Know Your Money with Bronwyn Waner and Craig Finch
Know Your Money with Bronwyn Waner and Craig Finch
97.Understanding Antenuptial Contracts for Financial Security
Unlock the secrets to financial security as you navigate the complex world of marriage regimes with confidence. Join hosts Craig Finch, Bronwyn Waner, and Warren Grimsley on "Know Your Money" as they team up with Bianca, the insightful founder of D is for Divorce and seasoned confidence coach. Together, they offer a practical guide to understanding the antinuptial contract with accrual, highlighting its critical role in asset division during a divorce. Bianca's expertise in family law enriches the discussion, offering both established individuals and those just beginning their financial journey the wisdom they need to protect their assets and personal wealth.
During this enlightening episode, you'll discover how to structure an antinuptial contract that secures both parties' interests, focusing on crucial elements like starting values and exclusions. Bianca shares her strategies for safeguarding businesses and wealth while providing compassionate guidance for those who might feel vulnerable. Whether you're looking to bolster your financial literacy or simply seeking to understand how to manage your assets better, this episode provides a wealth of knowledge and practical advice to help you build a secure financial future. Don't miss out on the chance to equip yourself with the tools needed for informed financial decision-making, no matter your current status.
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Welcome to Know your Money, where we will explore our relationship with money and how the psychology of it impacts our financial decisions, as everyone thinks about money differently. In our podcast, we'll be presenting a variety of financial topics in an easy to understand way, which we hope will assist you with managing your money.
Speaker 2:Hi, I'm Craig Finch, co-owner of Growth Financial Planning, an independent financial planning practice, and I've been a financial planner since 1986.
Speaker 1:Hi everybody. I'm Bronwyn Wehner, co-owner of Growth Financial Planning. I'm a certified financial planner and our philosophy at our company is to grow yourself to grow your wealth.
Speaker 3:Hi everyone. My name is Warren Grimsley. I'm a director at Rogue Media and help facilitate this wonderful podcast. My main goal here is to try and understand what these two lovely people are saying, so that we can all understand.
Speaker 2:Hello everybody. Welcome to Know your Money, bianca. Good to see you back in the studio. Hello, hi, thank you for having me Just wanted to give us a bit of background about you and what you do and your business.
Speaker 4:So my name is Bianca and I am the founder of DS for Divorce and I'm also a confidence coach and I have a background in law with a specialization in family law and a keen focus on divorce and kind of everything related there too, so we spoke about marriage regimes last week and the three different types.
Speaker 2:Correct, the one that I just wanted to chat a bit more about, because I think most people have a contract, most do, and they'll get married with accrual.
Speaker 4:Correct, yeah, antinuptial with accrual right, that seems to be the most preferred one at the moment.
Speaker 2:Yeah, and that means that what I bring into the marriage, I take out with an inflation linked contract if the divorce happens. And what is accrued from that point of time? What is the growth of the marriage gets split between the two parties. So I'm going to simplify it and you can exclude things. Yeah, so.
Speaker 4:I'm going to simplify. So what happens is you can have starting values, right. So let's say you're both well-established, you have certain assets in your name. Sometimes in the ANC you'll have exclusions, which is, I think, what people want to look out for right. And then let's say you have a starting value. If you have nothing to your name, let's say you're really young, you're getting married. Both your starting values are zero, okay. And whenever you accrue in the marriage or however, your estates grow as individuals. Right, because you're now seen as two individual people in this marriage and let's say you decide to get divorced.
Speaker 4:What you are worth versus what I am worth? We take those two amounts, the bigger of the amount we subtract the lesser from the bigger and the difference. You have to pay me half of the difference.
Speaker 2:Correct, yeah.
Speaker 4:Okay, so that's how it works, not split down the middle. It's kind of the difference between the two estates. Half of that is paid to the person who has the lower of the estates have to be worth the same in the end, basically. Well, pretty much, yeah, yeah.
Speaker 1:So now talking about that part where you exclude things and now is a little bit more of an established individual, yes, so for the person that has established stuff, they do want to protect their business and their wealth Absolutely. But how do we help or guide the person that hasn't done that? That if they do get divorced and that person now has built up that entire business and has nothing, what would you recommend that they should focus on?
