Forfeiture of patrimonial benefits – it’s not really about what’s fair

Forfeiture of patrimonial benefits – it’s not about what’s fair

The law regarding forfeiture of patrimonial benefits on divorce continues to trouble most legal practitioners in South Africa. This is reflected by the way most pleadings are drafted and the prayers sought in these pleadings. As such, divorce courts have become hesitant to grant forfeiture orders. It has long been accepted that when parties enter into a marriage in community of property one joint estate will be formed. It has been stated that: ‘Community of property is a universal economic partnership of the spouses. All their assets and liabilities are merged in a joint estate, in which both spouses, irrespective of the value of the financial contributions, hold equal shares’ (HR Hahlo The South African Law of Husband and Wife 5ed (Cape Town: Juta 1985) at 157-8).

Choosing community of property

In most instances, parties entering into a marriage do not make equal contributions towards the joint estate for a variety of reasons, including, but not limited to –

  • one spouse might enter into the marriage already owning property (movable or immovable);
  •  one spouse’s salary might be more than that of the other;
  •  one spouse might not be employed;
  •  one spouse might request the other to stop working in order to take care of the household and children; and
  • one party might have been employed for some time and have substantial pension benefits.

As such, entering into a marriage in community of property is a risk that each spouse takes. The spouses will, on the date the joint estate is created, become joint owners of all the assets brought into the estate and will also share each other’s liabilities.

The law provides alternatives to a party who believes that the other party will end up being unduly benefited by the marriage. Such a party can conclude an antenuptual contract and ensure that the marriage is one out of community of property or out of community of property subject to the accrual system, where he will be able to exclude assets that he does not wish the other party to benefit from. However, if parties decide to marry each other in community of property, then ‘joint ownership of another’s property is a right that each of the spouses acquires when concluding a marriage in community of property’ (JW v SW 2011 (1) SA 545 (GNP) para 18, citing the headnote in Engelbrecht v Engelbrecht 1989 (1) SA 597 (K)). It is well established that if an antenuptial contract is not signed before the marriage, the marriage will automatically be in community of property. The parties to such a marriage will be contracted to deal with both the advantages and disadvantages of this marital regime. ‘One of the ordinary consequences of marriage in community of property is that the property of the spouses is brought together in a joint estate that is owned by them in equal undivided shares’ (Du Plessis v Pienaar NO and Others [2002] 4 All SA 311 (SCA) para 1). It can be reasonably argued that parties entering into marriage in community of property tacitly and expressly consent to build one joint estate that will hopefully grow and mutually benefit them. However, in practice when a marriage sours one party might decide to divorce and attempt to ensure that the other party does not share in the joint estate. A division of the joint estate is a natural consequence of a divorce where the parties were married in community of property. However, a party to the divorce proceedings who believes that the other party should not share in the joint estate may request the court to order forfeiture of benefits when issuing the order of divorce.

Forfeiture of benefits: Undue benefit NOT fairness

On divorce the court is empowered to order forfeiture of all or only some of the patrimonial benefits derived from the marriage (Ex Parte De Beer 1952 (3) SA 288 (T)). Schäfer has argued that courts do not have the power to order forfeiture ‘merely because this might seem equitable’.

‘While the court has a wide discretion in that it may order forfeiture in relation of the whole or part only of the benefits, it is not empowered to award a “portion of an errant husband’s separate estate” to his wife, for example, merely because this might seem equitable in the circumstances. Nor may a forfeiture order be granted simply to balance the fact that one of the spouses or partners has made a greater contribution than the other to the joint estate. The forfeiture order relates only to the benefits of the marriage … . The precise nature of these benefits depends on the particular matrimonial regime’ (Schäfer Family Law Service: Issue 54, October 2010, 26 – 27).

