There are RECIPROCAL RESPONSIBILITIES and OBLIGATIONS that existed between the two parties PRIOR TO THE DIVORCE....and this cease at SIGNING of the DIVORCE Agreement. Look at the following....ESPECIALLY, if you are the WEAKER PARTY in a threatening
1. Retirement Planning
This should be done for both parties at this time.It might happen that one of the parties ceased working to assist in the raising of children.The provision
for retirement would then have been affected during this period.The formation of an agreement should be met on the sacrifices the weaker party made during this period of marriage.
Currently, the Market Trend is: R1 mill per R5 000 p m required. This
implies that, for somebody that is used to a monthly lifestyle of R15 000 p m, her/his Retirement plan should be worth R3 mill in today's value. This does not keep in mind, if that person is 10 years from retirement...then it could be as much as R6 mill required....
The parties should discuss what happens when the party responsible for payment of the maintenance, passes away or becomes disabled. Maintenance to children as well as provision
for tertiary education should also be taken into consideration. Even the risk of their care-taker(mother?) becoming temporarily disabled or extremely sick, while looking after the kids. Especially if she has her own commitments and continue NOT TO BE Economically
active...in her own right(e. g. looking after minor kids)
Again, the market trend is R1 mill per R5 000 p m.
The possibility of both parties
getting in an accident or illness, which results in the loss of monthly income as well as the ability to provide this income should be discussed.
The same here...and on both parties lives...because of Insurable Interest the parties have in each other....e
g Loss of Income(Temporary and/or Permanently)
4. Bond Cover
Both parties should be taken into consideration...Ownership of all existing Life Insurance should be discussed(and
Beneficiary Changes).....because of irrevocability....after the Divorce agreement is signed.....and the risk of INHERITING LARGE DEBT/a BOND.
5. Short Term Insurance
be discussed which party will be responsible for payment of this. The possibility of change of Ownership should also be taken into account. Insurable Interest of any exceptional VALUABLES are important....e g expensive rings or valuable paintings.
6. Dreaded Disease
The impact of a DREADED DISEASE or illness on the payment of accounts, is also a serious event.A permanent nurse/care taker could also escalate this capital outlay.....
Keep in mind, that CANCER treatment(NOT COVERED by a Med Aid...is normally 40 to 50 % of such a bill) priced for the consumer's pocket, averaging an AMOUNT OF R350 000
to R500 000.And in this case, after the Divorce was settled....this could be a
big issue between ex-partners/spouses.
7. Insurable Interest
Another issue that could be of big risk, is the possible INSURABLE INTEREST that two parties could have in even
outside risks, for example children becoming disabled, grandparents becoming a financial burden onto any of the parties...and especially if their are obligations already in place. Any future divorcees that are to continue working in the same environment(Family
Business).....and potential directors of a family business(but younger members of a family...)
Revision of the current wills should be done as soon as possible. Where
applicable, a new will should be drafted, together with a HOLISTIC FINANCIAL PLAN(Estate Plan) where the two parties are aware of the various risks mentioned above.
Keep in mind that there is a "window period of ONLY 3 MONTHS in which an existing(clause
for benefit of previous spouse) will, is NOT VALID after divorce.
Remember, Once you have signed the divorce agreement, the POSSIBLE CONTROL on the other party is GONE.
info, feel free to contact me:
044 3021717 w