Financial Planning

Separated! What are the next steps?

There are a few legal and financial matters that you would have to become familiar with before you divorce! Once you have decided on divorce no matter what the reason, it would be smart to get through the process as soon as possible. This will give you the opportunity to re-settle and find some stability sooner rather than later and it also leaves anger out of the equation.

 

“Divorce is a financial transaction with one key differentiating emotion – MONEY!”

 

Don't let your emotions or your desire to finalize your divorce stop you from thoroughly analysing both the short- and long-term financial and tax implications of any proposed divorce settlement.

 

The only way to know that is to work with an experienced divorce financial planner who can analyze your various divorce settlement options to make sure that your financial future will be secure.  Make sure you get sound financial advice!

 

STEP 1:

Understand your marriage regime; make sure you have a copy. Read it and understand what your rights are.

In Community of Property

  • If you don’t sign an ANC (ante nuptial contract), you are automatically married in community of property. Under this contract, each partner immediately owns half of the joint estate. However, they are also each responsible for one half of their joint debt.

 

Out of Community of Property

 

The Accrual System

  • Under this arrangement, what you brought into the marriage is stipulated and it remains yours. If you get divorced, the increased value of both partners’ assets is added and divided by two with each partner due half the value.

 

STEP 2:

 

Rule 43

  • Once your spouse has left the communal property, he/she still has a financial obligation towards you and your children. If you find yourself under financial strain you can apply for interim financial relief, this is called a Rule 43. The cost will possibly be between R8000 to R10 000, depending on your lawyer and advocate.
  • This is a High Court rule that provides for interim financial relief in divorce matters and it will also give rules with regards to custody and access of children.  Rule 43 is enforceable until the divorce has gone through.

 

STEP 3:

Child Maintenance

Do the maths, the decisions you make now will have a significant impact on the rest of your life. Try to set your emotions aside - if you don’t know where to start ask for financial advice! In a divorce where minor children are involved the one area of the divorce settlement is a child maintenance agreement. You need to know how much you spend on your children per month.

 

  • Draw up a child expenses budget to calculate your monthly expenditure.
  • Remember that your kids grow from toddlers to teenagers. This means that the plastic cricket bat becomes a R1500 GM cricket bat. Specify who pays for what.
  • If your divorce order states that your ex-spouse is liable for R3000 pm per child, medical expenses and 50% school fees, this becomes a court order. If your ex-spouse refuses to pay his 50% of school fees for whatever reason, it is a criminal offence.
  • A formula is used to calculate child maintenance.
  • Secure the monthly maintenance with a cession of an insurance policy on your ex-spouses life in case he/she is disabled or dies.
  • See to it that your Divorce Settlement Agreement is drafted in such a way that you can enforce a garnishing order on your ex-spouse’s salary should he/she default on payments.

 

Please read our  article regarding Rehabilitative Maintenance, Pension Fund Claims, Parenting Plan and Mediation.

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