Gone are the days when men used to be the only ones taking care of the family’s finances. Today women are independent and are often the key financial decision makers in the home, making decisions on everything from the household budget to investments, medical aid, and life insurance.
While no-one wants to think about the prospect of a divorce or a spouse’s death, prevention is always better than cure. If you are happily married or co-habiting in a long-term relationship, ensure you have sufficient cover in place to not only protect your assets from outstanding debt and duties on death, but also your recurring expense needs. Look to various legal structures, for example trusts, in which you can house income generating assets to ensure continuity if your spouse dies. The same applies if you suddenly become widowed.
In both scenarios, it is important to take control of your finances and seek out legal and financial advice. It might cost you something upfront for advice, but it will be worth it in the long term.
Financial advice for newly widowed woman:
- If he had one, check your partner or spouse’s life cover policy. Does it provide for an immediate pay-out in the event of death? If it does, claim it immediately, as their accounts are likely to be frozen until the finalisation of their estate. Some life cover providers offer immediate pay-outs of up to R50 000, which could be very helpful in terms of household and funeral expenses.
- Try to obtain as much information as possible about your partner or spouse’s accounts, investments, debts, debit orders and other household expenses that tend to “have paid for themselves”. Familiarise yourself with and prioritise insurance premiums – especially for your household contents, buildings, cars, and medical expenses. Consult your lawyer if you have difficulty accessing information.
- Your financial responsibilities may have changed drastically, with a household depending solely on you for financial support. There is even more pressure on you if you have children. Ensure that the appropriate cover for income and debt protection, as well as cover for temporary or permanent disability is in place. In addition, cover additional medical expenses for you and your children, it is critical to prevent “draining” assets in order to afford additional costs (not covered by your medical aid) should you or your children suffer an illness or injury.
- Consult a financial adviser if you are inexperienced with financial planning.
- Look to set up trusts for your children and make sure you appoint the right people to look after those trusts, to ensure that any benefits available to your children, i.e., from assets or life insurance products, will be managed correctly should something happen to you.
- If you are financially down and out, make the necessary cuts, e.g., downgrade to a hospital plan if you have a medical aid. Consider applying for a child support grant, which pays out R350 per child if you earn less than R34 800 per year. Remember: Every bit helps!
Financial advice for newly divorced woman:
- As in the event of the death of a spouse, you now have a household depending on you for financial support. You might be receiving little – if any – child support from your ex-partner. Ensure you have life cover for income and debt protection, as well as cover for temporary or permanent disability.
- If your ex-spouse is not honouring maintenance payments for your children and/or yourself, you can lay a criminal charge against your ex-spouse which could lead to him or her being criminally prosecuted. If your ex is formally employed, you can make an application to the Maintenance Court for a garnishee order to be issued. This will be issued on your ex’s employer, who will then be ordered to deduct from your ex’s monthly salary the maintenance he or she should be paying. This will then be paid out to you. Alternatively, the Maintenance Court can issue a warrant of execution which authorises the Sheriff of the court to demand the outstanding monies from the defaulting spouse.
- If there is agreed financial support for you and your children, make sure that you have a life policy that will cover those needs in the event of your ex-spouse becoming disabled or passes away. You need to look especially at products that can provide the required recurring monthly benefit that maps to you and your children’s monthly expenses.
- Consult a financial adviser if you are inexperienced with financial planning. You will need to get financially savvy – especially in terms of planning and saving up for school fees and/or other childcare expenses.
- If you are financially down and out, consider applying for a child support grant, which pays out R350 per child if you earn less than R34 800 per year.
Whether you are a widow or divorced, ensure that your financial decisions are made in the interest of both you and your children. This includes thinking about the future and how each decision, will impact you in months and years to come.