Financial Tips for Women Facing Divorce
While neither gender has an exclusive lock on money management skills, the financial deck is stacked against women. Women earn about three-quarters of what men earn. In a divorce, they get less of the assets and more of the children. They live longer, and one in eight elderly women lives in poverty, compared to one in 12 men, according to figures from the U.S. Department of Health and Human Services, the same may apply in South Africa. Unfortunately, many women view money and money-related tasks as necessary evils, not opportunities to even the odds.
The divorce rate is beginning to tick upward for couples who have been married for several years, decades or longer.
Recent media reports tell the tale, and it’s easy to point to the divorces of long-time couples like Arnold Schwarzenegger and Maria Shriver, Al and Tipper Gore and others for evidence of what many now consider a growing trend across the world.
Older women who have been in long-term marriages must nowadays confront unique financial issues when they’re facing divorce. Just as younger brides have their own set of concerns to mull over; older women have to pay special attention to a number of financial matters specific to their age and the often sizeable assets that have accumulated over the course of a lengthy marriage.
For example, women who have been married for some time and facing divorce must be particularly vigilant about protecting their:
Even though it may seem incredibly unfair, a divorce can ruin your business –unless you have taken the appropriate steps to “divorce-proof” it (ideally while you were still single).
How can a divorce ruin your business? Consider this:
If you nurtured a business, and it increased in value while you were married, the amount of increased value must usually be included as part of the marital assets that will be divided between you and your husband, unless of course if you got married out of community of property without the accrual. It doesn’t matter who operated the business or how it’s titled.
2. Retirement funds
Divorce requires the careful scrutiny of all retirement annuities and pension funds. It’s essential for your divorce settlement agreement to clearly spell out how these assets will be split and how those funds will be transferred.
Many women often make the mistake of assuming that a divorce order will fully protect their rights to their portion of their husband’s retirement annuity or pension fund. This is usually not the case, and the settlement agreement need to be drafted in a particular way to include these assets.
Most women pay careful attention to their health insurance needs. But, don’t forget: In your new role as a single woman, you’ll need to consider life, property/casualty and disability insurance, as well. What’s more, if you will be receiving child maintenance you will want an insurance policy that protects you financially in the event something happens to your ex-husband.
4. Short-term and long-term financial stability
Following your divorce, you’ll need financial stability in the short-term, and you’ll have to take the right steps to plan for financial security into your retirement years. For starters, you must create a budget that will allow you to maintain your lifestyle, pay off debt and increase your savings.
But, what happens if the divorce settlement doesn’t provide enough income to pay your expenses? In that case, you will need to start immediately liquidating assets to maintain your lifestyle.
5. Assets that he concealed
What happens when you find out 2 years after the divorce of certain assets that your husband did not disclose and which would have had an impact on your initial divorce settlement? A good divorce attorney will know how to deal with issues such as these in a divorce settlement agreement, to allow a claw back to claim any assets that your ex might have hide.
The following steps may be recommended for women in a divorce:
- Set a financial goal — be as diligent about money as you are about fitness or your career or about anything else.
- Train yourself to be financially independent — don’t allow yourself to become reliant upon your partner’s decisions, and become involved in long-term financial planning.
- Buy your own home — don’t wait for Prince Charming to come along and do it for you.
- Fund your retirement annuity — an important step for everyone, not just young women.
- Opt for long-term planning over crisis management — get serious about money now; don’t wait for trouble to strike.
- Start investing — do it now, and don’t be afraid to make mistakes.
- Don’t fear risk — women are especially prone to conservative investments; be willing to seek aggressive growth when appropriate.
- Don’t go it alone — work with a financial planner to educate yourself and to feel more secure in your decisions.
- Know that it’s never too late — remember that you can start late and finish rich.
About the author:
Bertus Preller is a Divorce and Family Law Attorney in Cape Town and has more than 20 years experience in most sectors of the law and 13 years as a practicing attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com and is frequently quoted on Family Law issues in newspapers such as the Sunday Times and Business Times. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, international divorce law, digital rights, media law and criminal law.