Don’t let money get in the way of a successful marriage
Janine Player
Arguments around spending habits, a lack of disclosure of one’s income and little to no understanding of SA’s matrimonial property regimes, can all get in the way of a successful relationship.
Money problems are the most common reason for divorce. It’s therefore imperative that couples openly discuss their finances prior to getting married.
It’s also vital that couples completely understand the various matrimonial property regimes and their financial consequences. There are three types of matrimonial property regimes recognised in SA law:
1. Marriage in community of property: Both spouse’s assets and liabilities are joined together as one community estate and both are equal partners owning an undivided half share of the entire joint estate regardless of who brought what into the marriage.
If no ante-nuptial contract is entered into, this regime applies.
In divorce or death, assets must be divided equally between both parties.
2. Marriage out of community of property without accrual: An ante-nuptial contract (ANC) is drawn up. Each spouse is in control of their own estate, comprising assets and debts they had before entering into the marriage agreement and any individual assets and debts that they acquire during the marriage.
In divorce or death, each spouse retains their separate estates and is unable to claim from the other.
Where one member has been the homemaker and child carer, they often successfully claim maintenance from the other.
3. Marriage out of community of property with accrual: This is similar to that of a standard ANC (see 2); the difference is that each party’s assets prior to the marriage and their value is registered in the ANC.
When the marriage is dissolved, only the value of the assets acquired during the marriage will be shared equally; the assets listed in the ANC or their equivalent value, including inflationary increases, isn’t shared.
Having a financial plan drawn up by a financial planner to put couples on the right path to help them achieve their short-term and long-term lifestyle goals and objectives is important, as it provides clear steps each party needs to take and can prevent stress and frustration down the line.
Some of the most common goals couples should save towards include:
Saving for a property deposit Funding children’s education Becoming financially secure at retirement Insurance for the family’s lifestyle needs in the event of a spouse’s death, sickness or disability An emergency fund for unexpected costs. Janine Player is a financial planner at Old Mutual Private Wealth Management.