Divorce smartly


Ensure your divorce settlement provides for your future needs.

Benefits and beneficiaries

When calculating maintenance make sure it’s inflation-linked. This should apply for everyday living expenses and for medical and education expenses, Clive Hill of Sanlam Trust says. This is because the cost of medical funds and education also increases annually.

If an ex-spouse is to be the new beneficiary of an endowment or life policy, the beneficiary nomination form must be submitted to the insurance company. It’s not enough to include details of a change of beneficiary only in the divorce order.

Claiming part of your ex’s pension

You could be entitled to a part of your ex’s pension interest if you were married in community of property or out of community of property with accrual.

Remember, the party who is the recipient of the benefit is the one who must pay tax on it. So if you agree on a lump sum make sure you’ve included the tax amount in the calculation, Russell Anderson of the Association for  Savings & Investment SA (Asisa) advises.


Maintenance in the event of death

If your ex-spouse dies, their minor children can claim maintenance from the estate. But you won’t be able to do so automatically, even if it was part of the divorce order that your ex would pay you maintenance.

Ensure that in your deed of settlement it’s made an order of the court that spousal maintenance obligations are binding on your ex’s estate in the event of their death. A once-off sum, based on life expectation, can be paid from his estate.

Insist on the correct wording

Pension funds can’t give effect to divorce orders that don’t comply with legal requirements. Divorce orders must state that the former spouse is entitled to a pension interest. The following is important:

  • The divorce order must be granted by a high court or regional court and the pension fund member must be a member on the date the divorce order is made.
  • The fund name must be correct.
  • The divorce order must stipulate a rand value or percentage of the pension interest awarded to the non-member spouse. The fund must be ordered to make the payment.

TIP: Remember to revise your estate planning and update your will when you divorce.

- Letitia Watson

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