Divorce Attorney Cape Town

Rebuilding Your Financial Life After Divorce


After Divorce Divorce

Divorce is one of the most upsetting events a person can go through. It raises emotions such as hurt, anger and distress that are hard to control, and it can take a long time to recover fully. Everyone knows how annoying and emotionally difficult divorce can be, but often we overlook the more logistical challenges of separation.

Divorce brings major adjustment to nearly every aspect of your life, including your financial stability and future goals. Without a doubt, your life will be changed. But adjusting to and even accepting the changes will help you to get back on your feet faster and more effectively. You will now be fully in control of your own financial portfolio, which involves keeping a careful eye on your income and expenses, paying your own accounts, saving for university if you have children, and planning for the savings and investments you will need to enable you to succeed.

The list of responsibilities may seem a bit intimidating at first, particularly if you were not really involved in the family finances while you were married. But by learning along the way, you will likely find that it is empowering to make your own financial decisions and to be in control of your own destiny.

Things you should do post-divorce

Draft a new will

The law gives you a three-month window period after your divorce in which it is assumed that it is your intention to disinherit your ex-spouse. If you should pass away during that time, and you had not amended your will, a court will assume that you were going to. If, however, you pass away after the three-month period and had still not amended your will, all your assets will revert to your ex-spouse.

Invest wisely

It is vital to protect your future needs by means of reinvestments. When a divorce is granted, a redistribution of assets takes place, where often one spouse will receive a lump sum or several instalments from the other. As the recipient of these funds, it is critical that you look to the future and make sensible plans that will take care of your financial needs. It is equally important that you structure any reinvestments in the most tax-effective way. There are many financial products to choose from and you need to invest wisely in order to generate an income or future growth from your capital. Make sure that you investigate the different advantages of lump-sum investments or savings plans for regular payments, whichever may apply.

Change your policy beneficiaries

It is vital that you also amend your beneficiary nominations on all of your life-assurance policies within the three-month window after divorce. After the three months, should anything happen to you, your current beneficiary nominations will stand. Not changing these may result in your ex inheriting from you years after your divorce.

Change your bank account

Open your own bank account if you had a joint account. If you had your own accounts it may be wise to change your passwords. In the event of your spouse passing away, his account will be frozen and you will not be able to access any of the funds until an executor is appointed and they agree to release funds to you as they deem appropriate.

Make a budget

Whether you were the breadwinner or a stay-at-home mother, your financial status will certainly change significantly as a result of your separation or divorce. To start rebuilding your life, you need to start with an income and expenses budget to ensure that you have a precise idea of what your new cost of living will be in future, with or without the children.

Work out a financial plan

Finding a new rich husband/wife should not be part of your financial plan. Do not rely on any new partner for financial security. Life may change in an instant and you may suddenly be faced with all the financial responsibilities once again. Make sure that you have a good understanding of your financial affairs. Develop a comprehensive financial plan. Contact your financial adviser to assist you in creating such a plan.

Manage your debt

Make sure that you have as little debt as possible post-divorce. This will guarantee that you have a good credit record. Being single again means you have a single income and therefore you need to plan your retirement carefully. If you have a bond, try to pay it off as soon as you can. Always pay surplus cash or bonuses into your bond account. This will save on interest paid over the long term and you will own your property sooner.

Manage your savings

Always have at least one extra monthly salary available for emergencies. An access payment on the insurance on your car in case of accident can easily cost R1 500 or more. If you do receive maintenance for your children, ensure that you have at least one month’s maintenance in a savings account, should your ex default by any chance.

Look at your risk portfolio

With a single income your risk in terms of liabilities almost doubles. Make certain that you have a medical aid or hospital plan. If you did not belong to a medical aid for longer than two years and you are older than 35, a late-joiner penalty may be imposed on your monthly premium and a waiting period may exist. Remember to arrange short-term insurance on your car and household contents, life cover and severe illness and disability insurance.

Decide how to invest your retirement funds

If you were awarded a portion of your spouse’s retirement fund, you have the option to either withdraw the funds from their retirement fund or to transfer the funds to your own retirement or preservation fund. If you take a withdrawal, there will be a tax implication, whereas if you transfer the funds to another approved fund, the transfer will be tax free, provided your tax affairs at SARS are in order.

