One of the biggest causes of the breakdown of a marriage is concern over financial matters, yet despite this all too often newly engaged couples focus their attention on the wedding, reception, honeymoon and other matters without giving due care to the financial consequences of marriage.
A recent study from the US revealed that 32.9% of women and 28.7% of men cite financial problems as the cause of their divorce. While there are no local statistics these figures reveal the importance of seeking proper financial advice ahead of a marriage to help avoid serious problems later on.
This is according to Gavin Came, Chairman of the Financial Planning Committee at the Financial Intermediaries Association of Southern Africa (FIA), who says couples should be as open talking about their financial situation as they are discussing the social formalities of a wedding.
“Much of the stress in a marriage often arises from discrepancies in the spouses’ views on saving and spending. Invariably one tends to be more of a saver and the other a spender, which can quickly give rise to conflict. This can largely be avoided by speaking to a qualified financial adviser who can assist the couple to agree and maintain a financial plan that includes a budget.”
He says it is critical that both partners are open and honest about their financial history as financial affairs coming into the marriage will play a vital role in actually determining the type of marriage contract to be entered, says Came. “It is highly important for the spouses to understand what financial issues could face the marriage, for example, if one of the spouses had incurred significant debt or is exposed to large personal sureties, this could affect the couple’s ability to take on further debt to, say, buy a family home.”
He says that following a marriage, there are many changes to the financial situation that need to be considered and planned for. “After a marriage there are usually two incomes earned and one house to finance, or in the case of a second marriage, there may be issues from previous relationships, such as maintenance and decisions to be made about children - such as education, healthcare and other additional expenses. In the longer term, and for older newlyweds, there are the retirement plans which also need to be considered jointly.”
“The long term structure and financial arrangements of the partnership will also determine many future decisions of the marriage, so it is vital to have cohesive plan in place that can be reviewed on an annual basis.”
“There are basically three financial marital regimes available to couples: community of property; anti-nuptial contracts excluding community of property; and anti nuptial contracts providing for community of accrual.”
“However, there are many variations in agreeing on the detail of an anti-nuptial contract. A decision about which of these regimes to enter is sometimes difficult to determine for a young couple marrying for the first time. They are also important considerations for second marriages where the spouses may have accumulated assets prior to the wedding.”
“With so many dimensions to the financial consequences of marriage it simply makes good sense to discuss and plan the financial future of the marriage with the assistance of a qualified and experienced financial advisor who can help determine the best plan for the marriage to ensure a financially successful marriage in the long term,” concludes Came