19 June 2024
What is your client’s marital regime? Is there tax relief for parties getting divorced? Which law applies to a couple getting divorced in South Africa but who got married abroad? This and many other questions were answered in Part One of Glacier’s webinar series titled ‘The end of things: How your client’s divorce would impact on their investments.’
Intended to empower advisers with knowledge to be able to help their clients avoid a ‘messy’ divorce. Presented by Hannah Wilson, co-founder and director at Simplifi Law, the three-part webinar series explores much of what intermediaries need to know about the financial aspects of divorce.
Among others, Part One covered the legal framework of marriage, what this means when a couple files for divorce, and the financial aspects that need to be resolved when a marriage is legally dissolved.
Key takeouts from Part One
- Divorce in the first marriage typically happens within the first 10 years.
- A divorce lawyer’s office is no place to make material divorce settlement decisions.
- There are three main issues that need to be resolved in a divorce:
- Care of and contact arrangements regarding minor children
- Division of
- Child maintenance and/or maintenance of dependent children
- Spousal maintenance (previously known as alimony)
- A ‘smooth’ divorce where both spouses agree on the settlement, can take between eight and 12 weeks and cost between R15 000 and R30 000. A litigated divorce can run into hundreds of thousands of rands.
- If spouses don’t agree on the terms of their divorce, the process of litigation could take up to five years.
- Many people who marry do not know the marital regime under which they are married.
- If a client got married in a foreign country, don’t assume that SA law applies when they file for divorce in SA.
- There are three proprietary martial regimes that govern property rights in a marriage in South Africa:
- In community of property
- Out of community of property with accrual
- Out of community without accrual
- The first section of an antenuptial contract should be agreement by the couple of the country law that applies to their marriage.
- An antenuptial contract must be signed before the date of the marriage.
Watch the recording of Part One
Key takeouts from Part Two
With the help of facilitator, Hannah Wilson, co-founder and director at Simplifi Law, the three-part webinar series explores much of what intermediaries need to know about the financial aspects of divorce.
What is proprietary regime? How were the Divorce Act and Pension Funds Act changed over time to accommodate pension interests being included in divorce calculations? What is the impact of divorce on pre- and post-retirement investments? These and many other questions were answered in Part 2 of Glacier’s webinar series titled ‘The end of things: How your client’s divorce would impact on their investments.’
- Before 1989, pension interests did not come into the division of in the divorce process, even if parties desired this.
- In 1989, the legislature intervened with an amendment to the Divorce Act 70 of 1970. In terms of these amendments, pension interests of a party are deemed to be for the purpose of the divorce calculation.
- The Pension Funds Act was amended in 2007, when the clean-break principle was instituted.
- Included in the list of pension interests are the following, provided they are registered under the Pension Funds Act:
- Pension funds
- Preservation funds
- Provident funds
- Government Employees' Pension Fund (GEPF)
- Retirement annuities
- Living annuities are not included in pension interests for the purpose of division of in the context of divorce calculations.
- Pension interest and pension benefits are not the same thing. Pension interest is a future benefit. However, when you retire from your employer, but you choose not to retire from your pension fund, you are deferring your pension, so it becomes a pension benefit.
- A pension fund does not pay pension interests to any party in a divorce, unless there is a court order instructing them to do so.
Watch the recording of Part Two
Key takeouts from Part Three
Part 3 of the webinar series centred on a review of Part 2 as well as a deep dive into some of the themes and topics that were tackled in Parts 1 and 2. Hannah Wilson, co-founder and director at Simplifi Law and Lize de la Harpe, legal advisor at Sanlam Corporate Finance, addressed some of the questions posed by attendees in the webinar series.
Some of the questions they addressed included:
- What is customary marriage?
- What are the rights in a relationship of long-term co-habitation?
- Is a Muslim marriage a valid marriage in South Africa?
- How are trusts dealt with in divorce?