Making provision for your own retirement is key. When you were married, you were either jointly involved in your retirement planning or it was something that was taken care of by your spouse. Now that you are divorced, you will need to review your plans and take sole responsibility for your own retirement.

If you are not currently a member of a pension and/or provident fund, a contribution to one of a new generation retirement annuity fund may be appropriate in the circumstances. Alternatively, you can invest in a savings plan until retirement. The capital can then be used to provide you with an income. It is always best to discuss the options you may have with your financial adviser.

If you were the main breadwinner and the retirement fund member, you stand to lose a sizable portion of your retirement fund as part of your divorce settlement, in which case you will need to make additional retirement provisions for yourself.

Secure your maintenance

See whether it is possible to secure your maintenance by a life-assurance policy in terms whereof you are the owner of the life of the maintenance payer. On claiming either disability or critical illness benefits on the life of the maintenance payer, the life-assurance company will pay the benefits in terms of the policy directly to you. In the event of the maintenance payer’s death, you as the nominated beneficiary will be paid and not the deceased’s estate. As the owner, you can also appoint a beneficiary. Ensure that you have sufficient life, disability and severe-illness cover on the life of the non-custodian parent to protect your and your children’s financial needs.

Change your marital status

Home Affairs will not register a further marriage if you are recorded as ‘married’ on the system. Take your divorce certificate to Home Affairs and ask them to amend your marital status. This normally takes three months to change.

Change your surname

A woman may revert to her maiden surname or a prior surname she legally bore, or may join her surname with that of her ex-husband’s as a double-barrelled surname. If you took your husband’s name when you got married, and it reflects that way in your ID book, then there is a process you have to go through via Home Affairs to legally revert to your maiden name.

When the mother of a child born in wedlock divorces the child’s father, and wishes to change the child’s surname to her maiden surname, to another surname she bore legally or, if she has remarried, to the surname of her new husband, the natural father’s written consent, unless waived by a competent court, is a statutory requirement.

From the book: Everyone’s Guide To Divorce And Separation, by Bertus Preller

Advertisements

Divorce – What every woman should know


Divorce - What women should know
Divorce - What women should know

Making the decision to divorce is a tough one, and the chances are it’s followed by an even more traumatic lead-up to the divorce, it is like a roller-coaster on an emotional track.

Women are mostly in the dark when it comes to the financial affairs of her husband and women are encouraged to gather as much financial information about their husband’s financial affairs before the divorce proceedings commence, to establish the magnitude of the estate.

It is extremely important for any woman to know what’s going on in her husband’s financial affairs. It’s difficult when you don’t have access to his share portfolio or balance sheet, but one must reasonably expect to get an idea of financial affairs.

An attorney cannot negotiate on behalf of a spouse without knowing in advance what the estate is worth.

In many divorce settlements, the wife ends up seeing what the estate is worth only late in the divorce process.

