Important financial steps for divorcees
There is no guideline about how to process the emotional rollercoaster of divorce, but divorcees can take control of one aspect: their finances.
Now is the time to review changes which must be made to your financial situation, said Alexander Forbes Certified Financial Planner Megan Marks. Contact your Financial Planner to make the following changes:
- If you have nominated your spouse as a beneficiary on one or more of your Insurance policies or your retirement fund, this should be changed and a new beneficiary should be nominated. Ask your Financial Planner to review the benefits of your life, disability and dread disease cover to make sure that they are in line with your changed circumstances
- Review your Will within three months of your divorce. If you die within three months, your divorced spouse will not inherit under the Will. It is presumed that you intended to exclude him or her from benefiting. However, if you fail to change it within three months, you are deemed to have the intention for the bequest to remain.
- If you do not have a Will, arrange with your Financial Advisor to have one drafted. Include a Testamentary Trust in your Will to protect your children as heirs in the event that you pass away prior to them reaching a certain age (generally between 21 and 25) to safeguard any capital being used by anyone other than your chosen heirs.
- Medical Aid - If your divorce agreement requires you to have your own medical aid membership, then ensure that you take out cover urgently.
- It is extremely important to prepare a budget irrespective of whether your spouse will be providing you with a maintenance amount. Lawyers’ fees will be a new expense and hopefully you and your spouse can come to an amicable agreement so that the legal fees do not escalate drastically. List every single one of your monthly expenses, no matter how insignificant you think the amount is. Remember to include rent/bond payments, levies, rates, petrol, groceries, life policies, school fees, birthday presents. Everything adds up and if you are the one that has moved out, your expenses will be greater initially in terms of start-up expenses in a new home. Leave yourself no surprises.
- If you have children together and they are minors, a Parenting Plan is essential because the arrangements you make for your children must be in the best interests of your children. This document must be professionally drafted and both you and your spouse must be in agreement. Your children must also understand the changes in the dynamics of the family so that they can also adjust emotionally to the change of life.
- The Matrimonial property system which governs your marriage, namely married in community of property or out of community of property with or without the accrual system can impact greatly on your assets and liabilities? Make sure that you know and understand your rights and asset sharing applicable to the matrimonial property system which governs your marriage..
Become financially empowered and be ready to take on the world. Maya Angelou said, “History, despite its wrenching pain, cannot be unlived, but if faced with courage, need not be lived again.
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