The party claiming forfeiture must show the court that the other party will be benefited if the order is not made. However, it is the nature of marriages in community of property to benefit parties thereto and it will not be enough to just prove that the other party will be benefited. As such, ‘the court may not use a forfeiture order as a mechanism for deviating from the normal consequences of the spouses’ matrimonial property system and achieving a redistribution of assets simply because it considers this fair and just’ (Cronje & Heaton South African Family Law 2ed (Durban: LexisNexis Butterworths 2004) at 132). The second leg of the inquiry is for the party claiming forfeiture to show that the other party will be unduly benefited if the order is not made. The courts have ‘emphasised that a party who seeks a forfeiture order must first establish the nature and extent of the benefit’. Unless that is proved, the court cannot decide if the benefit was undue or not’ (JW para 18). It has, however, been held that:

‘Unless the parties (either before or during the marriage) make precisely equal contributions the one that contributed less shall on dissolution of the marriage be benefited above the other if forfeiture is not ordered. This is the inevitable consequence of the parties’ matrimonial property regime.

The legislature (in s 9 of the Divorce Act 70 of 1979) does not give the greater contributor the opportunity to complain about this. He can only complain if the benefit was undue’ (Headnote in the Engelbrecht case at 599).

It is at this stage that the court should look at s 9(1) of the Divorce Act 70 of 1979, which lists the following factors which the court ought to take into account when deciding whether the party against whom forfeiture is sought would be unduly benefited or not –

  • the duration of the marriage;
  • the circumstances that gave rise to the breakdown of the marriage; and
  • any substantial misconduct on the part of either of the parties.

The court is not called on to decide what is fair and equitable in the circumstances, but rather to decide whether or not the party against whom forfeiture is sought would be unduly benefited if such an order is not granted. The fairness principle was rejected by the Supreme Court of Appeal in Wijker v Wijker 1993 (4) SA 720 (A) at 731C-H:

‘The finding that the appellant would be unduly benefited if a forfeiture order was not made, was therefore based on a principle of fairness. It seems to me that the learned trial judge, in adopting this approach, lost sight of what a marriage in community of property really entails. … The fact that the appellant is entitled to share in the successful business established by the respondent is a consequence of their marriage in community of property. In making a value judgment this equitable principle applied by the court a quo is not justified. Not only is it contrary to the basic concept of community of property, but there is no provision in the section for the application of such a principle. Even if it is assumed that the appellant made no contribution to the success of the business and that the benefit which he will receive will be a substantial one, it does not necessarily follow that he will be unduly benefited. … The benefit that will be received cannot be viewed in isolation, but in order to determine whether a party will be unduly benefited, the court must have regard to the factors mentioned in the section. In my judgment the approach adopted by the court a quo in concluding that the appellant would be unduly benefited should a forfeiture order not be granted was clearly wrong.’

To date the courts have not fully unpacked the concept of ‘undue benefit’. However, I submit that undue benefit will be illustrated by, among others, the relatively short period of the marriage. It is advisable, therefore, to have regard to the date of separation and not necessarily the date of divorce. I submit that the date the parties stopped residing together as husband and wife provides a clear indication of when the marriage broke down, as opposed to the date of divorce. The parties must also have been consistent, in that they denied each other conjugal rights, among others, during the period of separation and divorce. Undue benefit can also be proved where one party continually makes the living conditions in the household intolerable by, inter alia

  • not contributing to household expenses;
  • selling assets of the joint estate without the other’s consent;
  • inviting friends and family members to reside in the common home against the will of the other party;
  • continually undermining the other spouse; and
  • abusing the other spouse emotionally, verbally, financially and/or physically.

Undue benefit may also be established by proving that the other party is having an extramarital affair and also if such an affair has resulted in the birth of an illegitimate child. Lastly, it appears that failure to contribute financially with respect to the acquisition and/or maintenance of the asset to be forfeited by the spouse against whom forfeiture is sought will also be considered by the court. In practice, this is an allegation most practitioners rely on for an order of forfeiture.