Speaker 4:or what should the anti-nuptial can it say something like you can keep that, but this is what I need to be able to get out how would you structure it so, again, as I said before, I mean nobody says I do to say able to get out. How would you structure it so, again, as I said before, I mean nobody says I do to say I don't right. So nobody goes into an anti-nuptial contract thinking, oh, this is going to end in a divorce. So, yes, the person who's of the bigger value will obviously want to safeguard themselves. I think it's also important to remember that, upon divorce, you can agree to divorce however you want to.
Speaker 4:Often people are in a bad space, sure, and if you are the one who has been out-earned, you don't have the money to really fight and that's where you get out-litigated, right. So you want to safeguard yourself. I would say, and a very good piece of advice that I received is chat to somebody in finance, kind of to how to structure your financial wellbeing when you're entering into a divorce. Look at certain exclusions that they are putting into the ANC. Read what you're signing, because I mean, that's a standard legal principle If you sign it, you're deemed to know what you're signing. If you have questions, ask the questions. And if you have a good relationship with somebody that you're about to marry, then ask those questions, ask the hard questions and say, look, I don't feel comfortable that you're excluding your pension fund. I don't feel comfortable that you're excluding your retirement annuities. I don't feel comfortable that your business is completely excluded.
Speaker 2:Can you exclude pensions and?
Speaker 4:RAs, that's quite scary.
Speaker 1:You can exclude my business, but you need to provide an income for me if I stop working for so long. Could you put that in the?
Speaker 4:original? You could sure, but remember you've got a starting value of your business, so your value is based on that value of the business at the time of entering into the ANC so if your business increases in value during the course of the marriage. That increase then forms part of your estate, so you are benefiting from any increase that's happening but you can exclude your business completely you can exclude the business completely. So that's what I'm referring to. That's what we're trying to protect people against.
Speaker 1:Often people exclude their whole business and then the partner stays at home and they get a salary from the husband or the wife. Yes, let's call it 30,000 Rand a month. Sure, if they get divorced, that 30,000 Rand goes because they have no job.
Speaker 4:They've got no job in essence and they don't necessarily need that.
Speaker 1:So could you say like in your contract, whatever you pay me as a amount for staying at home, that needs to stay with a 10% increase, so not putting a RAND value on the 30,000 RAND. Could you have like a clause in there that says so that's what they go to? At the end where you said the spousal maintenance, yeah. Could you kind of have your spousal maintenance clause in the?
Speaker 4:beginning of your ANC. You could possibly add that in as a clause. But again, if the partner wants to outdo you and they can out-litigate you, the court can then be approached to say, look, so let's switch it a little bit. Let's say you do get divorced and then the person who's receiving that salary then remarries.
Speaker 1:Yeah, but that could all be in that clause.
Speaker 4:You'd have to be. That would be a very extensive antinupcial contract and you can do that sure.
Speaker 3:I was going to ask we're assuming that these are, say, business owners, for example right, surely there are mechanisms by which that business owner, if he sees the divorce coming, can devalue his business absolutely, and surely that happens, as well, so much people transfer assets into other people's names.
Speaker 4:It's easy to hide money, right?
Speaker 3:that's what I'm saying, no sure so you can agree to it we can have the best intentions, so these contracts can be incredible. They can be amazing, incredibly detailed, but a devious person or somebody who feels the need to do this can easily start to do this Absolutely Without your knowledge.
Speaker 1:So then, what's your biggest piece of advice? What's the biggest thing a person should do?
Speaker 4:I think, be realistic about what you're doing and I think, sure, the best piece of advice is don't do it. No, I'm joking, I think just have good intentions and I think, when you get divorced, understand that there was a time when you really loved this person and you can respect one another still and just do what's right.
Speaker 4:And that's why you focus on mediation, then yeah, that's why I prefer mediation, because oftentimes when you get involved in litigation remember lawyers we provide a service right, and the bigger the fight, the bigger the fee, and so sometimes that kind of fuels and when you're going between when you're playing that Chinese whispers game with somebody in the middle.
Speaker 3:it's almost like when people are talking to each other on social media. Yes, they can be real nasty, but if you put them in a room together, they won't be that nasty.
Speaker 4:No, absolutely. So, that's why mediation is for me. It's why I've taken myself out of practice and gone into mediation, because I feel like the parties sometimes with again with emotions, you kind of tend to make the wrong decisions.
