Financial Tips for Women Facing Divorce

Financial Tips for Women Facing Divorce

Financial Tips for Women Facing Divorce

While neither gender has an exclusive lock on money management skills, the financial deck is stacked against women. Women earn about three-quarters of what men earn. In a divorce, they get less of the assets and more of the children. They live longer, and one in eight elderly women lives in poverty, compared to one in 12 men, according to  figures from the U.S. Department of Health and Human Services, the same may apply in South Africa. Unfortunately, many women view money and money-related tasks as necessary evils, not opportunities to even the odds.

The divorce rate is beginning to tick upward for couples who have been married for several years, decades or longer.

Recent media reports tell the tale, and it’s easy to point to the divorces of long-time couples like Arnold Schwarzenegger and Maria Shriver, Al and Tipper Gore and others for evidence of what many now consider a growing trend across the world.

Older women who have been in long-term marriages must nowadays confront unique financial issues when they’re facing divorce. Just as younger brides have their own set of concerns to mull over; older women have to pay special attention to a number of financial matters specific to their age and the often sizeable assets that have accumulated over the course of a lengthy marriage.

For example, women who have been married for some time and facing divorce must be particularly vigilant about protecting their:

1.         Business

Even though it may seem incredibly unfair, a divorce can ruin your business –unless you have taken the appropriate steps to “divorce-proof” it (ideally while you were still single).

How can a divorce ruin your business? Consider this:

If you nurtured a business, and it increased in value while you were married, the amount of increased value must usually be included as part of the marital assets that will be divided between you and your husband, unless of course if you got married out of community of property without the accrual. It doesn’t matter who operated the business or how it’s titled.

2.         Retirement funds

Divorce requires the careful scrutiny of all retirement annuities and pension funds. It’s essential for your divorce settlement agreement to clearly spell out how these assets will be split and how those funds will be transferred.

Many women often make the mistake of assuming that a divorce order will fully protect their rights to their portion of their husband’s retirement annuity or pension fund. This is usually not the case, and the settlement agreement need to be drafted in a particular way to include these assets.

3.         Insurance

Most women pay careful attention to their health insurance needs. But, don’t forget: In your new role as a single woman, you’ll need to consider life, property/casualty and disability insurance, as well. What’s more, if you will be receiving child maintenance you will want an insurance policy that protects you financially in the event something happens to your ex-husband.

4.         Short-term and long-term financial stability

Following your divorce, you’ll need financial stability in the short-term, and you’ll have to take the right steps to plan for financial security into your retirement years.  For starters, you must create a budget that will allow you to maintain your lifestyle, pay off debt and increase your savings.

But, what happens if the divorce settlement doesn’t provide enough income to pay your expenses? In that case, you will need to start immediately liquidating assets to maintain your lifestyle.

5.         Assets that he concealed

What happens when you find out 2 years after the divorce of certain assets that your husband did not disclose and which would have had an impact on your initial divorce settlement? A good divorce attorney will know how to deal with issues such as these in a divorce settlement agreement, to allow a claw back to claim any assets that your ex might have hide.

The following steps may be recommended for women in a divorce:

1. Set a financial goal — be as diligent about money as you are about fitness or your career or about anything else.
2. Train yourself to be financially independent — don’t allow yourself to become reliant upon your partner’s decisions, and become involved in long-term financial planning.
3. Buy your own home — don’t wait for Prince Charming to come along and do it for you.
4. Fund your retirement annuity — an important step for everyone, not just young women.
5. Opt for long-term planning over crisis management — get serious about money now; don’t wait for trouble to strike.
6. Start investing — do it now, and don’t be afraid to make mistakes.
7. Don’t fear risk — women are especially prone to conservative investments; be willing to seek aggressive growth when appropriate.
8. Don’t go it alone — work with a financial planner to educate yourself and to feel more secure in your decisions.
9. Know that it’s never too late — remember that you can start late and finish rich.

About the author:

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in most sectors of the law and 13 years as a practicing attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com and is frequently quoted on Family Law issues in newspapers such as the Sunday Times and Business Times. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, international divorce law, digital rights, media law and criminal law.