Conclusion

It was held in the Wijker case that not all of the factors in s 9(1) of the Divorce Act need to be alleged and proved for forfeiture to be granted. The court was of the view that ‘the context and the subject matter make it abundantly clear that the legislature could never have intended that the factors mentioned in the section should be considered cumulatively’ (at 729E-F). The factors in s 9(1) are a closed list and ‘[t]he trial court may therefore not have regard to any factors other than those listed in s 9(1) in determining whether or not the spouse against whom the forfeiture order is claimed will, in relation to the other spouse, be unduly benefited if such an order is not made’ (Botha v Botha 2006 (4) SA 144 (SCA) para 8). Finally, a party claiming forfeiture must plead the necessary facts to support that claim and clearly identify those assets he wishes the other party to forfeit by relying on s 9(1) of the Divorce Act and not any other factor that is not recognised by that section. Furthermore, such a party must formulate a proper prayer in the pleadings to define the nature of the relief sought.

Clement Marumoagae LLB (Wits) LLM (NWU) Certificate in Advanced Broadcasting Law (Wits) is a candidate attorney at the Wits Law Clinic.

Divorce and Pension Funds – Landmark Case For Government Employees

Divorce and Pension Funds –Landmark Case For Government Employees

In a divorce, where one spouse was awarded a portion of the pension benefits of the other spouse, who is a member of a Pension Fund in the private sector the waiting period for payment of such benefits would normally be 3 to 6 months. However, when the spouse is a member of a Government Pension Fund the spouse that was awarded such benefits had to wait until resignation, termination of employment or death of the other spouse before the benefits could be paid. This has now changed by a landmark decision handed down by Judge Bozalek in the Cape Town High Court in the matter of  Wiese v Government Employees Pension Fund. The Goverment was granted a period of 12 months to change the legislation.

In this case it was declared that the Government Employees Pension Law,  Proclamation 21 of 1996, was inconsistent with section 9(1) of the Constitution of the Republic of South Africa, Act 108 of 1996, insofar as it fails to afford to former spouses of members of the Government Employees Pension Fund  the same rights and advantages as are afforded to former spouses of members of funds subject to the Pension Funds Act, 24 of 1956, more particularly those contained in section 37D(1)(d), (3) (4) and (5), and is invalid to the extent of that inconsistency.

The applicant was a former spouse of a member of the Government Employees Pension Fund (‘the Fund’), the first respondent, who, in March 2008, in terms of a settlement agreement which formed part of a divorce decree, was awarded a 25% share of her spouse’s pension interest in the Fund. The applicant was unable to realise this interest, however, since the legislation governing the Fund, unlike that governing private pension funds, only allows for the realisation of such an interest as and when an ‘exit event’ takes place in relation to the former spouse, such as resignation, termination of employment or death, and no such event has occurred.

As a result of financial hardship the applicant has at all time unsuccessfully sought to realize her share of her former spouse’s pension interest in the Fund. Having exhausted all other avenues she seeked an order that the governing legislation, the Government Employees Pension Law, Proclamation 21 of 1996, (‘the Law’) is inconsistent with s 9(1) of the Constitution of the Republic of South Africa and is invalid to that extent. She seeked, furthermore, an order whereby, broadly speaking, certain provisions in the Pension Funds Act 24 of 1956, (‘the PFA’) which allow for the immediate realization of pension benefits awarded on divorce to the non-member spouses of members of private pension funds, be read into the ‘Law’.

The applicant’s case was that differential treatment of a non-member spouse of a Fund member to that of a non-member spouse of a member of a pension fund governed by the PFA violates the affected party’s right, in terms of s 9(1) of the Constitution, to the equal protection and benefit of the law. More particularly, she contended that the applicant’s right of access to social security as entrenched in s 27 (1)(c) of the Constitution, and that of others in her position, was violated.

Given that the ‘clean break’ principle is applied to the divorced spouses of private pension fund members, there appears to be no rational reason why this should be withheld from their counterparts on divorce from a member of the Fund (or any other public pension fund, for that matter).

