January is traditionally known as the time for new beginnings and starting afresh. It has also become known as “divorce month” as many couples decide to go their separate ways around the beginning of the year.
Some of the reasons for taking this emotionally and financially fraught step include:
- Covid-19 fallout: Living under lockdown, sharing home and work space, home schooling, caring for ill family members, and adjusting to lower incomes have become too stressful for many couples to navigate.
- Holiday season: The year-end is when people take stock of their lives and decide to make changes. Many realise that their marriages are not working and conclude it will be best to dissolve the union.
- Family dynamics: Interacting with in-laws over the holiday break may highlight major differences between two families. Spending time with one’s own family may reinforce one’s own self-worth and give one the courage and support to make a major life change.
- Children: Many couples agree months beforehand to end their marriages, but delay filing divorce papers in order to have a final family holiday together for the sake of their children.
Some divorces are relatively amicable, but even a “friendly” divorce entails a major life change with huge emotional fallout. Many people fear the unknown as much of the support structure that has underpinned their lives is dismantled.
A divorce necessitates making major decisions at a time when a person is experiencing a great deal of anxiety and upheaval.
Given that the agreements made now will have an impact on you and your children for the rest of your lives, and that drafting a divorce order is frequently a complex matter, it is important to seek professional advice. The input of both an attorney and a financial adviser can help to ensure that you receive a fair settlement.
A couple with an ante-nuptial contract may have an easier journey. Some divorces can, however, take years to finalise when there is disagreement about childcare, maintenance, and asset division. A skilled mediator can help the parties reach an agreement in a shorter time, which saves costs, but at all times it is advisable to obtain the services of a well-qualified professional.
According to Statistics South Africa, 23 710 divorces were granted in 2019, mainly to people who had married for the first time. More wives than husbands filed for divorce, with husbands generally getting divorced at a later age than wives.
The provincial distribution shows that the highest number of divorces were granted in Gauteng (6 318), the Western Cape (6 108), KwaZulu-Natal (4 033) and the Eastern Cape (3 137).
Every divorce has its own challenges, but in general, money matters to consider at this time include:
Researching legal experts and fees: Ask for personal recommendations, read reviews of divorce attorneys, and educate yourself on fees and related costs.
Organising your financial records: Locate documents such as bank and investment statements, tax returns and pension information.
Assessing your assets and liabilities: Marital assets and liabilities are assets and debts that have been acquired during the marriage. For example, you may have bought a house together. You also need to list your non-marital assets and liabilities, for example, debt you took on before the wedding.
Taking stock of debts: You will need a clear and accurate picture of all your debt. This means disclosing your full financial status regarding your home loan, car finance and credit cards, as well as personal loans, business debts and retail accounts.
Building your financial identity: Start the transition from joint finances and shared accounts to establishing your own financial identity. This entails opening accounts in your own name, and in due course, building up a good credit score. This will help you to obtain better interest rates on loans, should you want to buy a property or a car, for example.
Reassessing income generation: If you are already working, you may have to set your sights on earning more; and if you have been out of the job market, you will need to brush up your skills and become more tech-savvy.
Updating your will: With so much else to consider, updating your will may not seem like a priority. However, it is important that your wishes are clear and unambiguous and reflect your changed situation. If you have a joint will, then draw up a new one in your own name. Alternatively, update your existing will.
Reassessing recipients: You may have policies or accounts that list your spouse as your beneficiary. Should you wish, change these designations as soon as possible.
Planning for your retirement: The retirement plans that you dreamt about while married may no longer be realistic given your altered finances. Consider how to boost your retirement provision, while meeting your immediate needs.
No-one enters a marriage thinking that it will end, but sadly this is the case for many partnerships,” says Anthony. “If you can get your financial affairs in order and obtain professional advice so that you do not navigate the process alone, it will be easier to deal with the stresses involved. You are also more likely to be more financially secure in the long run.”
JustMoney is a personal finance portal that provides readers with easy access to financial information, services and products. It guides readers on their financial journey and enables them to make informed decisions.
Shafeeka Anthony is marketing manager of personal finance website JustMoney.co.za.