Planning for divorce?
With the more and more couples filing for divorce, it is important to include the break-down of the relationship in financial planning
When being fitted for your wedding dress or tuxedo, the possibility of your marriage ending in divorce is the furthest thing from your mind.
Vows ‘till death do us part’ are meant to last a lifetime, however, latest Statistics South Africa data indicates that the divorce rate is on the rise.
A marriage signifies a union which forever binds two individuals in matrimony but the reality is not all marriages are meant to last.
Leonie O’ Connell from Momentum says divorce not only leads to a broken heart but could have a severe effect on your personal finances.
“You need to be financially prepared for the fiscal realities of a potential divorce,” said O’Connell.
“Uncontested divorces could cost in the region of R5 000 to R10 000, while contested divorces costs could skyrocket well beyond R50 000.
“Divorce is never easy. It tests your emotional and financial strength.”
O’Connell explains that it is vital to understand the financial impact a breakdown of a relationship could have on your financial stability including savings and retirement plans.
“Understanding these impacts is the first step in protecting your financial future and will therefore make it easier to plan accordingly,” she said.
Financial impact awareness
Divorce can lead to a substantial reduction in household income, increased living expenses and legal fees.
The division of assets, including retirement funds and property could further compromise financial stability.
It is important to take proactive steps to mitigate these challenges in the event of legal separation.
Planning
Proactive financial planning is crucial and will aid in protecting your financial future.
Create a detailed financial plan that includes current assets, liabilities, and future financial needs.
Planning will further manage the division of assets and prepares both parties for post-divorce financial independence.
Remember to review and adjust your financial goals and strategies to reflect your ever changing circumstances.
Trust the professionals
A solid plan needs to be fueled by the right advice.
Money is complicated, especially when it comes to the intertwining finances of a married couple.
Credible and trustworthy financial advisers can navigate the complexities of divorce settlements, asset division, and long-term financial strategies taking into consideration your relationship and lifestyle.
With the correct guidance you will be able to make informed decisions to safeguard your financial wellbeing while providing valuable insights into the tax implications of divorce, the division of retirement assets as well as strategies to rebuild your financial health post-divorce.
Also Read: What are your property rights after marriage?
Also Read: Love, marriage and (someone else’s) children