Bertus Preller

B.Proc; AD Dip L Law

Family Law Attorney

Abrahams and Gross Inc.

A:1st Floor, 56 Shortmarket Street, Cape Town, 8000

O: +27 (0) 21 422 1323

F: 086 572 8373

E: bertus@divorceattorney.co.za

 

 

Interview with Bertus Preller, a celebrity divorce attorney based in Cape Town

Business Times Interview – by Adele Shevel

Maria Shriver’s doing it; Tiger Wood’s wife did it. Making the decision to terminate a marriage is a tough one, and the chances are it’s followed by an even more traumatic lead-up to the divorce.

Shriver and Woods are very wealthy, their husbands hugely successful, and high profile infidelity was peppered into the mix. But it’s not only the rich who need to ascertain the financial situation of their husbands.

Women are encouraged to gather as much financial information about their husband’s financial affairs before the divorce proceedings commence, to establish the magnitude of the estate.

Bertus Preller, a celebrity divorce attorney at Abrahams and Gross in Cape Town provides guidance as to how to get your affairs in order before making that final call.

“It’s extremely important for any woman to know what’s going on in her husband’s financial affairs. It’s difficult when you don’t have access to his share portfolio or balance sheet, but one must reasonably expect to get an idea of financial affairs.”

An attorney cannot negotiate on behalf of a client without knowing in advance what the estate is worth.

In many divorce settlements, the wife ends up seeing what the estate is worth after it takes place.

  • Make copies of your husband’s bank statements, credit card statements and get hold of the short-term insurance policies as well as copies of pension funds and retirement funds. This will provide input on the extent of assets available and the value of the estate.
  • Build a clause into the settlement agreement to say if any assets that come to light after the divorce settlement, the wife is entitled to 50% of those assets and the husband will have to pay the legal fees involved in this process.
  • A more accurate sense of assets will come to light if the divorce is contested as parties are required to disclose any information to do with financial affairs. The husband can be required under oath to make full disclosure of his assets, and it is perjury if he doesn’t.
  • Women are advised not to leave the matrimonial home if children are involved, because it provides a sense of stability for the kids. It’s better for the husband to leave. If he makes himself guilty of abuse, the wife can get a restraining order to evict him from the property. In some instances, the husband can be restricted from accessing certain parts of the home.
  • Where the parties are married in community of property the wife is entitled to half the pension or retirement annuity fund. In a marriage out of community with the accrual, the pension fund will be regarded as part of the husband’s assets for purposes of calculating the accrual.
  • In terms of the Divorce Act, the wife (if married in community of property) can choose to ask for the pension fund money to be paid in cash, or transferred to a pension fund of her choice.  Normally pension funds pay out the wife’s portion in 3 to 6 months after the divorce. Wives of employees for the SA government have had to wait for her husband to resign or die before she could access her portion of his pension. But this might change — a judgement issued this month said it was unconstitutional for the wife of a government employee not to be allowed to access his pension following a divorce.
  • Make a list of your monthly income and expenses, as if you’re going to live on your own with your children. It’s important because you get situations where the wife is not working or earns much less than the husband and doesn’t have the money to fight a divorce battle.  She can bring an application pending a divorce, for interim maintenance, which means contributing maintenance before the divorce is finalised. She can also apply for contribution to her legal expenses. If interim-maintenance is granted and the husband does not comply with the court order, he is in contempt of court.
  • In some instances the wife can apply for emergency monetary relief in the magistrate’s court pending the institution of an application for interim maintenance by utilizing the provisions of the domestic violence act because the husband has blocked the use of credit.
  • Interim maintenance falls away once the divorce order is granted. There have been situations where the wife has been granted very favourable interim maintenance terms, so she stalls the divorce in order to continue getting a hearty amount of money each month.
  • The granting of interim maintenance divorce cannot be appealed. The only way the husband can minimize this is if he goes back to court and explains and proves that his financial situation has changed so much that he’s entitled to a reduction. But this does not happen easily.
  • Many battles in a divorce surround the children. Normally the wife is the parent of primary residence and the husband the parent of alternate residence. Increasingly, there’s a shared parenting approach with children staying with the mother for a week and then the father for a week and each party takes care of the children during that period.  “We see a lot of children used as a weapon. I tend to immediately get a parenting plan in place, and register that with the family advocate and stipulate that if issues arise with parenting and the children they need to go to a psychologist or a social worker”.
  • In matters where money is not fought over, it may make financial sense to go to one lawyer who can work for both parties. But a divorce that is acrimonious requires that each party needs a lawyer to assist.
  • A few mediation organizations exist where people can see a mediator to resolve disputes, to settle with both parties. The mediator doesn’t have the authority to issue and award damages but he can facilitate the process. If an abusive husband is involved, mediation is unlikely to work.  But it can work if the divorce is not acrimonious. Parties have to pay. “Sometimes this route can be more expensive than an uncontested divorce, depending on the amount of sessions that the parties have to attend” says Preller.
  • Where a couple owns a property together, they need to decide whether both parties want to keep the interest in the property, sell the property and split the proceeds, or whether one wants to buy out the other. The decision has financial implications because of transfer duties and tax.
  • It’s important to consider instances where the husband has no assets. A policy should be taken out in the event that the husband passes away and there is no money to help cover maintenance, in case of his death.