Speaker 3:Especially with fear If you are the lesser earner and you are worried about your lifestyle and you know you're not even trying to be greedy. You just expect to be able to live the same level of life for a certain amount of time. Absolutely Sure.
Speaker 4:And someone fights you on it. That's not a nice place to be, and you can be bullied into agreeing to something that you wouldn't ordinarily, because you're so scared of your future and kind of that security, and so oftentimes you'll find parties being bullied because they don't have the money to fight back.
Speaker 2:But I think when you get married it's a wonderful happy time, sure, but you've got to be aware of whatever you're signing Absolutely. And if your partner's got like bad intent kind of thing, I'm leaving my business out completely or this home is going to be left out of the marriage, that's a warning sign of what could happen in the future.
Speaker 2:Sure, you've just got to be aware of what you're signing and maybe more truthful to each other of why you're leaving the business out. Because you can hide everything in your business and at the end of the day, say I've got nothing, so I can't give you anything.
Speaker 4:Absolutely. And again, we all do it with good intentions, right. But I think if you have a conversation with your fiance and they have their back up against the wall and like, hang on, what's the story? Then you need to kind of consider where you're going, because marriage is about growing together and creating wealth together. And wealth is not necessarily financial wealth, it's wealth in every aspect, right? So if that conversation is happening and it's not being received, well, I would say, then really be quite calculated in what you sign and how you do it.
Speaker 1:Bea, do you have like a one-pager or something with like questions? You should ask your spouse that we can maybe put on our website and clients can go and download. I don't, but I will have one yeah. I think that would just be so helpful. And, you know, maybe like another page of what to do in your anti-nuptial contract or something like that. Let's just give some free content to people to help. Sure, I'm happy with that.
Speaker 3:Can I ask if you come across a hostile divorce and you're mediating it, how do you approach it?
Speaker 4:So the thing with mediation is the parties have to be open to mediation. So you have to come with the intent to settle into mediation. So you have to come with the intent to settle. And if you've got parties who are very acrimonious, there's something called parallel mediation, where I speak to you separate from that person. We talk separately. I kind of act like a conduit between the two parties. But the intention has to be to mediate. And sometimes if there's abuse, it's very difficult to mediate because the one party is then acting out of fear. So the parties have to be willing and if it is too acrimonious then I would have to put my hands up and say so mediation can't be court ordered, it has to be willing you can.
Speaker 4:You can be court ordered, but if it fails then I would have to issue. There's a particular document that you sign that says look, we can't mediate this. No, it's okay.
Speaker 2:I think if you go into mediation, both parties should realize that you might you might be unhappy at the end of the day, and if you're both unhappy, then that's the best solution. You have to lose equally right.
Speaker 4:Compromise equally, but also gain equally. And I think that's what I like about mediation is that we're sitting down and we're saying in return yes, and if you really the principle is, you may not love each other anymore, but you decided to enter into this together. There was a mutual respect. There was love here once, yeah, and you may have hurt each other, but the reality is respect each other enough to say this is fair. This is what I think is fair, particularly when it comes to children.
Speaker 2:Yes.
Speaker 4:I feel like the court and the money you are spending on attorneys can be better put towards your children. It makes zero sense to me.
Speaker 3:That is, for me, the immense. That's a really good way to say it to parents, isn't it yeah?
Speaker 4:absolutely, because what are you fighting for? You're fighting each other.
Speaker 3:And now your child's not going to have money for your investing 100%.
Speaker 4:So that is for me. If you are somebody who actually is for the best interest of your children, that who actually is for the best interest of your children, that should be your guiding principle. And also in divorce, remember that the better your co-parent can do, the better they can do for your child. Exactly so I've lost clients, because particularly women will come on and take him to the cleaners. But why? Because taking him to the cleaners means he can't help you. And he definitely cannot help your children.
Speaker 4:Yeah, yeah, yeah, right, so I think that's kind of the mindset you need to have. Okay, yeah, awesome.
Speaker 1:Thanks Bea.
Speaker 4:That was fabulous.
Speaker 3:Thank you, very interesting. Thank you, yeah, thank you.
Speaker 1:Appreciate it Till next time. Till next time, toodles.
Speaker 2:Thank you for listening. If you have enjoyed this podcast would like to subscribe. Please visit our website wwwgrowthfpcoza. The information we have provided in this podcast is our personal opinion. For more detailed information, please discuss your financial situation with a financial planner.