Wedding season is approaching and Larry Masson, financial adviser at Momentum Consult, warns against walking down the aisle without ensuring financial alignment and protection.
"While the 'business side of marriage' may seem unromantic – especially at a time when emotions are understandably running high – the reality is that money is notoriously one of the biggest sources of conflict in marriages, so it's best to get on top of it before it gets between you and your future spouse," says Masson.
When it comes to financial planning, he says marriage is like any other major life event, and should be handled with the same level of orderliness and responsibility. He provides a pre-wedding financial checklist to consider.
Decide on a marital regime
Choose a marital regime that is suited to you and your spouse, after understanding the three available options.
If you opt to get married in community of property, your assets are combined in a joint estate; getting married out of community of property means all assets are kept completely separate throughout the marriage. Then there is the option of getting married out of community of property with accrual, where what you came in with remains separate, and only the assets accumulated during the marriage are shared.
"This third route tends to be a popular choice nowadays as it is widely viewed as being the 'fairest' option," says Masson.
Draw up a prenuptial agreement
If you decide to get married out of community of property or out of community of property with accrual, a prenuptial agreement is required.
This is a legal document that lays out the division of assets in the event that the marriage should end.
"A prenup, however, should not be seen as 'planning for failure', but as a safety measure. If everything goes well, it is just a piece of paper that you will never have to use, but if things don't go according to plan, it will make matters a lot less complicated," says Masson.
Consolidate all policies and benefits
While some couples want to keep a sense of financial independence, when it comes to policies and benefit schemes, Masson says it makes financial sense to consolidate.
"This comes down to simple economy of scale economics, and avoiding the unnecessary duplication of policies. After all, you don't want to be paying twice for the same benefit or paying more than you need to be when it comes to insurance and medical aid," he explains.
Update your beneficiaries
As getting married has such a major impact on so many aspects of your life, Masson says it is a good time to check that all the beneficiaries listed on your current policies are up-to-date.
In addition to ensuring that all existing information is accurate, you'll probably want to add your new spouse as a beneficiary if they aren't one already, in the view of Masson.
Put all your cards on the table
According to Masson, it is important to make full financial disclosure and have open communication when entering into a marriage.
"Working with a financial adviser may help to ensure mutual awareness and understanding of the various financial complexities around marriage," says Masson.
"Tackling these hard-hitting issues head on will create a solid financial foundation that will stand your marriage steady for the future."