16 Important points to consider in divorce:

  1. Make copies of your husband’s bank statements, credit card statements and get hold of the short-term insurance policies as well as copies of pension funds and retirement funds. This will provide input on the extent of assets available and the value of the estate.
  2. If you are married in community of property or out of community of property with the accrual you have to ask your attorney to build a clause into the settlement agreement to say if any assets that come to light after the divorce settlement, you will be entitled to 50% of those assets and the husband will have to pay the legal fees involved in the recovery process of those assets when they do come to light.
  3. A more accurate sense of assets will come to light if the divorce is contested as parties are required to disclose any information to do with financial affairs. In terms of the court rules the husband can be required to make full disclosure of his assets and liabilities and you will be able to obtain all financial information spanning over a period of 3 years or more, including bank statements, credit card statements, investments etc.
  4. Women are advised not to leave the matrimonial home if there are minor children involved, because it provides a sense of stability for the kids. It’s better for the husband to leave if the husband is not the primary caregiver. If a husband makes himself guilty of abuse, the wife can get a restraining order to evict him from the property under certain circumstances or restrain him to enter certain areas of the house.
  5. Where the parties are married in community of property the wife is entitled to half the pension or retirement annuity fund. In a marriage out of community with the accrual, the pension fund will be regarded as part of the husband’s assets for purposes of calculating the accrual that the wife will be entitled to.
  6. In terms of the Divorce Act, the wife (if married in community of property) can choose to ask for the pension fund money to be paid in cash, or transferred to a pension fund of her choice.  Normally pension funds pay out the wife’s portion in 3 to 6 months after the divorce.
  7. Make a list of your monthly income and expenses, as if you’re going to live on your own with your children. It’s important because you get situations where the wife is not working or earns much less than the husband and doesn’t have the money to fight a divorce battle.  She can bring an application pending a divorce, for interim maintenance, which means contributing maintenance before the divorce is finalised. She can also apply for contribution to her legal expenses. If interim-maintenance is granted and the husband does not comply with the court order, he is in contempt of court.
  8. In some instances the wife can apply for emergency monetary relief in the magistrate’s court pending the institution of an application for interim maintenance by utilizing the provisions of the domestic violence act because the husband has blocked the use of credit.
  9. Interim maintenance falls away once the divorce order is granted. There have been situations where the wife has been granted very favourable interim maintenance terms, so sometimes a divorce is stalled  in order to continue getting a hearty amount of money each month.
  10. The granting of interim maintenance in a Rule 43 application cannot be appealed. The only way the husband can minimize this is if he goes back to court and explains and proves that his financial situation has changed so much that he’s entitled to a reduction. But this does not happen easily.
  11. Many battles in a divorce surround the children. Normally the wife is the parent of primary residence and the husband the parent of alternate residence. Increasingly, there’s a shared parenting approach with children staying with the mother for a week and then the father for a week and each party takes care of the children during that period.  I see a lot of children used as a pawn. It is important to get a parenting plan in place as soon as possible, and register that with the family advocate and stipulate that if issues arise with parenting and the children the parties need to go to a psychologist or a social worker to facilitate contact.
  12. In matters where money is not fought over, it may make financial sense to go to one lawyer who can work for both parties. But a divorce that is acrimonious requires that each party needs a lawyer to assist.
  13. A few mediation organizations exist where people can see a mediator to resolve disputes, to settle with both parties. The mediator doesn’t have the authority to issue and award for damages but he can facilitate the settlement process. If an abusive husband is involved, mediation is unlikely to work.  But it can work if the divorce is not acrimonious. Normally the spouses have to pay the costs of a mediator 50/50. Sometimes this route can be more expensive than an uncontested divorce, depending on the amount of sessions that the parties have to attend.
  14. Where a couple owns a property together, they need to decide whether both parties want to keep the interest in the property, sell the property and split the proceeds, or whether one wants to buy out the other. The decision has financial implications because of transfer duties and tax.
  15. It’s important to consider instances where the husband has no real assets. An insurance policy should be taken out in the event that the husband passes away and there is no money to help cover maintenance, in case of his death.
  16. The decision to divorce is always a business decision. You need to look at what happens until the children turn 21 or becomes self supporting, that there’s maintenance, medical cover for them, a school education and whether it’s government or private school and tertiary education.

About the Author:

Bertus Preller is a Divorce Attorney at Abrahams and Gross in Cape Town, a law firm that has been in existence since 1935 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 in and handles divorce and family law matters across South Africa. Bertus is also the Family Law expert on Health24.com, he blogs regularly on news24.com and nuus24.com and has been quoted on Family Law issues in various newspapers such as the Sunday Times and Business Times and magazines such as Noseweek, Keur, Living and Loving, Longevity, You and Huisgenoot, and also appears frequently on the SABC television show 3 Talk. His clients include artists, celebrities, sports people and high net worth individuals. 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.

Contact details

bertus@divorceattorney.co.za

O: 021 422 1323

Court confirms ex-spouses access to government pension fund in divorce


The Constitutional Court on Friday confirmed the declaration by the Western Cape High Court of the constitutional invalidity of the “clean-break” principle of the Government Employees Pension Law.

This case highlighted the plight previously experienced by people married in community of property and whose spouses were, upon divorce, members of the Government Employees Pension Fund (Government Pension Fund) established under the Government Employees Pension Law (GEPL).

