Divorce is an emotional upheaval but it’s also hard on your finances

Divorce is the ending of a legal contract, one in which your financial lives have been joined. Finance should not be a reason for staying in an unhappy marriage, but you should be aware of the financial implications of divorce. These largely depend on your matrimonial property regime, which determines how assets and debts are divided on divorce.

Cost of divorce itself

There are three types of divorce in South Africa — uncontested divorce, mediated divorce, and contested divorce. Each has different implications for the cost of the divorce process. Uncontested divorces are typically the least expensive, while contested divorces can be costly. In a mediated divorce couples who are unable to agree a divorce settlement employ the services of an attorney and/or professional mediator to help them negotiate and reach agreement. A mediated divorce costs more than an uncontested divorce, but is less costly to finalise than a contested divorce.

Asset division and maintenance

Asset division can be contentious. You need to have a clear understanding of your financial situation, including all assets and liabilities in the estate(s). This includes property, investments, retirement funds, and debts.

Maintenance is another financial aspect of divorce. The amount of spousal maintenance is determined by several factors, including the earning capacity of both parties, the standard of living during the marriage, and the needs of any children involved.

Use a financial adviser

A financial adviser can provide valuable guidance. They can help you understand the financial implications of your divorce agreement and plan for your financial future. When choosing a financial adviser, consider their experience with divorce, their credentials, and their approach to financial planning.

Update your will

It is important to update your estate planning documents, such as your will and the beneficiaries on your insurance policies, retirement funds, and other financial accounts, after a divorce. Failure to do so may result in unintended consequences, and assets may not be distributed according to your wishes.

Other financial issues to consider

Review your medical aid. If you are named as a dependant on your spouse’s plan, you will need to register as a principal member of your own plan, or ensure your spouse is taken off your plan if you are the principal member, subject to any conditions of the divorce order. If you have a joint cellphone contract, uncouple that, along with any other joint contracts you hold.

If you have a joint bank account and/or credit cards, separate these accounts. Unmerge any other credit accounts you had, such as retailers. Change your login details and passwords for any joint accounts or sites you might have logged into as one in the past. Check your debit orders, ensure they reflect your current situation and update beneficiary details on your online banking portal if necessary. Let service providers know your new status and contact details for other bills you are responsible for. This might include your GP, vet, dentist, garden service and optometrist, for example.

Seek the guidance of an expert divorce attorney

Divorce is a challenging time, but understanding the financial implications can help you navigate the process with confidence. At Simon Dippenaar & Associates Inc, we provide expert legal advice and support you every step of the way. If you have concerns or questions about the financial implications of divorce, contact Simon on 086 099 5146 or email sdippenaar@sdlaw.co.za.

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