“The decision to divorce is a business decision. You need to look at what happens until the children turn 21, that there’s maintenance, medical cover for them, a school education and whether it’s government or private school and tertiary education,” says Preller.

About Bertus Preller

Bertus Preller is a Family Law and Divorce Attorney based 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. and deals with Family and Divorce matters across the country.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 clients include celebrities, actors and actresses, sportsmen and sportswomen, television presenters and various high net worth individuals.

His areas of expertise are Divorce Law, Family Law, International Divorce Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, digital rights, media law and criminal law.

Bertus also has a passion for gadgets and technology and he co-pioneered the development of technology in which the first book in the world was delivered to a mobile phone utilizing sms and java technology and also advised a number of South African book publishers on the Google Book settlement class action and negotiated contracts with the likes of Google and Amazon.com.

He specializes in 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.

Top South African Divorce Attorney shares information on Antenuptial Agreements or Prenup Agreements

Top South African Divorce Attorney shares information on Antenuptial or Prenup Agreements

We tapped the brain of Bertus Preller one of Cape Town’s best divorce and family law attorneys on Antenuptial or Prenup Agreements. Bertus Preller is based in Cape Town and has more than 20 years experience in most sectors of the law. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town and litigates in divorce matters across the country. He 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 clients include celebrities, actors and actresses, sportsmen and sportswomen, television presenters and various high net worth individuals as well as ordinary people. He has a deep passion for matters involving children. His areas of expertise are Divorce Law, Family Law, International Divorce Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried father’s rights, domestic violence matters.

What is an Antenuptial agreement?

It is a contract entered into by two people, prior to their marriage, in which they stipulate the terms and conditions for the exclusion of the community of property between them. It ensures that one spouse’s creditors cannot hold the other person liable for repayment of debt, unlike when people marry without entering into an Antenuptial Contract, i.e. ‘in community of property’.

An Antenuptial Contract can also include any terms and conditions as long as they are not contrary to public policy. Most of these terms and conditions relate to the division of assets should the marriage be dissolved due to either death or divorce. During the marriage each spouse will retain his/her separate property and would have complete freedom to deal with that property as he/she chooses. This would not be the case if the parties were married ‘in community of property’.

Who needs an Antenuptial agreement?

While antenuptial agreements (“prenups”) are recommended to anyone for whom they make good economic and personal sense.