Under the matrimonial laws, non-member spouses could, in certain circumstances, be entitled to payment of part of the pension interest due or assigned to the member of the Government Pension Fund when any pension benefit accrued to that member. Prior to the Government Employees Pension Law Amendment Act (GEPL Amendment Act), the non-member’s benefit would be frozen on divorce until any pension benefit accrued to that member, unlike that of a counterpart under the Pension Funds Act (PFA). The effect of this was that non-members could not benefit from any interest or capital growth on the portion of the pension interest allocated to the member spouse – thus resulting in the portion devaluing over time.

Invoking the equality provision in the Constitution, the GEPL was originally challenged by the applicant on the ground that it did not afford to a former spouse of a member of the Government Pension Fund the same rights and advantages that are afforded to former spouses of members of funds subject to the PFA. The applicant also sought a constitutional remedy of reading in certain provisions of the PFA into the GEPL together with an order for costs.

Parliament passed the GEPL Amendment Act to cure the defects in the GEPL. As such the Constitutional Court did not pronounce on the constitutional issues in this matter. As a result of this legislative intervention, a question arose whether any live constitutional issue requiring determination by this Court was extant.

There are two parallel regimes of pension funds at play: first, those private funds governed by the PFA and second, government funds which are not governed by the PFA but, rather, by a statute unique to that fund. This latter class of government funds includes, but is in no way limited to, the Government Pension Fund.

During 1989, section 7(7)(a) was added by the Divorce Amendment Ac to deal with certain problems. Under the Divorce Act non-member spouses were, in certain circumstances, entitled to payment of part of the pension interest due, or assigned to, the member of the Government Pension Fund when any pension benefit accrued to that member. A pension interest which had not yet accrued was not considered an asset in the spouse’s estate. To cure this defect, the amendment provided that a pension interest is deemed to be an asset in the estate for the purpose of determining patrimonial benefits.

The Divorce Amendment Act was, however, not without difficulties. One was the question of when the payment of a pension interest should occur. Generally, this depended on the rules of a specific fund but usually took place on retirement, dismissal or some other defined “exit event”.

The problem was that a non-member spouse would be severely prejudiced if the value of his or her benefit was frozen at the date of divorce and the beneficiary would have had to wait for a later exit event.

To cure this defect, various amendments were made to the PFA, in particular, the Pension Funds Amendment Act, which incorporated the “clean-break” principle into section 37D of the PFA. The effect of this amendment is that the non-member spouse no longer has to wait for an exit event to occur. This means that a pension benefit awarded to a non-member spouse in terms of the Divorce Act is deemed to have accrued on the date of the divorce. This demonstrates the interplay between the Divorce Act and the PFA.

The oversight, however, was plainly that these amendments only apply to the PFA and, by extension, to funds that are governed by the PFA. As mentioned above, this is only one leg of the parallel regime. The Government Pension Fund could not benefit from the clean-break principle, as it was governed by its own statute, the GEPL.

In its amended form, section 3 of the GEPL Amendment Act introduces a clean-break principle by incorporating section 24A after section 24 of the GEPL. Section 24A is, in effect, similar to section 37D of the PFA.

Section 24A authorises the Government Pension Fund to make payment of a pension interest upon divorce or dissolution of a customary marriage.

Non-members of the GEPF were denied their share of the pension benefit immediately upon divorce or on dissolution of a customary marriage. They had to wait until their member and former spouse became entitled to his or her pension benefit. This was the subject of a challenge in the Western Cape High Court.

The Applicant Mrs Wiese submitted that it was unfair for the GEPF not to allow her access to the pension benefits that were awarded to her in terms of a divorce order. The High Court found in her favour and declared it unconstitutional as the GEPF failed to give former spouses of members the same rights as those afforded to spouses of members of pension funds falling within the ambit of the Pension Funds Act.

It granted Parliament a year to amend the Government Employees Pension Law so that the GEPF could amend its rules.

The High Court’s declaration was referred to the Constitutional Court for confirmation. The suspension of invalidity was appealed by Wiese.

While the proceedings in the Constitutional Court were pending, Parliament amended the law. Wiese and the GEPF agreed that the amendment disposed of the main issues before the Constitutional Court and the matter had become moot.

The court found that although the absence of a live controversy did not constitute an absolute bar to justifiability, the matter had become moot in the light of the amendment. It could still consider the question of costs.

REASONS WHY A PENSION FUND MAY REJECT A DIVORCE SETTLEMENT AGREEMENT


Never rush into a division of retirement savings in a divorce settlement.

