship at that point be wanting to speak to someone. That's probably a good time. I think just it doesn't need to be an ongoing engagement with the lawyers, but just understanding, look, if I do then make the decision to separate, what are things I should be mindful of now to put in place? What information do I need? What resources and support, you know, is out there for me? How do I do this in in a way that is, I guess respectful to both of us? We don't want to litigate. I mean, most people don't come in here saying I need to go to court today. That would be a fairly extreme sort of situation. So understanding what processes are out there available for people who who aren't wanting to go to court, which is most people. Speaker 2 Trying to remove as much conflict or added stress as possible is I would presume a lot of the goal of a lot of people and couples. Would you give on the flip side, so when couples are in de facto relationships earlier you were saying, Angela, sort of getting that advice early. Would it be similar to sort of breakups and divorces? You kind of know when you need to sort sort of start thinking about getting something legal in place? Or is it, you know, when you're saying early, saying sort of, you know, once you know it's serious kind of thing in the 1st 12 months or before a transaction is about to happen, like you might be buying a house or buying an asset together. Speaker 3 It's sort of both ends of the relationship, I guess if you're thinking about separation, yes, at that point, check in with a lawyer, rewind the clock at the start of a relationship. Everybody's happy, we're in love. We might be wanting to buy a house together or investing together, or I might be putting resources towards something that's in his name, whatever you might be doing there. But before the sort of first major financial and to mingling, that would also be a good health check to go see a lawyer at that point. There are also other particular timings like before having a baby together, having a bit of a plan ahead about what what does this mean for me financially if we do then separate after having kids. There's also a time factor there as well, two years of being in a de facto relationship. So before you took over the two years, it would also be a good checkpoint with a lawyer. And the reason why I say those things is there the jurisdictional requirements for the factor couples to then be able to make a claim against the other persons assets if you meet one of those things. So having a bit of a plan before you are worried about what is he going to make a claim against me, can I make a claim against him? That's probably the right time to be having those conversations. Speaker 2 Interesting. Yes, those timelines are key and again potentially something that some of our listeners might not be aware of as well. So now we kind of touched on this a little bit earlier, Angela, with with regards to our superannuation, what happens financially when couples split and one person sacrificed career opportunities for children? Speaker 3 Well, your contributions that are non financial in nature are relevant and should be considered in the property settlement. The law specifically recognises, you know, contributions as a homemaker, as a parent. So it's not just about who earned the money or you know, who paid for the bills. Contributions towards the family in a non financial way is just as important. So yes, that would definitely be relevant in the assessment of contributions. If it means your future career progression is impacted, if it means that you need to be working part time or taking time off work because you have caring responsibilities, that's also relevant in assessing what your future needs might look like because that obviously impacts you if you're having to take time off work to look after kids on an ongoing basis. So it's definitely relevant to the division. It might be one of the reasons why you might be entitled to more than what you might think you're entitled to. And that applies in relation to the overall property pool. It applies in relation to super, applies to the entire asset pool. One thing I would say on this is not necessarily focusing on what feels fair like right now while you're going through the split, but just be future focused as well because you'll have housing costs you've got the cost of and the time of, you know, rebuilding a career. There's the gap in retirement, like it's a long term thing. So being aware of, OK, maybe seeing a financial planner in this sense, what does it look like for me five years, 10 years, 15 years down the track because it is a big legal and financial decision you're making now, but it's for your future. So you want to make sure you know you're going to be OK in the future? Speaker 2 On the topic of property, Angela, what should every woman know before buying property with a partner? Speaker 3 You definitely know how you're going to be structuring your ownership. By that I mean are we going to be joint tenants? Are we going to be tenants in Commons, how we actually owning this property legally? And then the other thing to be aware of is if you were to separate, you won't necessarily get back what you put in to that property property. And if you want to know what you might have off the property, then that falls under sort of the bigger picture of what you should probably get some legal advice spoke to your circumstances, but there is no sort of starting position or rule that what you put in is what you get out. Speaker 2 What's the difference between joint tenants and tenants in common? So they're both. Speaker 3 Ways of how you can own a property with someone else? If it's joint tenants, then if one of you passes away, the other person automatically I guess inherits the property. It's just transferred to them. Tenants in common is where you say, well, I own my half or my X percent, whatever the percent might be, and that's mine and you own your share and that's yours. Now, from a family law perspective, like I said at the start, just because it's not in your name, it doesn't, you know, really matter. But if you're going into owning a property, you should at least know how how how it's going to be structured. Speaker 2 Yes, indeed, going in blind to anything is not ideal and particularly when it comes to purchasing a large asset like a property, having an understanding on what you want or need that to look like beforehand. Obviously you would get asked these questions through the process anyway with your solicitor, but being able to understand it clearly before kind of