People who may benefit from prenups include those who:

  • Have assets, even if they are not considered wealthy
  • Owned a business prior to getting married
  • Have children from a previous marriage
  • Will marry someone with a poor financial track record, high-risk business investments
  • Want to avoid the emotional and financial stress associated with a contested divorce
  • Want a quick and inexpensive method of ending their marriage, if it should fail eventually
  • Want to protect their assets in the event of divorce or death

What types of issues can be included in an Antenuptial agreement?

Antenuptial agreements or prenups can include provisions relating to:

  • The rights and obligations of each of the parties regarding property owned or acquired by either, at any time and wherever located
  • The exclusion of property or business
  • Donations made to a spouse
  • The allocation, division and distribution of the parties’ assets and debts upon divorce or death
  • Any other matter that isn’t illegal or in violation of public policy

Should an Antenuptial agreement be considered cast in stone or can it be varied during the course of the marriage?

It is possible to change your Antenuptial agreement on application to the High Court.

What is meant by a Marriage out of Community of Property?

Each spouse retains his or her own assets and liabilities whether acquired before or during marriage. There is no sharing of profits and losses. Both spouses have full and independent contractual capacity. Upon death or divorce, each spouse keeps control over their own assets. This clearly gives parties absolute independence of contractual capacity and protects the estates of each party against claims by the other party’s creditors. There is no provision for any sharing whatsoever. A party who contributed to the other party’s estate whether in cash or otherwise would have a heavy onus to prove that he or she was entitled to anything from that party’s estate on dissolution of the marriage. Where one party stays at home to raise children and does not contribute financially towards the marriage and the other spouse works and accumulates assets, the former may find herself with nothing and no claim to the assets of the latter. The marriage is governed by a contract known as an ante nuptial contract which is concluded by the parties before the marriage. If the marriage occurred after 1 November 1984, the contract had to specifically exclude the system of accrual. In the absence of this exclusion the rules of accrual will automatically apply.

What is meant by a Marriage out of Community of Property with Inclusion of the Accrual System?

The Matrimonial Property Act 88 of 1984 brought with it the “accrual” system which permits a form of sharing, consistent with a primary objective of marriage, but permitting retention of each party’s independence of contract and ability to retain their own unique separate estates. “Accrual” means increase. The accrual system is a form of sharing of the assets that are built up during the marriage. The underlying philosophy in respect of the accrual system is that each party is entitled to take out the asset value that he or she brought into the marriage, and then they share what they have built up together. One spouse’s property cannot be sold to pay the other’s creditors if the other becomes insolvent – in contrast to the case where the parties are married in community of property. It is of utmost importance that a party wishing to enter into an Ante Nuptial Contract must fully understand what it is they are signing. It is for this reason that a standard form contract cannot be used, that consultations cannot be held over the phone or by means of email and that, unfortunately. The important features of an accrual marriage are in essence the following: Each party retains his or her own estate. Each party may accumulate assets and incur liabilities without interference from or assistance of the other spouse. The estate of each party is determinable separately. The monetary value of the smaller estate is subtracted from the monetary value of the larger estate, the difference is split, and the party having the larger estate pays half of the difference between the two estates to the party with the smaller estate. At dissolution of the marriage, the estate of each party is calculated by listing all assets, listing all liabilities, subtracting liabilities from assets and arriving at a net asset value. In practical terms this amounts to a similar division to a marriage in community of property. However there are certain crucial factors of an accrual marriage which add complexity and much more freedom of choice. When drafting the Ante Nuptial Contract, the parties can each decide to exclude certain assets. The effect of excluding an asset will be that it does not feature on the asset statement at dissolution of the marriage and is completely excluded from the calculation. Assets which are not properly described can cause huge problems when the executor or the divorce attorney tries to decide what to do with it in calculating the net accrual value. To exclude either a specific asset, or a commencement value, or both (which must be separate and not derived from the same asset), can effectively ensure that couples share only what they choose to share and keep separate any item or items, or values, which they do not believe it fair to share (for example something acquired before the relationship commenced). Parties not wishing to exclude specific assets may exclude a certain sum of money which is the agreed equivalent of assets which they do not wish to share, and which is termed a “commencement value”. Excluded from the Accrual Certain property belonging to either the husband or the wife may not be taken into account when the accruals are worked out: Any damages awarded to either spouse for defamation or for pain and suffering; Any inheritances, legacies or gifts that either spouse has received during the marriage, unless the parties have agreed in their antenuptial contract to include these or the donor has stipulated their inclusion; A donation made by one spouse to the other. This is not taken into account as part of either the giver’s or the receiver’s estate, with the result that the giver cannot recover part of what he or she gave and the receiver need not return any of it.

