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How to handle your finances when getting divorced

By Staff Writer

Divorce is a traumatic event for both partners in a marriage and their children. In addition to the emotional impact on the entire family, it also has major financial implications for both partners.

For that reason, it is wise to start deciding early in the process how you and you partner should split up your joint assets, savings and debt if you are planning to divorce. You'll need to make decisions such as whether you should sell the home you own jointly, or whether one partner will keep it and pay the other for the amount that has already been paid on the mortgage.

And although spouses must submit separate tax returns in South Africa, a divorce may impact the tax you pay on interest from joint investments or on the capital gains tax you may owe. It's a good idea to speak to a tax consultant about these matters.

Maintenance for the children

One issue that will be top of mind for you and your partner if there are children involved is child maintenance. Maintenance is paid to the parent who has custody of the children, but this money is to be used for the needs of the children rather than the parent.

The court will usually order the payment of maintenance when it gives one of the parent custody of the children. Failure to pay maintenance is a criminal offence. If the parent ordered to pay maintenance does not do so, the other may go to the Maintenance Court to have the order enforced.

Maintenance for the spouse

If one partner earns less than another, he or she may claim maintenance from the other. This is an especially important consideration when one partner has put his or her career on hold to take care of a household or the children.

The maintenance agreement may fall away once the partner granted maintenance finds a good job (in most cases, it is the wife) and is better able to support the lifestyle she enjoyed while she was married. She may also apply for the amount of maintenance to be increased if her needs change.

Dividing up the family property

The division of the family property will take place depending in whether you are married in community of property or out of community of property. In community of property, debts and assets will be split equally between the partners.

If you can't agree about what should be done with property such as furniture, pets or the family home, the court will make a ruling based on the arguments presented by you and your partner (or your lawyers).

If you are married out of community of property, each partner will keep the property he or she brought into the marriage. If you are married under the accrual system, the increase in the value of the property that you each own must be split equally.  If your contract excludes the accrual system, each partner will take the items that the ante-nuptial contract says they must take. The court cannot order one spouse to share his or her property with the other.

Closing Words

It's best to embark on the process of sorting out your finances during a divorce with the help of a lawyer, who will be able to look at your rights and obligations in a more objective way than you will during such an emotionally difficult time. The lawyer will be on your side, but will have a good idea of what demands from you and your partner a court may see as reasonable and lawful, and will be able to advise you accordingly.

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