What is the financial toll of divorce in South Africa?

By Sore Cloete, Senior Legal Manager, Old Mutual Personal Finance.

What’s in the news?

Stats SA has released details of South Africa’s marriage and divorce statistics. The data reveals that even though the number of new marriages in South Africa continues to drop each year, the rate of divorce is on the rise[1].

What are the stats?
A total of 138 627 civil marriages were registered in 2015, 8.1% less than the 150 852 registered in 2014, while 25 260 completed divorce forms were processed in 2015, indicating an increase of 2.3% from the 24 689 processed in 2014. The 2015 divorce data revealed that there were more female than male plaintiffs, which means more women initiated divorce than men. The average ages at divorce were 44 years for men and 40 years for women. About 45.4% of these divorces took place within the first 10 years of marriage and 55.6% involved children aged under 18 years[2].

What is the financial impact of a divorce?
While the divorce process in South Africa is relatively straightforward, civil marriages can only be dissolved by the courts and the financial consequences can be profound. The costs associated with a divorce hinge on the type of divorce filed and the lawyer hired. An uncontested divorce – where both parties agree about the division of their assets and all arrangements regarding children – can cost anything between R800 and R20 000, depending on the complexity, while a contested divorce can end up costing hundreds of thousands of Rands in fees and pay-outs[3].

How can the financial blow of divorce be softened?
Talking about financial expectations before getting married, drawing up a prenuptial agreement, and maintaining open communication on the topic of finances during a marriage helps to manage expectations. Avoiding the subject can, in the event of divorce, lead to a drawn out and expensive court battle. The more you can agree to beforehand, the less you need to spend on attorney fees. If both parties are willing to cooperate, it is worth going through mediation before going to an attorney, as divorce mediators are considerably cheaper and often have a background in counselling, which can be beneficial in cases when children are involved. [4]

On a personal note…
Divorce can be financially and emotionally crippling on all parties. While it’s not a subject anybody likes to think about or plan for, working with a financial adviser will help to ensure that you are aware of the various financial complexities around marriage. It’s key to have a financial adviser on your side during a divorce settlement to advise on the outcome of policies that were taken out during the marriage and regulations around pension funds.

[1] http://www.statssa.gov.za/?page_id=1856&PPN=P0307&SCH=7035
[2] http://www.statssa.gov.za/?page_id=1856&PPN=P0307&SCH=7035
[3] http://www.fin24.com/International/DIY-divorce-20100115
[4] http://www.fin24.com/International/DIY-divorce-20100115