rushing. And obviously sometimes property purchases can be somewhat rushed or there's time pressure on, you know, making sure everything's ready in time for an auction and all the other pressures that come in purchasing a property. So having that clear understanding early and again, before you get distracted by the rest of the process, that's very important. Angela, a joint bank accounts a good or bad idea, Yeah. Speaker 3 I don't think joint accounts are inherently good or bad in and of itself. I think it's about working out is it good for us, do we want it, do we not want it and then making that decision for us. So for example, I think in Healthy Dynamics joint accounts probably a good idea in terms of supporting fairness and cooperation and you know, transparency for shared expenses like rent or you know, mortgage and bills, but there's probably some risks there as well. I think most financial advisors will say having some sort of like a hybrid approach where we have a joint account for managing our shared expenses, but that we also have our own accounts on our own name, you know, as an emergency fund or something. Don't put all your eggs in one basket, as they say. Speaker 2 Or even that piece of independence OR the, the, the feeling of, you know, yes, having the hybrid approach where you've got your joint. But then if, if you have, you're still your own account and you still have that, even if it's just the idea of independence, that is, you know, enough to sort of not feel like you have put all your eggs in one basket. That's the interesting perspective I think too. Angela, what advice would you give women who feel trapped financially in a relationship? Speaker 3 When I saw this question, I immediately went to, you know, financial abuse, financial control, coercive control, that sort of context where you're dependent on your partner financially, but and you might be worried about how to actually separate, how to leave the relationship. You're worried about how you might support yourself or the children, even if the relationship isn't healthy and you know it's not healthy, but but you feel stuck and you don't know where to where to begin. My first piece of advice is to have a plan about how to go about the separation. You might feel like, you know, I can't leave. I don't know where to start or it's easier to stay than fight it out and sort of just trying to not think about the process and just avoiding all of that. But if you have a plan and place a plan for separation, legal, financial, practical, you know, it might not be as scary as what it might feel like taking the first step. And you probably are entitled to more than what you think you would be entitled to. So having a plan and knowing where you stand legally will probably help you feel that it's not so scary and it's something you can do. For example, you know, knowing that just because the assets are in his name doesn't mean you don't have a claim. If you don't have access to those assets, you don't have access to bank accounts. Well, we can fix that. There are things like spouse maintenance, you know, where we can make sure that you're OK. You've got the money to look after yourself before you even start negotiating a, you know, overall financial settlement. And also to know that you're not the only one going through this. This is a very common sort of sentiment out there. Feeling stuck that I can't leave for financial reasons. You're not the only one going through it. You're not going to be the only person, and you won't be alone in the process. We're here to support you. There's a lot of support networks out there. Legal, financial, financial counsellors. Yeah. Speaker 2 Great advice, Angela. I think, you know, feeling trapped, it's suggested common, very common thing like you said as well. And it's not whatever the situation may be. Yeah, it won't be the first time that this situation has cropped up and it won't be the last. So knowing that these professional services exist so that you can have help navigating difficult situations and to help that feeling of not feeling trapped and at least knowing that you have options. Now I have one final question for you before we wrap the episode. What's one thing you wish every woman understood about protecting herself financially? Speaker 3 I'll use this as an opportunity to sort of wrap up everything we've talked about today. If there's one take away message, which is build wealth in your own name, have your own bank account, not exactly what you have, not exactly what you owe. Have at least one bank account in your name with emergency savings and understanding that by doing this, it's not because you are fostering mistrust or it's a bad thing for your relationship. It's about having that financial independence and having the choice if you do end up separating. You're choosing to be in this relationship for the right reasons, not because you're dependent financially or otherwise, on it. Speaker 2 Great advice and well summarised Angela. I think that there are a number of juicy takeaways in there for our listeners. We just certainly appreciate your time and preparation in today's podcast. Yeah, hopefully there's, there's lots of takeaways there. And, and if any anything is relevant for, for you as a listener or anybody that you know that might need some help or a push in the right direction, no matter where they're up to in their stage of their relationship, beginning, middle or end, there's options available and things you can be doing now and, or in the future that are going to set you up for success post relationships before relationships even. So I think that's an important takeaway. Now, Angela, would you like to let our listeners know where they might be able to find you? Speaker 3 Yes, so I'm a family lawyer. I work at a firm called Farrah Jassini Dunn. We have offices in Canberra, Melbourne, Sydney and Coffs Harbour. And so either Google my name, Google FGD Lawyers, you'll find us. Speaker 2 Amazing, yes. So if anybody, yes, needs to have a conversation or, or needs to put this podcast in front of someone who might need to have a conversation, please share and feel free to reach out to Angela and she'll be able to point you in the right direction. So Angela, thank you very much for joining us on the Wing podcast. To our listeners, thank you for tuning in for another episode, and we look forward to catching you on the next episode of The Wing. Speaker 1 Enjoy the episode, hit follow and check out the Underscore Wing Pod Oz on Instagram for a dose of wisdom getting you on the right path to success.