SAMPLE OF AN ANTENUPTUAL AGREEMENT WITH ACCRUAL

This agreement is a sample and is of a general nature. Certain additions and ammendments may be required to suit your specific needs.

It is hereby certified that a R10.00 stamp is affixed to the original contained in my protocol register. PROTOCOL NO : _________________________

ANTENUPTIAL CONTRACT

with the

APPLICATION OF THE ACCRUAL SYSTEM

in terms of the

MATRIMONIAL PROPERTY ACT, 1984

BE IT HEREBY MADE KNOWN THAT on this _________________day of ________________________ 2011 before me

(INSERT NAME OF NOTARY PUBLIC) Notary Public, practising at Pretoria in the Province of _______

appeared

FULL NAME: _______________________ IDENTITY NUMBER: ________________ UNMARRIED

-and-

FULL NAME: ________________________ IDENTITY NUMBER: _________________ UNMARRIED

And the appears declared that whereas a marriage has been agreed upon, and is intended to be solemnised between them, they have agreed and now contract with each other as follows :

1. That there shall be no community of property between them.

2. That there shall be no community of profit or loss between them.

3. That the marriage shall be subject to the accrual system in terms of the provisions of Chapter 1 of the Matrimonial Act, 1984 (Act No. 88 of 1984).

4. That for the purposes of proof of the nett value of their respective estates to be as follows: that of (INSERT FULL NAME) to be R 000.00 consisting of :_______ (INSERT DETAILS) that of (INSERT FULL NAME) to be ZERO

5. That the assets of the parties or either of them, which are listed hereunder, having the values shown, and all liabilities presently therewith, or any other asset acquired by such party by virtue of his possession of former possession of such asset, shall not be taken into account as part of such party’s estate at either the commencement or the dissolution of the marriage.

The assets of (INSERT FULL NAME) so to be excluded are R000.00 consisting of : (INSERT DETAILS)

The assets of (INSERT FULL NAME) so to be excluded are NONE

THUS DONE AND EXECUTED at _________________________aforesaid on the day, month and year first aforewritten in the presence of the undersigned witnesses.

AS WITNESSES:

1.

2.                                                      ………………………………………………………

THUS DONE AND EXECUTED at _________________________aforesaid on the day, month and year first aforewritten in the presence of the undersigned witnesses.

AS WITNESSES:

1.

2.                                                      ………………………………………………………

QUOD ATTESTOR NOTARY

Financial Tips for Women Facing Divorce

Financial Tips for Women Facing Divorce

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:

1.         Business

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.

3.         Insurance

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:

  1. Set a financial goal — be as diligent about money as you are about fitness or your career or about anything else.
  2. 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.
  3. Buy your own home — don’t wait for Prince Charming to come along and do it for you.
  4. Fund your retirement annuity — an important step for everyone, not just young women.
  5. Opt for long-term planning over crisis management — get serious about money now; don’t wait for trouble to strike.
  6. Start investing — do it now, and don’t be afraid to make mistakes.
  7. Don’t fear risk — women are especially prone to conservative investments; be willing to seek aggressive growth when appropriate.
  8. Don’t go it alone — work with a financial planner to educate yourself and to feel more secure in your decisions.
  9. 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.

