According to Statistics South Africa, more weddings are registered in December than any other month. If you're one of the people getting ready to say I do - Do you know how much debt your fiancé currently has?
Marriage is a lifetime commitment and there's no scientific formula that you can follow to ensure its success. Budgeting for and planning your financial journey is as important for married couples as it is for single people. However, if couples can work as a team and commit to a clear financial plan that is beneficial to both, from the beginning of the relationship, you increase your chances of achieving financial success and a more stable relationship.
So if you're planning to tie the knot this summer, Liberty Legal Marketing Specialist, Faeeza Khan suggests you have these discussions with your fiancé …
Will we be married in community of property?
When you get married in community of property, you agree to share all financial obligations with your spouse. If you are married in this way, you will not be able to enter into any transaction without the consent of your spouse. For example, if you'd like to buy a new car, both spouses will have to agree and sign the contract.
All assets and liabilities accumulated before and during the marriage is the joint responsibility of both spouses. So, if you decide to marry in community of property, ask the next question…
How much debt are you bringing into the marriage?
Debt is one of the biggest financial challenges couples need to deal with. It could be worse for new couples planning to commit to a long-term relationship – Where one person could bring in a lot of debt into the relationship, which the other partner may need to help settle before they start building their wealth.
Remember, both spouses will be jointly liable for the debt, even though the original contractual agreement that was signed before the marriage only involved one signatory. That means if one of the spouses defaults on their financial obligations with a creditor, both parties will be held liable to settle the outstanding debt.
What personal and financial risks do we need to cover in our marriage?
As soon as you say, "I do", your lifestyle and responsibilities change. Your spouse becomes your responsibility both personally and financially. It also means that the risks you faced as a single person changes significantly. If something happens to you, your spouse will be left to deal with the financial risks.
So make sure that from day one you have a Last Will and Testament in place that clearly outlines what must happen to your money in the event of your death or disability. Speak to a financial adviser to implement the right risk cover that will replace your income and cover the financial needs of your family if tragedy strikes.
Should we meet with a financial adviser before we get married?
The answer to this question is almost always yes. From a financial planning perspective, it is vital that new couples ensure that their financial plans and risks are covered. A meeting with the financial adviser or planner should include estate planning, retirement planning, personal risk planning and business planning.
So, give your marriage the best chance of success by leaving nothing to chance. Meet with your financial adviser before you get married, keep your financial communication channels open and be completely honest about your finances before you tie the knot.