Grounds for Divorce in South Africa

Dissolution of a civil marriage by divorce in South Africa

Three grounds for divorce were introduced by the Divorce Act:

1.  irretrievable breakdown of the marriage (section 4);
2. mental illness of a party to the marriage (section 5);
3. continuous unconsciousness of a party to the marriage (section 3).

Irretrievable breakdown of the marriage

Section 4(1) – court may only grant a decree of divorce on the ground of the irretrievable breakdown of a marriage if it is satisfied that the marriage relationship between the parties to the marriage has reached such a state of disintegration that there is no reasonable prospect of the restoration of a normal marriage relationship between them.  There are thus 2 requirements:

(a)   marriage relationship must no longer be normal;

(b)   there must be no prospect of the restoration of a normal marriage relationship between the spouses.

The legal definition of “normal marital relationship” should be sought in the concept of consortium omnis vitae.  When either spouse or both of them behave in such a way that the consortium omnis vitae is terminated or seriously disrupted, it can be said that a normal marriage relationship no longer exists between the spouses.

Schwartz v Schwartz:  in determining whether a marriage has reached such a state of disintegration that there is no reasonable prospect of the restoration of a normal marriage relationship between the parties it is important to have regard to what has happened in the past, that is, history of the relationship up to the date of trial, and also to the present attitude of the parties to the marriage relationship as revealed by the evidence at the trial.

Swart v Swart:  a marriage has broken down if one spouse no longer wishes to continue with the marriage.  The formation of an intention to sue for divorce is the subjective element in the method of determining marriage breakdown.  However, in order to assess the probability of a successful reconciliation being effected, the court also has to consider the reasons that prompted the plaintiff to sue for divorce, and the parties’ conduct.  Only when the court has determined that there is no reasonable prospect of reconciliation, will it find that the marriage has broken down irretrievably and grant a decree of divorce.  The court looks at the objective scantiness and surmountability of the reasons why a divorce was applied for to ascertain whether the marriage in question can still be saved.

Coetzee v Coetzee:  in order to succeed in a divorce action based on irretrievable breakdown, the plaintiff must prove that there has been a change in the pattern of the marriage from which breakdown can be deduced.  The inherent problem in this conception is that a divorce cannot be obtained in a marriage which was unhappy from the start and remained unhappy throughout.

Guidelines for irretrievable breakdown of marriage (section 4(2))

The guidelines are merely examples of instances where the probability is high that a normal marriage relationship no longer exists and that there is no reasonable prospect for the restoration of a normal marriage relationship.  However, these guidelines are neither exhaustive nor conclusive.

(1)   parties have not lived together as husband and wife for a continuous period of at least one year immediately prior to the date of the institution of the divorce action

Since the legislator requires an unbroken period of at least one year, it is clear that if the period was interrupted by periods of resumed cohabitation, the plaintiff would have to present more evidence to the court than the mere fact that they have lived apart for a year.

The consortium between the spouses must have been terminated. Even if the spouses have continued living together under the same roof there is no reason why the plaintiff cannot show that the consortium between them has been terminated.

If the plaintiff wishes to rely only on the spouses having lived apart for a year without adducing any further evidence in support of the divorce action, he or she would have to produce proof that the full period of a year has elapsed.  If the spouses still share the same dwelling, the plaintiff would have to prove the particular point in time at which the consortium came to an end.

(2)   The defendant has committed adultery and the plaintiff finds it irreconcilable with a continued marriage relationship

The test to determine whether the plaintiff considers the defendant’s adultery irreconcilable with the continuation of the marriage is clearly subjective.  If the plaintiff alleges that he or she cannot continue with the marriage, there is no way in which this allegation can be refuted.  There is support for the contention that it is not necessary to convince the court on a balance of probabilities that adultery was committed.  The plaintiff should however place some evidence of the adultery before the court.  A mere allegation that the defendant committed adultery would not be sufficient to ensure the success of the divorce action.