Seven Big Post-Divorce Money Mistakes Women Make

The Seven Big Post-Divorce Money Mistakes Women Make

Breaking up is not only hard to do, it can be brutal on your finances.

Legal fees and creating and running two households from one are just the initial costs of separation process. And while some expenditure is necessary, others can be emotionally charged and careless and can lead to serious debt.

Here are seven common ways divorced couples can get into big financial trouble after a split:

1.            Ignorance

While a divorce Settlement Agreement may specify who is to pay what account, it carries little weight with creditors.

The most frequent mistake of all after divorce is assuming that because the ex spouse has been the one ordered to pay back the debt in the divorce, they are off the hook for it.  Most people do not realise that courts do not have the authority to make creditors abide by a judge’s orders in divorce. A spouse may have recourse to re-claim a debt from the other spouse who assumed the debt, but it does not nullify liability towards the creditor where the debt was a joint debt of the parties.

2.         Delusion

If you relied on the other person’s income during the marriage, your cash flow may take a serious dip. As it constricts, so must your budget. Unfortunately, many who are accustomed to abundance deny reality and continue to shop till they drop. The bills, however, wind up on the cards.

The most important thing most parents want is for their child’s lifestyle to continue, be conscious of your current circumstances and spend accordingly.

3.         Neglect

Own a home together? Make sure that your share in the property is transferred, especially if you are married in community of property. There are many cases where one party was awarded the other spouse’s share in the home, but neglected to transfer it. If your ex lands in financial trouble after divorce, creditors may still attach his/her share in the property, so make sure it is transferred.

4.         Revenge.

Wanting to ruin your ex by charging up the cards is a frequent response to betrayal; it is what one call ‘the saboteur spouse’. Squelch this desire, though. While big balances may result in the hoped-for fury, you too could be held responsible for the balance.

5.         Beauty

If you’ve been dumped for a younger model and want to make yourself feel better by looking better with the hope of attracting a new mate, you may be considering splurging on a beautification procedure.

Be careful, though it usually translates into little more than added liabilities. Some people spend thousands on plastic surgery after discovering the husband’s affair. It may be money that one could not afford to spend, it was more important to paying off credit cards. Worse, those nips and tucks normally has no positive impact on the soon-to-be ex. Delay any major decisions — financial and cosmetic — for at least six months to a year after a divorce is finalized.

6.         Competition

What happens when one parent can afford more and better things for the children post-separation? The less wealthy partner sometimes attempts to keep up with or even outdo the other.

Oftentimes, there is a pre-divorce battle for the children’s love and affection by purchasing gifts for kids or taking them to concerts or cruises in order to gain their affection over the other spouse. Question your motivation for purchasing certain items for the kids. If it’s to prove your love, stash the cards.

7.         New love

Getting sucked into a fresh romance when a marriage falls apart can be seductive. It can also be pricey. One of the most common post-divorce credit issues are loans people make for new partners. In some cases, it may be thousands to fix a broken car, but in others, it is tens of thousands to help a new lover with a business, or hundreds of thousands to put towards an ‘investment’ that was really a scam. Avoid lending or giving money to anyone for at least a year after divorce.

Almost everyone has regrets about a broken relationship. Don’t make needless, emotion-based liabilities one of them. Divorce your mate, not common sense.

About the author:

Bertus Preller is a Divorce and Family Law Attorney based 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. and litigates in divorce matters across the country. He 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 clients include celebrities, actors and actresses, sportsmen and sportswomen, television presenters and various high net worth individuals.  His areas of expertise are Divorce Law, Family Law, International Divorce Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, digital rights, media law and criminal law.

Bertus other passion is technology and he also co-pioneered the development of technology in which the first book in the world was delivered to a mobile phone utilizing sms and java technology and also advised a number of South African book publishers on the Google Book settlement class action and negotiated contracts with the likes of Google and Amazon.com.