Divorce can be financially and emotionally crippling on all involved and it is important to make decisions based on sound financial advice, according to Sore Cloete, senior legal manager at Old Mutual.
While the divorce process in SA is relatively straightforward, civil marriages can only be dissolved by the courts and the financial consequences can be profound, says Cloete.
The costs associated with a divorce hinge on the type of divorce filed and the lawyer hired. An uncontested divorce – where both parties agree on the division of their assets and all arrangements regarding children – can cost anything between R800 and R20 000, depending on the complexity. A contested divorce can end up costing hundreds of thousands of rand in fees and pay-outs.
The latest data released by Statistics SA – for 2015 – show that more women initiated divorce than men. Cloete, therefore, emphasises the importance of being advised during divorce settlement negotiations on the outcome of policies that were taken out during the marriage and regulations around pension funds.
A study by Professor Stephen Jenkins, a director of the Institute for Social and Economic Research, and chair of the Council of the International Association for Research on Income and Wealth, found a few years ago that in Britain women become poorer after a divorce, while men become richer after divorce.
He found the father’s available income rises by about a third, while the mother’s drops by more than a fifth and stays that way for years.
Godfrey Madanhire, a professional motivational speaker and life-coach, warns that just as the loss of a life partner affects your finances, the emotional distress which invariably accompanies divorce can also jeopardise your bank balance.
The 2015 data shows that, even though the number of new marriages in SA continued to drop each year, the rate of divorce is on the rise. A total of 138 627 civil marriages were registered in 2015, for instance. This is 8.1% fewer than the 150 852 registered in 2014.
At the same time 25 260 completed divorce forms were processed in 2015. This indicates an increase of 2.3% from the 24 689 processed in 2014.
The average ages at divorce were 44 years for men and 40 years for women. About 45.4% of these divorces took place within the first 10 years of marriage and 55.6% involved children aged under 18 years of age.
Softening the financial blow of divorce
Drawing up a prenuptial agreement and maintaining open communication on the topic of finances during a marriage helps to manage expectations, says Cloete.
Avoiding the subject can, in the event of divorce, lead to a drawn out and expensive court battle.
“The more you can agree to beforehand, the less you need to spend on attorney’s fees. If both parties are willing to cooperate, it is worth going through mediation before going to an attorney, as divorce mediators are considerably cheaper and often have a background in counselling, which can be beneficial in cases when children are involved,” says Cloete.