(3)   A court has declared the defendant a habitual criminal and the defendant is undergoing imprisonment as a result of that sentence

If the defendant has not been declared an habitual criminal, the plaintiff would have to adduce evidence other than the mere fact of the defendant’s imprisonment to prove that the marriage has broken down irretrievably.  In any event, in terms of section 4(2), a plaintiff may sue for divorce after a year’s separation, regardless of whether or not the separation resulted from imprisonment.

Incurable mental illness or continuous unconsciousness

The criteria

Section 5(1) – mental illness

1. The defendant has been admitted to an institution as a patient in terms of a reception order under the Mental health Act, or is being detained as a state patient or mentally ill convicted prisoner at an institution;
2. The defendant has not been unconditionally discharged from the institution or place of detention for a continuous period of at least two years immediately prior to the institution of the divorce action;
3. There is no reasonable prospect that the defendant will be cured of his or her mental illness.  This fact must be proved by the evidence of at least two psychiatrists, one of whom must be appointed by the court.

Section 5(2) – continuous unconsciousness

1.  The defendant must be in a state of continuous unconsciousness caused by a physical disorder;
2. The defendant’s unconscious state must have lasted for a period of at least six months immediately prior to the institution of the divorce action;
3. There must be no reasonable prospect that the defendant will regain consciousness.  This fact must be proved by the evidence of at least two doctors, one of whom must be a neurologist or neurosurgeon appointed by the court.

The requirements of section 5 need not be complied with in order to obtain a divorce order against a mentally ill or unconscious spouse.  A decree of divorce can be granted under section 4 if the plaintiff can prove that the marriage has broken down irretrievably.  Only in the most exceptional circumstances will a court make a forfeiture order against a defendant whose mental illness or unconsciousness is the reason for a divorce which is granted in terms of section 4.

Special rules which apply in terms of the Divorce Act:

(a)   Section 5(3)

The court is empowered to appoint a legal practitioner to represent the defendant at the court proceedings, and to order the plaintiff to bear the costs of the defendant’s legal representation.

(b)   Section 5(4)

The court may make any order it deems ft in respect of requiring the plaintiff to furnish security for any patrimonial benefits to which the defendant may be entitled as a result of the divorce.

(c)   Section 9(2)

Forfeiture of patrimonial benefits may not be ordered against a defendant if the marriage is dissolved on the ground of the defendant’s incurable mental illness or continuous unconsciousness.

(d)   Maintenance

The plaintiff may indeed claim maintenance from the mentally ill or unconscious defendant if he or she qualifies for maintenance in terms of section 7(2) of the Act.

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in law and 13 years as a practising attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters and international divorce law.

Divorce and the forfeiture of your assets

The case of JW v SW 2011 (1) SA 545 (GNP).

In a divorce action the plaintiff (Wife) claimed forfeiture of the defendant’s (Husband) patrimonial benefits of their marriage in community of property in terms of the Divorce Act 70 of 1979, s 9(1). The defendant counter-claimed for an order, in terms of s 7(8) (a) of the Act, that he was entitled to a share in plaintiff’s pension-fund benefits. When the parties entered into the marriage, the defendant brought immovable property into the estate with improvements, in the form of a house. The wife brought no assets into the marriage, but effected renovations to the property in respect of which she alleged the husband made no contributions. The wife had been in continuous employment for 25 years and had built up a pension interest, whereas the husband, due to his erratic employment history, had built no such interest.

The Court found, that, before the issue of whether a benefit was undue arose, it first had to be established that the party, against whom an order of forfeiture was sought, would in fact benefit if the order were not made. Only if the nature and ambit of the benefit were proved, could the court decide whether it was undue or not.

The Court found, further, that a party could only benefit from an asset brought into the estate by the other party, not from his own — a fortiori, such a party could not be ordered to forfeit her/his own asset. The wife only proved the value of the house when the divorce proceedings were instituted, but not what the house was worth when the parties entered into the marriage. The wife had therefore not proved the extent of the husband’s benefit on the dissolution of the marriage.

The Court found, further, that s 7(8) (a) of the Act conferred a discretion on the court in considering an order in terms thereof. Such discretion had to be exercised judiciously, taking into consideration all relevant factors, including fairness. It was fair and just, in the circumstances of the case, that no order be made in terms of s 7(8) (a) of the Act.