Divorce settlement agreements or court orders that award a share of a fund member’s retirement savings to a non-member spouse are rejected by retirement fund administrators for various reasons, including the court order not stating the name of the fund.

Where a spouse belongs to a number of retirement funds (for example, a pension fund and a provident fund), it may not be clear against which fund the divorce order can be enforced, especially if the order states only the words “the fund” instead of the words “the funds”.

  • Date of divorce

The situation where the date of the divorce is after the member spouse left the fund complicates the issue. The definition of a “pension interest” in the Divorce Act has a connotation that, in order to calculate the pension interest, the member has to be in active employment and active fund membership at the date of divorce so that it may be deemed that he or she has resigned on the date of divorce and his or her former spouse is now entitled to a portion of his or her fund benefit as at that date.

But, if your employment (which is a condition for fund membership) already terminated at the date of divorce, then you cannot be deemed to have resigned at the date of divorce and your former spouse cannot be paid a portion of what would have been your fund benefit at the date of divorce.

  • Decision-making

A non-member spouse is at liberty to make a decision in terms of the divorce settlement agreement. It happens frequently in some divorce orders that the non-member spouse, as part of the divorce settlement, is compelled to preserve the benefit and is being forced to transfer the benefit to a preservation fund.

In terms of the Pension Funds Act, a retirement fund is compelled to give the non-member spouse the right to decide how the pension interest award should be paid out to the member. On presentation of a valid divorce order, the fund has normally 45 days to request the non-member spouse to decide how the pension interest due to him/her must be paid. The non-member spouse has 120 days in which to make a decision.

If the decision is made in terms of the divorce settlement agreement and the fund is not made a party to that agreement, the fund cannot enforce the provision.

  • Interest on the benefit

In terms of legislation, no interest is payable in the first 120 days from the date of the divorce to the date on which the non-member spouse decides what to do with his/her share of the benefit. Interest is added only for periods exceeding 120 days. This should be reviewed to allow interest to be payable from the date of the divorce, because, when markets are volatile, it can make a difference to the non-member spouse or the member spouse.

Before obtaining a divorce, both the member spouse and the non-member spouse should ask the retirement fund or its administrator about the current fund value and the present value of the pension interest – these two values may differ – to ensure an equitable division of the assets.

Frequently the member spouse is reluctant to co-operate in this process, but the non-member spouse is entitled to ask the fund for the relevant information. If the fund is not prepared to divulge the information, the non-member spouse may be entitled to it in terms of the Promotion of Access to Information Act.

The current fund value is the amount typically reflected on a benefit statement and indicates the value of the member’s investment – the rand value of all the assets in the member’s underlying portfolios on a given date in a defined contribution fund or an RA fund, or the actuarial reserve value (the amount notionally held by the fund to provide for the future retirement benefit) in a defined benefit fund.

In most defined contribution funds, the resignation benefit will equal the current fund value, but this may not be the case in defined benefit funds. In retirement annuity (RA) funds, because the pension interest consists of contributions plus simple interest, the effect of compounded returns usually means that the current fund value will be significantly higher than the pension interest.

If sufficient uncertainty exists as to which fund is in fact intended, the divorce order will not be enforceable. Orders are frequently obtained in which the insurance company that sponsors or administers the pension fund is mistakenly cited instead of the fund. It is not sufficient to refer to the sponsor or administrator (for example, the Old Mutual pension fund), as these financial institutions typically operate several funds.

The law provides for two separate systems for a non-member spouse to access a member spouse’s pension on divorce.

These are:

  • Ordinary matrimonial law – The principles of ordinary law concerning the division of assets on divorce cover pension benefits that have already accrued to a fund member at the time of divorce. An example of an accrued benefit is where a member has retired from a fund and has been paid a lump sum benefit and/or a monthly pension at the time the divorce order is granted.
  • Section 7(7) of the Divorce Act – In terms of an amendment to the Divorce Act, a non-member spouse is entitled to share in the assets of a pension fund member where the benefit has not accrued to the member at the date of the divorce.

Divorce and the impact of the recession – Sunday Times Article


While financial matters are one of the biggest strains on a marriage and a primary cause of divorce, the divorce rate has declined during the recession.

