Marriage in community of property

Marriage in community of property

Is pension interest automatically an asset in the joint estate? Compiled by: Lize de la Harpe, Legal Advisor: Glacier by Sanlam This publication is intended for use by intermediaries. Introduction One of the ordinary consequences of a marriage in community of property is that a joint estate is created in which both spouses have an equal share. What is however not always properly understood is exactly what constitutes an asset in the joint estate. This is of particular importance when the joint estate is dissolved upon divorce. In this edition we will look at the applicable law and recent case law on this topic. Sharing in the joint estate at divorce A marriage in community of property is the automatic matrimonial property regime for most marriages in South Africa. From the start of the marriage all assets and liabilities are incorporated into a single, joint estate and all assets accumulated during the marriage also become part of the joint estate. Both spouses are joint owners and are thus entitled to an equal share of the joint estate, subject to certain exceptions. When a court grants an order of divorce the community of property between spouses comes to an end and the joint estate is divided. The Divorce Act 70 of 1979 (hereinafter referred to as the “Divorce Act”) governs divorce proceedings in South Africa. Section 7(1) of the Divorce Act specifically empowers the court to make an order in accordance with a written agreement between the parties (so called “settlement agreement”). Alternatively, in the absence of an agreement between the parties, the court is empowered to order division of...
Annuities and Divorce

Annuities and Divorce

Lize de la Harpe, Legal Adviser: Glacier by Sanlam, 8 April 2014 Introduction The question often arises why a spouse can’t claim from an annuity in the case of a divorce. The answer lies in the applicable legislation – specifically the Pension Fund Act and the Divorce Act. Pension Funds Act 24 of 1956 The aim of section 37A of the Pension Funds Act is to protect a member‟s pension benefits from his/her creditors, and it expressly limits a fund‟s ability to deduct amounts from a member‟s pension benefit. As a general rule, a fund may only make a deduction from a member‟s benefit if such a deduction is allowed in terms of the Pension Funds Act, the Income Tax Act and the Maintenance Act. This general rule is, however, subject to the exceptions set out in section 37D. Section 37D(1)(d) states a registered fund may “deduct from a member’s benefit or minimum individual reserve (as the case may be) any amount assigned from such benefit or individual reserve to a non-member spouse in terms of a decree granted under section 7 (8) (a) of the Divorce Act, 1979 (Act No. 70 of 1979)”. Section 37A of the Pension Funds Act must therefore, in the context of divorce proceedings, be read together with the applicable sections of the Divorce Act. Divorce Act 70 of 1979 Section 7(7) of the Divorce Act provides that a ‘pension interest’ (as defined in section 1) will be deemed to be a part of the assets at divorce: “7) a) In the determination of the patrimonial benefits to which the parties to any divorce...
The price of motherhood

The price of motherhood

Make sure you have a financial plan when you take time off to raise your family Women live longer and therefore need more money on retirement than men. Yet statistics show us that women tend to have significantly less savings on retirement than men. Time off from work affects retirement savings The role of motherhood, which is so vitally important to the fabric of our society, is the reason many women find themselves more financially vulnerable in their later years. Mothers tend to stop working in order to raise their children and even if it is just for a short period of time, it has an enormous impact on their retirement savings. Even when a mother returns to the workplace, she may choose a less demanding position in order to have a balance between family and work, further reducing her ability to provide for her retirement. Let’s look at the numbers: If you contribute 15% of your salary towards your retirement for 35 years from the age of 25, you should achieve an adequate pension. If you take off 5 years from age 30, you will get a pension of 80% of this amount, or would need to contribute 3.5% more (18.5%) while working. If you take off 5 years from age 34, you will get a pension of 85% of the first example, or would need to contribute 3% more while working. The reason you would be able to save slightly less than the previous example is because you would have a greater lump sum saved by the age of 34, benefiting from compounding growth If you take...

Die vier pilare van Gevreesde-siektedekking

Daar is ‘n manier om dié komplekse produk op ‘n eenvoudige manier te ontleed en te vergelyk. Die gevreesde-siekte produk kan in vier sleutelpilare opgesom word: Die eise-gebeurtenis  Die definisie Die ontwerp Siektevoorkoms   Pilaar 1: Die eise-gebeurtenis Dit verwys breedweg na die mediese toestande wat deur die produk gedek word, soos hartaanvalle en kanker.  Sommige produkte dek ‘n lang lys van toestande wat indrukwekkend lyk terwyl ander ‘n korter lys het, wat dit na ‘n minder omvattende produk laat lyk.  Maar dit kan bedrieglik wees en daarom moet ons na die ander drie pilare kyk om ‘n vollediger prentjie te kry. Pilaar 2: Die definisie Hier raak dit bietjie meer ingewikkeld, want gevreesde-siekteprodukte bied nie dekking vir elke stadium of graad van elke siekte-toestand nie.  Om die produk bekostigbaar te hou, het elke eisgebeurtenis ‘n omvattende beskrywing van hoe die mediese toestand daar moet uitsien voordat ‘n uitbetaling gemaak word.  Sommige definisies kan so streng wees dat ‘n eis eers in ‘n baie laat stadium van die siekte uitbetaal word.  Lees die fynskrif van elke eisgebeurtenis om die toespaslikheid van die voordeel te verstaan. Pilaar 3: Die ontwerp Vir verdere ontleding moet daar opgelet word na die produk-ontwerp.  Hoe is die uitbetaling van eise gestruktureer?  ‘n Eenvoudige voorbeeld hiervan is soos volg: een produk sal slegs 50% van die polis van ‘n hartaanval uitbetaal, waar ‘n ander weer 100% dekking vir die eis verskaf. met kanker, sal sommige produkte slegs 25% van die eerste stadium van kanker uitbetaal, terwyl ‘n ander 100% sal uitbetaal vir dieselfde eis. Om te bepaal of hierdie persentasies voldoende is of nie, is...

The affect of Diabetes on your cover

Due to our fast paced lives, more and more people are being affected by diabetes each year. If gone untreated the effects could cause wider health problems. What is Diabetes? Type 1 diabetes occurs in the body when the pancreas doesn’t make enough insulin and Type 2 Diabetes occurs when the body struggles to respond normally to the insulin produced. Some of the symptoms of Diabetes are: • Increased urination • Extreme thirst • Unexplained weight loss What happens when I apply for Risk cover? • You must mention your current conditions, including diabetes. • You will be required to complete a diabetes questionnaire • An Hba1c test will be done to indicate your average sugar levels. A level of 6.8 is considered to be healthy. • A rest and effort ECG • Urine micro-albumin to indicate any signs of early kidney damage. What cover can be expected? Based on each individual underwriting decision, you can expect the following: o If medical reports show that your diabetes are under optimal control, loadings can be applied on disability and critical illness. o If a state of optimal control cannot be proven, the following can be applied:  Income benefits for accidental causes  Impairment cover with diabetes exclusions  Exclusions being placed on critical illness for those impairments that are related to diabetes such as cardiac disease  Life cover loadings. Source: FA News 2012  ...