How does marriage affect financial planning

Getting married is an exciting time in your life but financial stress is a major cause contributing to divorce.

Deciding on a marital contract is important as it affects how you will be able to transact in the future. In South Africa we have three types of marital contracts.

In Community of Property

Getting married in community of property means that you will share everything. Your spouse automatically owns everything you do and you own everything your spouse does. This also means that you are responsible for their debt.

When it comes to estate planning, people that are married in community of property will pay more executors fees as the fee is levied on the total value of the estate.

The advantage is that income other than your employment income is

Antenuptial contract (ANC) without accrual

If you get married ANC without accrual, it means that whatever you own (assets and liabilities) remains yours and whatever your spouse owns (assets and liabilities) remains theirs. This applies to assets and liabilities attained prior to the marriage and for the duration of the marriage.

The advantage of getting married under an antenuptial contact is that your personal assets will always be protected.

Antenuptial contract with accrual

If you get married ANC with accrual, it means that whatever you own before marriage remains yours and whatever your spouse owns before marriage, remains theirs, you can specifically name assets that you wish to exclude from the contract so that it remains yours.

Everything you attain during marriage will then be shared between you and your spouse. Depending on the arrangement with the relevant institution and your ante-nuptial contract, you and your spouse may be jointly or separately liable for any debt incurred during marriage.

The advantage of this is that assets before the marriage is protected and everything that is built up together in the marriage is shared.

When a couple gets married, they are often so overwhelmed that they forget to update important documents. Some of the documents that would need updating are:

  • Your will
  • Your life insurance policies, investments and retirement plans
  • Your benefits with your employer
  • Update your car insurance to ensure that your spouse will be allowed to drive your car and is co-insured on your household items.

After you get married there are a few things you can do to save on your monthly expenses. Consider some of the following:

  • Moving to one medical aid as it might save you costs. Often the main member pays a slightly higher premium than an adult dependent.
  • Combining your household insurance. Insurers often provide discounts on bigger premiums and on more items insured. By combining your insurance you could possibly save money.

 

Contact a CFP® professional to assist you.