Expert advice on dealing with the finance stress and trauma that comes with divorce

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Published Apr 23, 2023


Johannesburg - The effects of a divorce on couples and families are widespread but financial experts also warn about the financial impact of this kind of separation.

“The trouble is that when emotions take over, hasty decisions are made,” John Manyike, Head of Financial Education at Old Mutual, explained.

“It is only when things have cooled down that the actual financial cost of a divorce becomes obvious,” he added.

And this dilemma is prevalent in South Africa, where data from a 2021 Stats SA report revealed that four out of 10 marriages would end before the 10-year mark in the country.

“Love is what gets couples in front of the altar, but when the passion fades, and relationships get rocky, the dreaded ‘big D’ often rears its ugly head,” Manyike said.

“It’s, unfortunately, a time when many are pressed to get as far away from each other as quickly as possible.”

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During this period, Manyike warned, is when some divorce-related problems begin to emerge.

“The costs begin with changing living arrangements, followed by legal fees.”

He explained that if a senior family law attorney is involved, costs can range from between R2000 and R 3000 an hour.

“Add the unavoidable fees of an advocate, costs rise even faster, and if the couple fights about a settlement, the cost can be in hundreds of thousands of Rands or even millions.”

And when children are part of the equation, the Head of Financial Education at Old Mutual added that this is when custody also becomes an issue.

This is as costs rocket as actions such as child or spousal maintenance battles and protection orders that must be resolved before the divorce proceedings begin.

“The sad reality is that stress, anxiety, and the determination to emerge as a winner usually results in everyone becoming financially poorer. The longer you disagree, you both lose,” he said.

“The result for personal finances can be devastating and long-lasting.”

But Manyike said that financial destruction for a family is not the only route a divorced couple can take as they have many legal options available to them.

“Marriages involving ante-nuptial contracts often provide some financial cushion as these agreements are used to guide the distribution of assets in the event of a divorce or death.”

He explained that an ante-nuptial contract also functions as an estate planning tool.

“More than anything, that sees spouses as two separate legal entities.”

He recommended that couples secure their property or other assets before the actual wedding ceremony in order to protect assets before and during the marriage.

“Nobody gets married with divorce in mind. However, an ante-nuptial contract is the easiest way of ensuring that if you part ways, each partner keeps the assets they brought into the marriage,” said Manyike.

But he believes that the surest way of resolving this marriage crisis with dignity and enough cash to get started again is to set arguments, egos and ill feelings aside and for couples to talk to each other.

“In opting for divorce, mediation can be a win-win solution that cuts stress and reduces parting costs.”

But he warned that the problem starts with one of the parties trying to outsmart the other and trying to gain more assets than the other.

“Consider the fact that your health is also more important than material things and that by taking the mediation route process, either with an attorney or faith-based counsellor, both parties work to reach an agreement on the issues that have emerged from the decision to divorce.

“All aspects of the divorce are discussed, and terms are agreed and presented in court,” he explained.

He added that this becomes uncontested, and the official parting is finalised within a few months at the least cost.

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Manyike said that mediation also has several other benefits:

– It is cost-effective and affordable.

– The quicker the agreement is reached, the fewer sessions are needed, and the lower the cost.

– Having an attorney or faith-based counsellor mediate means that better decisions are made.

– Discussions encourage mutually beneficial talks and final settlements.

“Ultimately, once the decision has been taken to call it a day, the most important discussions and disputes will be about money,” he said.

Manyike added that it is also advisable to relook your finances and take practical steps, including redrafting your will, and ensuring that your life insurance policy beneficiaries are appropriately updated.

“Additional steps such as setting up trusts for children could also be considered and, involving a qualified financial adviser and estate planner could help re-establish your post-divorce life.”

Apart from the financial repercussions of divorce, the emotional well-being of the children involved is also a vital part of this process.

According to a report from The Conversation in December of last year, there are a higher number of mental health problems observed in children from one-parent, step or blended families compared to those living in their original family.

The article added that there is also a well-established link between high levels of post-separation parental conflict and childhood maladjustment.

“Studies suggest the relationship between the parents post-separation strongly influences the development of childhood problems,” a section of the article read.

“With hostile, disengaged or unconstructive conflict behaviours particularly associated with maladaptive childhood behaviours.”

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This was The Conversation’s expert advice for protecting children’s mental health during a divorce:

– Tell them together

Experts suggested telling your kids what is happening as a united front. Sit them down in a quiet time with no distractions where they will have plenty of time to process the information and ask questions.

– Keep the adult arguments out of it

Keep your personal/adult arguments off the table. Even if there has been infidelity, addiction, strong feelings of betrayal or blame, that is not your children’s burden, experts warned.

They added that one exception could be if you have older teenage kids who may have figured out on their own what has been going on. In which case, honesty is the best policy – if they are older, smarter and have it half-figured out, prepare yourself for an uncomfortable grilling.

– Prepare for a range of reactions

Just as some children are blind-sided by the news of their parents’ impending separation, some parents are equally shocked at the reaction of their children.

“They may seem rather ambivalent or become immediately distressed and even angry. They may side with one parent from the outset or beg you both to work it out. It’s near impossible to predict how children will respond in these scenarios,” experts were quoted in The Conversation’s article as saying.

“Keep to the high ground, reassure them none of this is their fault and that they are loved and cared for. Don’t be tempted to “defend” yourself or bag the other parent in what may be an emotional and tense moment.”

The Saturday Star