3 Financial Considerations For Couples Going Through A Divorce
Divorce is an emotionally turbulent experience. Getting expert financial advice, before the settlement, can be an anchor in a trying time.
Published: Sunday, May 14th 2017
Whether it’s based on historic roles and responsibilities, or plain old genetics, it’s clear that men and women manage their money differently. So, in the unfortunate case of divorce, what should each, or both parties, be considering regarding their finances?
Financial Advice For Couples Going Through Divorce
Personal finances are already a touchy subject. Add to that the pain of divorce and you’ve got a minefield to navigate. In South Africa, more than one in three marriages will end in a formal divorce. That is a lot of people having to split their finances, their homes, etc. Collectively, it’s called splitting the marital estate. And, you would not have known that had you not sought the appropriate help.
Americans and Australians are advised to consult a specialised divorce financial planner. But, in South Africa, all financial advisors should be well versed in divorce proceedings. There are a number of financial implications of divorce that are often overlooked, misunderstood, or underestimated by one or both parties. That’s why it is important to take every consideration to give your finances, and your post divorce life, due diligence with the help of your financial adviser.
3 Financial Considerations To Make Before The Divorce Order
1. Consult Your Financial Adviser Before Your Divorce Attorney
Former financial planner at Citadel Wealth Management, Nicky Gous, said in an article on the subject that couples often only consult financial planners after the legal process of a couple’s divorce settlement has been concluded. She said that, although divorce is likely to alter your financial as well as your emotional state, having a financial expert at your side can offer a real sense of financial stability.
“Proper planning, and a coherent strategy, can provide you with an immediate sense of accomplishment that will have a positive impact on everything else,” says Gous.
He adds that a financial planner can help you determine your post-divorce costs before you start to negotiate the divorce settlement.
Your financial adviser will help you draw up all of your assets and liabilities. Including your pension or retirement provisions. They will then split it according to the chosen marital regime (i.e.: community of property, ANC, etc.).
2. Get Your Own Financial Adviser
Legal adviser at Sanlam Trust, Clive Hill, says that it’s important both parties have their own financial advisers and attorneys. He describes having two specialists who, together, can devise the best possible divorce settlement, as “invaluable”.
CLICK BELOW to read about 5 questions you should ask your financial advisor before deciding on them.
3. Don’t Take The Budget Set By A Financial Adviser For Granted
Independent financial planner and 2015 Financial Planner of the Year, Wouter Fourie, says spouses often do not fully comprehend the financial implications of divorce.
Once you know what assets you will receive, or have to give up, in terms of the divorce order, your marital regime, and your maintenance obligations, you will have to rework your budget and re-organise your finances.
Fourie says a financial planner can help you to work out a cash flow and a budget. And, Gous adds, that he or she can take you through a variety of scenarios to provide you with an insight into what different settlement terms will mean in the long term. This includes scenarios where maintenance orders are not honoured post settlement.