The wife’s claims for forfeiture of the benefits arising from the marriage, and the husband’s counter-claim for an order in terms of s 7(8) (a) of the Act, were both dismissed.

About the author – Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in law and 13 years as a practising attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters and international divorce law.

http://www.divorceattorney.co.za

 

How not to tell your spouse you want a divorce

The cruellest way you can tell your spouse you want out of the marriage is to never mention that you are unhappy and then, one day quite out of the blue say, “I’m not happy. I want a divorce.” I call this a “hit and run” way to tell your spouse you want out of the marriage and, in my professional opinion, it is the most hurtful, hateful and heinous way to exit your nuptials.

Those on the receiving end of this proclamation would surely agree with me. A hundred per cent of the people who come to see me after their spouse has dropped this two ton bomb on them have been nothing short of devastated, bleary eyed and incapacitated–often for a long time. What, when and how you tell your spouse you want a divorce will depend greatly on whether the two of you have had any previous conversations about divorce.

Couples who have been mutually unhappy or have had conversations using the “D” word will obviously be less thrown off than those who didn’t see it coming. One woman described the day she was told this way: “My biggest concern that morning as we went to work was what we would be having for dinner that night.” She had no idea that her husband was even unhappy, let alone that he was thinking of leaving. It makes me wonder why so many people take this strategy. What could they be thinking? Or not thinking? Feeling? Or not feeling? While there are always exceptions to any rule, I have seen five main reasons why “hit and runs” are so prevalent. I’ve also included rebuttals to these reasons that demonstrate how the leaver actually ends up getting the opposite result intended.

1) Fear: If I tell him I’m unhappy, he will go to pieces and I’ll feel guilty Where’s the logic here? Do you not see that if you LEAVE suddenly he will be more likely to go to pieces and you will feel more guilty?

2) Selfishness: I don’t care about her feelings. “I just want out!” Treating someone with this level of disrespect and disregard actually keeps you in longer and stronger because the person you are leaving is in shock and often can’t/won’t accept the fact that you really mean what you are saying and that you want out.

3) Impatience: I just want to get this over with! Again, the chances of exiting quickly or gracefully diminish drastically when you give your spouse no warning of your departure. Your spouse, who may be just starting the grief process, will delay the process interminably by having to have their emotions “catch up” to yours.

4) Lack of Courage: I’m a “rip the band-aid off quickly” kind of person because I can’t stand to hurt someone If this person had courage, they would have told their spouse way back when that they were not happy. They would have had the courage to do the work it takes on themselves and on the marriage; the courage to face their problems.

5) Sneakiness: Maybe I can live a double life and he’ll never find out It is often people who have been having an affair who take this tack in leaving their marriage. They have set themselves up with a new life and they are ready to move on. I’m sure there are other justifications people can come up with as to why they leave this way, but it only serves to make the process take longer, make the separation more difficult, make your spouse more emotional and perhaps even irrational and it is not the way you treat someone you exchanged vows with.

By Susan Pease Gadoua Author, Contemplating Divorce, A Step-by-Step Guide to Deciding Whether to Stay or Go Original article at: http://www.huffingtonpost.com/susan-pease-gadoua/how-not-to-tell-your-spou_b_820042.html

Compiled by Bertus Preller Divorce Attorney – Abrahams and Gross Inc. http://www.divorceattorney.co.za

Love and Money: Tie up the loose ends before you tie the knot

The major problem with an antenuptial contract is that it is drawn up at a time when divorce is probably the last thing on one’s mind.

Yet the contract governs what will happen to a married couple’s assets in the event of divorce or dissolution of the marriage. And it has implications for married life too. Moreover, it’s a bargain compared to what a wedding costs.

There are three types of marriage regimes in South Africa:

• In community of property – everything is pooled into a joint estate; husband and wife become owners of all assets at the time of the marriage, and all assets and liabilities thereafter. The advantage is economic equality; the disadvantage is there is no protection if one of the spouses becomes insolvent or is sued. The joint estate is then liable for the debts of both parties;
• Out of community of property before 1984 – it is common in such a marriage for one party to have significantly more assets than the other. For instance, the wife brought up the children, while the husband was the breadwinner. In the event of divorce in this instance, the courts have discretion to award a redistribution of assets;
• Out of community of property after 1984 - unless specifically stated in the antenuptial contract, such a marriage is subject to the accrual system; what is amassed over the life of the marriage is accrued. If a marriage out of community of property after 1984 with accrual is dissolved, the parties get an equal share of what they have amassed over the marriage, minus what they owe.

