In both scenarios, it is important to take control of your finances and seek out legal and financial advice. It might cost you something upfront for advice, but it will be worth it in the long term.
It is also important to note that prevention is better than cure. If you are happily married, ensure you have sufficient cover in place to not only protect your assets from outstanding debt and duties when your spouse dies, but also your recurring expense needs. Look to various legal structures, for example trusts, in which you can house income generating assets to ensure continuity in the event that your spouse dies. Ensure that you have updated the beneficiary details on these policies.
Discuss and set up a ‘what if’/’if death’ (or nice name) file with all documents, polices and contingency plan
Advice for the newly widowed woman:
1. If he had one, check your husband’s life cover policy. Does it provide for an immediate pay-out in the event of death? If it does, claim it immediately, as his accounts are likely to be frozen until the finalisation of his estate. Some life cover providers provide for immediate pay-outs of up to R50 000, which could be very helpful in terms of household and funeral expenses.
2. Try to obtain as much information as possible about your husband’s accounts, investments, debts, debit orders and other household expenses that tend to “have paid for themselves”. Familiarise yourself with and prioritise insurance premiums – especially for your household contents, buildings, cars and medical expenses. Consult your lawyer if you have difficulty accessing information.
3. Your financial responsibilities have changed drastically, with a household depending on you for financial support. There is even more pressure on you if you have children. Ensure that the appropriate cover for income and debt protection, as well as cover for temporary or permanent disability is in place. In addition cover to additional medical expenses for you and your children, it is critical to prevent “draining” assets in order to afford additional costs (not covered by your medical aid) you or your children suffer an illness or injury.
4. Consult a financial adviser if you are inexperienced with financial planning.
5. Look to set up trusts for your children and make sure you appoint the right people to look after those trusts to ensure any benefits available to your children, i.e. from assets or life insurance products, will be managed correctly should something happen to you.
6. If you are financially down and out, make the necessary cuts, e.g. downgrade to a hospital plan if you have a medical aid. Consider applying for a child support grant, which pays out R300 per child if you earn less than R34 800 per year. Remember: Every bit helps!
Advice for the newly divorced woman:
1. As in the event of the death of a spouse, you now have a household depending on you for financial support. You might be receiving little – if any – child support from your ex-partner. Ensure you have life cover for income and debt protection, as well as cover for temporary or permanent disability
2. If your ex-spouse is not honouring maintenance payments for your children and/or yourself, you can lay a criminal charge against your ex-spouse which could lead to him or her being criminally prosecuted. If your ex is formally employed, you can make an application to the Maintenance Court for a garnishee order to be issued. This will be issued on your ex’s employer, who will then be ordered to deduct from your ex’s monthly salary the maintenance he or she should be paying. This will then be paid out to you. Alternatively, the Maintenance Court can issue a warrant of execution which authorises the Sheriff of the court to demand the outstanding monies from the defaulting spouse.
3. If there is agreed financial support for you and your children, make sure that you have a life policy that will cover those needs in the event of your ex-spouse becoming disabled or passing away. You need to look especially at products that can provide the required recurring monthly benefit that maps to you and your children’s monthly expenses.
4. Consult a financial adviser if you are inexperienced with financial planning. You will need to get financially savvy – especially in terms of planning and saving up for school fees and/or other childcare expenses.
5. If you are financially down and out, consider applying for a child support grant, which pays out R300 per child if you earn less than R34 800 per year.
Visit www.brightrock.co.za for more information on BrightRock’s needs-matched life insurance.