Love is what gets couples in front of the altar. But when the passion fades and relationships get rocky, the dreaded ‘big D’ often rears its ugly head.
“It’s unfortunately a time when many are pressed to get as far away from each other as quickly as possible. The trouble is that when emotions take over, hasty decisions are made. It is only when things have cooled down that the actual financial cost of a divorce becomes obvious,” says John Manyike, Head of Financial Education at Old Mutual.
“The costs begin with changing living arrangements, followed by legal fees. If a senior family law attorney is involved, costs can range from between R 2, 000 and R 3,000 an hour. Add the unavoidable fees of an advocate, costs rise even faster. If the couple fights about a settlement, the cost can be in hundreds of thousands of Rands or even millions. The sad reality is that stress, anxiety, and the determination to emerge as a winner usually results in everyone becoming financially poorer “the longer you disagree you both lose.
Throw children into the picture, custody becomes an issue, costs rocket as actions such as child or spousal maintenance battles and protection orders that must be resolved before the divorce proceedings begin.
“The result for personal finances can be devastating and long-lasting,” Manyike warns.
Marriages involving ante-nuptial contracts often provide some financial cushion as these agreements are used to guide the distribution of assets in the event of a divorce or death.
An Antenuptial contract also functions as an estate planning tool, more than anything, that sees spouses as two separate legal entities. Securing your property or other assets before the wedding ceremony protects your assets before and during the marriage.
“Nobody gets married with divorce in mind. However, an antenuptial contract is the easiest way of ensuring that if you part ways, each partner keeps the assets they brought into the marriage,” says Manyike.
But the surest way of resolving this marriage crisis with dignity and enough cash to get started again is to set arguments, egos and ill feelings aside and talk to each other. In opting for divorce, mediation can be a win-win solution that cuts stress and reduces parting costs. The problem starts with one of the parties trying to outsmart the other and trying to gain more assets than the other. Consider the fact that your health is also more important than material things.
By taking the mediation route process, either with an attorney or faith-based counsellor, both parties work to reach an agreement on the issues that have emerged from the decision to divorce. All aspects of the divorce are discussed, and terms are agreed and presented in court. This becomes an uncontested, and the official parting is finalised within a few months at the least cost.
Mediation has several benefits:
- It is cost-effective and affordable.
- The quicker the agreement is reached, the fewer sessions are needed, and the lower the cost.
- Having an attorney or faith-based counsellor mediate means that better decisions are made.
- Discussions encourage mutually beneficial talks and final settlements.
Ultimately, once the decision has been taken to call it a day, the most important discussions and disputes will be about money.
“It is also advisable to relook your finances and take practical steps, including redrafting your will, and ensuring that your life insurance policy beneficiaries are appropriately updated,” Manyike says.
Additional steps such as setting up trusts for children could also be considered and involving a qualified financial advisor and estate planner could help re-establish your post-divorce life.
Article provided by: www.oldmutual.co.za