If accrual is expressly excluded, the parties have no claims against each other, other than for maintenance.

The advantage is that there is protection for spouses should the other become insolvent. Each spouse has his/her own estate and does not share in the other’s profit or loss. But not sharing in profits could be a major disadvantage for the spouse with a much smaller estate.

When drafting the antenuptial contract, the spouses can expressly exclude certain assets, such as a property or a share portfolio.

The advantage is protection should one of the spouses become insolvent. There is a fair division of profit accumulated during the marriage, but not prior to it.

Wealth, ignorance and poverty play a role in determining which format is chosen, said Bertus Preller, a divorce and family law attorney at Abrahams & Gross. Most married couples from a poor or uneducated background marry in community of property because they don’t have the means to pay the fees for an antenuptial contract, or simply lack the knowledge.

Preller said marriage out of community of property with the accrual system is perhaps, the fairest marriage system for most couples.

One of the advantages of an antenuptial contract is that there is nothing preventing one spouse from making a donation to the other – there is no donations tax between husband and wife – provided that the donor is solvent and that the donation doesn’t render him/her insolvent.

This is the only regime that allows for tax-free donations between spouses.

The reason for the accrual system is, essentially, to protect the wife.

One’s circumstances will usually dictate what marriage option to choose. In a second marriage, for example, the couple may be in their 40s or 50s and exclude accrual altogether. There may be children from earlier marriages. Accrual would affect what children inherit.

To be valid, the antenuptial contract must be signed by both parties prior to the marriage before a notary public. It must be registered at the Deeds Office within three months of marriage.

Attorneys’ and/or notaries’ fees to draft and register a simple antenuptial contract vary between R1000 and R3000.

To change it, the parties must make a court application and place adverts seeking creditors’ approval. The cost is between R10000 and R20000.

Source: Times Live

About Bertus Preller:

Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in law and 13 years as a practising attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters and international divorce law.

Divorce, moneys lent and advanced to the other spouse

It is not uncommon for parties in a marriage to advance to advance to the other spouse amounts of money from time to time. Between the two spouses this would normally be regarded as a transaction of borrowing money or lending, but the legal implications might be otherwise depending on the matrimonial system (married in community or out of community of property) applicable to the marriage.

Where the spouses are married to each other in community of property, the joint estate is divided on the date of divorce as it exists on date of divorce, including all the assets and liabilities. Parties who are married in community of property obtain an undivided half share in all the assets which constitute the joint estate and in most instances become jointly liable for all debts incurred. So if the spouses were married in community of property and enter into an agreement in terms whereof the one party lends an amount of money to the other, the right to claim such an amount is an asset of the joint estate and the liability to pay the amount is a liability of the joint estate. It therefore follows that it is impossible to enforce such a claim on divorce as a result of the fact that the parties are married in community of property.

Where spouses are married out of community of property it is possible to claim as a result of the fact that the parties are married out of community of property and does not share in the profit or loss. The right to claim such an amount would be an asset for purposes of determining the value of a spouse’s estate.  Where parties’ were married before 1 November 1984 a claim in respect of moneys lent will form a basis of a claim to claim a transfer of assets in terms of section 7 (3) of the Divorce Act. Where parties married after 1 November 1984 a claim to recoup moneys advanced would be simple if proved.

It is also interesting to note that a claim for moneys advanced where the parties married out of community of property, cannot prescribe in terms of the Prescription Act 68 of 1969.

It is therefore important to note that where a party is married in community of property and that party advanced moneys to the other spouse that a claim cannot be instituted for the recovery thereof.

Bertus Preller

Family Law Attorney

Abrahams and Gross Inc.

www.divorceattorney.co.za

info@divorceattorney.co.za