This, say some experts, is because getting divorced is costly, especially so when times are tough. Moreover, most lawyers require a deposit before they will consider a case.

People would rather hold back on divorce proceedings because of the cost involved. In many cases when there is a strain on the marriage, the main breadwinner will not disclose some sources of income or other financial details, which makes it very difficult for the other spouse to file for divorce. By default, this results in the couple staying married.

Couples have been choosing to separate or to stay together in an unhappy relationship. Most of the complaints, especially by women, are that they cannot afford to get divorced and are unsure whether they will be financially secure after divorce.

The economic climate is not that good, and people still have a lot of debt. Some people can’t afford to get divorced because of that.

Bertus Preller, an attorney at Bertus Preller & Associates, says couples are being coerced into staying together for pragmatic financial reasons.

Maintaining two separate households while relying on the income once used to support a single household can be very difficult when times are tough, he says.

“I also think that our challenging financial climate may have prompted individuals to reconsider the role of marriage by thinking more of it as a quest for financial stability than a quest for finding a soulmate.”

In a US survey in which 1197 married couples were asked how their relationship had changed during the recession, a third said their marriage was at a high risk of divorce through added financial stress, while 38% of couples who had been considering divorce delayed their plans because of the costs, including legal fees and setting up separate households.

About 30% said the struggle of surviving the recession had brought them closer to their partner as they weathered the storm together.

More than half of the 1600 attorneys who are members of the American Academy of Matrimonial Lawyers reported a 40% downturn in their business in 2009, a phenomenon the New York Daily News described as “sleeping with the enemy”.

Those same lawyers are now being inundated with new clients as financial stability returns. The Financial Times reported that, in a signal of economic recovery, the US divorce rate was growing.

A stronger economy, lower unemployment and a housing market that is stabilizing are contributing to a rise in divorce filings.

“There is a definite increase in divorce instructions this year in comparison to 2010,” says Preller.

“From this, one may assume that the economy is slowly starting to pick up and, unfortunately, the divorce rate is too.”

Article by: Adele Shevel – Sunday Times: http://www.timeslive.co.za/sundaytimes/article1064919.ece/Recession-puts-brakes-on-divorce

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 Bertus Preller & Associates 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.

Divorce and Finances some Tips by Divorce Attorney Bertus Preller


You wouldn’t think that a divorce attorney would be the first person to give advice on how best to prevent a divorce, but then, Bertus Preller, Family and Divorce Law Attorney at Bertus Preller & Associates Inc. in Cape Town isn’t your average divorce attorney. He is one of the most prominent divorce attorneys based in South Africa, having handled many high-profile divorces of television personalities, artists and sportsmen.

Preller shared some advice when interviewed by newsbreak.

The success or failure of your marriage relationship may hinge on how well you deal with issues such as finances, sexuality, communication, conflict, parenting, in-laws, leisure time, family of origin, spirituality, expectations, and chores.

When exactly is the best time to begin talking seriously about finances with your partner?

To me, the finance talk is a pretty comprehensive discussion about how you and your partner will handle the money that comes in and goes out of your life. If you come from two different “schools” on this topic, it can be a difficult discussion to have. For someone that’s more of a “spender” they may try to deflect having the conversation at all.  You have to talk about finances at two points in the relationship. The first is when you decide to move in together and blend households, and the second is if and when you merge finances. One should never wait when things are starting to get crappy and you’re already bickering about money. When things are harmonious, you sit down and talk about these things; it will engender feelings of love and trust. You just don’t do it when things are in turmoil.

What specifically should be discussed?

If you have credit card debt, what are your thoughts on it?  Is it something you view as a part of life, or is it somewhere in the future to get it paid off? If one has it and one doesn’t, will it be paid off jointly?

How do you feel about purchases that you can’t afford? Do you go into debt to get them or do you wait until you can pay for them?

How will your finances be set up? Will everything become joint, or remain separate?

How does each spouses’ salary come into play? If one makes more than the other, does that change the makeup of the financial relationship? Meaning, will that person have more say in financial decisions, or not?

I recently read an interview with Laura Wasser a prominent Divorce Lawyer in the United States who highlighted a couple of good pointers.

“Family. How much time and money are you going to want to spend on existing family? Do we want to start our own?

