How to live happily ever after, after a divorce
When designing the fairytale dress, choosing favourite blooms and dreaming of romance, most brides would never align themselves with the sobering reality that one in three marriages in South Africa ends in divorce.
Despite the best intentions and efforts to live happily ever after, it’s wise to consider financial advice in approaching your ‘Big Day’ and embarking on your significant partnership. Citadel Advisory Partner, Kirsten Smith, navigates through the important points to contemplate to ensure that there is a still a happily ever after, after a divorce.
LOOK AT THE BIGGER PICTURE: HOW TO STRUCTURE YOUR MARRIAGE CONTRACT
“Your marriage contract essentially determines how your assets will be divided should the marriage come to an end – either through death or divorce,” says Smit. Thinking about the demise of your marriage before it’s even begun is awful, but it is essential to plan properly to ensure that you are not ruined financially if the marriage comes to an end. “Your marital contract options need to be carefully considered before getting married. It is a tedious and expensive process to change a marital regime,” she adds.
Smit also recommends that it’s worth the expense to consult a financial or legal advisor to explain the different marital contracts available and give guidance in terms of what would work best for you.
ANALYSE YOUR FINANCES FIRST
“It is vital that you take an active role in financial decision-making within the marriage from the outset,” advises Smit. Both man and wife need to be fully aware of all the assets – including trusts, property and share portfolios and inheritances. Full disclosure and honesty extends to everything in a marriage.
“Always analyse your financial situation independently, as though your partner weren’t around. This is the only way to ensure that you’re going to be financially secure if the marriage comes to an end,” says Smit.
If your financial stability is threatened, take immediate steps to change this. For example, you can start earning an income or work at increasing your existing income; reduce your monthly expenses and save more; ensure that you have sufficient risk cover in place; consistently check that your will is up-to-date and that your estate planning is sound. “Make every effort to empower and educate yourself about investments and good financial practice,” adds Smit.
DETERMINE THE COSTS OF YOUR LIFESTYLE WITH A FULL BUDGET
Whether you are happily married or pending a divorce, it’s recommended to work with a financial advisor to help establish a range of financial provision – including all aspects of your current married lifestyle. Consider the minimum amount required for your monthly expenses, as well as the ideal number.
“A divorce has considerable impact on monthly costs since you as an individual may be covering a large number of costs that might usually have been shared, such as school fees and DSTV,” says Smit.
It is vitally important to be fully aware of what your cost situation is going to be post-divorce. In most cases, lifestyle adjustments are inevitable. You also need to factor in costs that may not have been necessary before, such as income protection cover. Smit adds that an accurate budget also helps with settlement negotiations, and ensures that you aren’t simply accepting what’s offered without thinking through things properly.
SELECT A DIVORCE ATTORNEY THAT FITS YOUR NEEDS
“Different attorneys have different approaches – some are focused on the settlement figure, while others are involved with mediation and reconciliation,” says Smit. She advises meeting with a selection of divorce attorneys before you make a decision, to get the best fit for you. Also ensure that you understand how their fees are charged and which party is responsible for payment.
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