You’re getting divorced. Now what?

Last updated on 1st April, 2020 at 04:59 pm

In the process of getting divorced? This life-admin checklist can help you ensure your finances and policies are updated accordingly.

Policies and beneficiaries

If you’re getting divorced, make changes to your short-term, life and medical insurance policies. “You might want to take out a new personal life insurance policy, and name new beneficiaries for your life insurance benefits, should you no longer wish your ex-spouse to be a beneficiary,” says Danelle van Heerde, head: advice processes and tools, Sanlam Personal Finance.

Medical aid cover

“Ensure that children are covered as dependants in either you or your ex’s medical aid scheme. If maintenance payments extend to medical aid, make sure they increase according to typical medical aid rate hikes, often around 5% higher than the consumer price index (CPI),” says van Heerde. Find out how to choose the right medical aid here.

Last will and testament

Your will also needs to be changed, especially if your ex-spouse was a beneficiary. There is a legal three-month grace period after the divorce, meaning that if you pass away within three months of an official divorce proceeding, it will be assumed that you did not want your ex-spouse to be your beneficiary. Your ex-spouse will be treated as if they were deceased, thus allowing your estate to go to your children or next of kin.

However, if you did not legally change your will after three months, it is assumed you did want your ex-spouse to remain your beneficiary, and they will receive the stipulated inheritance.

Children’s inheritance

If you are not comfortable with the surviving parent managing the money left to minor children in the event of your death, you can use a guardian trust (for beneficiary payments on life policies), guardian fund (for beneficiary payments on retirement funds) or testamentary trust, and the trustees will manage it on their behalf and to their sole benefit.

Not sure which one suits your needs? Read more about these options here.

Retirement fund

Often, a divorce results in a lump-sum settlement from an ex-spouse’s retirement fund. “Preserve the monies in a retirement fund – not least of all because of the tax advantages of doing so,” adds van Heerde.

Feeling overwhelmed by all the admin? You’re not alone, and the good news is a financial planner can help get you sorted. Plus, you’ll earn 8 000 tier points for meeting with your financial planner.