Hobbies. What about if he is a golfer and he goes on these extremely expensive golf trips and her hobby is painting and she buys a few oil paints every 3 years. I mean, those are the kind of things that need to be discussed.

Travel. I mean, obviously if you guys have been dating for a while, you’re going to know what each of you likes–is he a backpacker? Are you a spa girl? But at the same time, there are plenty of people who say, ‘look, I’m 40 years old, I don’t ever want to fly anything but business class again.’ That should be discussed.

Shopping. I still know women who have been married for years, but when they come home from a shopping trip they hide their bags in the car until their husband has gone out, and then they kind of bring them in piecemeal, and unwrap them and take tags off because they don’t want their husbands to know what they’ve been purchasing. So shopping–what’s the expectation?

Entertaining and Entertainment. If you’re going to have his work people over, your work people over, are you going to cater? Cook? If you have children, what are their birthday parties going to be like? Is he going to be offended if you want to have the birthday party catered or valet parking? And what are the expectations for spending on entertainment outside the home–concerts, movies, theatre, that sort of thing?

Charitable contributions. This is a big one. People like to be able to do what they want to do with their money. Many people have very strong feelings about what kind of charitable contributions they make. It’s important to have a conversation about how much of your income is going be put in there.

Meals. Are you going to cook at home or eat out most nights? If you’re going out, which caliber (and price range) of restaurant? Are you taking packed lunches to work versus doing expensive work lunches or lunches with the girls?

Savings and investments. How much of your income do you want to put away each year? If one person is spending all of their income on clothes, travel, hobbies, and entertaining, and one person is saving it, that may not be quite fair if and when you guys split up, depending on what the law is and what you decided to do.

Estate planning issues. Wills, life insurance policies. This is definitely more a marriage one–something to talk about a little further down the line. Maybe earlier on, you may want to deal with insurance, like auto and health. You don’t want to move in with someone and find out that they don’t have auto or health insurance. That’s a rude awakening.

Gifts. How much are you spending on gifts?

Home décor and home remodelling. Again, what’s the expectation?”

So your advice is taking this list and going through it, just as you would do with a financial planner?

Almost in the same way. Why wouldn’t you have such a conversation with someone you’re sharing your life with instead of with the person who is just getting paid to take care of you?

Why is it so important to have these conversations at the start of a relationship?

You will be amazed sitting from where I sit at the things I hear from people regarding the arguments that they’ve gotten into about finances. Bottom line, these are things that you don’t want to have resentment about later because they haven’t been discussed.

What if the financial circumstances change during the course of the relationship?

You have to constantly re-evaluate your circumstances. Check in either on an annual basis. It’s very interesting to see couples who have been married for a very long time and when and if they split up, one of them would say ‘I just had no idea that the situation was so dire!’ Whether things go up in terms of household economy or down, if you’re in it for the long haul, then you would tighten your belts together, and if things are good, you splurge together. Usually you here the women saying, ‘I’m so embarrassed but you’d have no idea what we spend, I have no idea what my husband makes. I just don’t know. I never worried about it.’ I think if you are going to be in a relationship with someone, you need to be able to share the responsibilities, the knowledge, and the worry. It’s not like it was when our parents or their parents were having lives where the mom worked in the kitchen and the husband worried about it and the wife didn’t know there was any problem. I mean, you should both be aware of what’s going on.

You need to continue to communicate and work together, always remembering you are working towards the same goal. You can do this by:

  • Communicating. As soon as you start avoiding talking about money with your spouse, or hiding new purchases then you are going to deviate from the plan, and it will be hard to get back on track.
  • Having money discussions. Instead, of ignoring issues with your finances, talk about it with your partner and if something isn’t working, work out why. You’ll then be able to find a solution together, and that is what marriage is all about.
  • Monitoring net worth. Your net worth is a good indicator of how well you are sticking to your budgets and financial plans, and as a couple you should revisit your net worth each month to make sure it is going up and not down.
  • Revisiting your goals and plans. It is all very well to make plans for the future, but we all know that unexpected events can pop up and change these plans. Therefore, make sure you continue to track your progress towards your goals, and readjust your ideas for the future if necessary.

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 Bertus Preller & Associates 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

%d bloggers like this: