As in all partnerships, money – the lack of it or even the abundance of it – is one of the major pitfalls in negotiating a successful relationship. No doubt the money issues were complicated before. Now the dynamics have seemingly multiplied, and the money perhaps divided. For some of us who are not very good at maths in the first place, this can cause all sorts of problems! Some of these dynamics may be out of your control; for example the unexpected and unbargainedfor non-payment of children’s maintenance, the risk of which often increases when there has been a remarriage. This, of course, leads to increased conflict between ex-spouses and between you and your partner. We will deal with conflict-resolution in a later chapter; in this one we will focus on some effective and practical ways of avoiding the pitfalls of financing a blended family.
As we have seen in previous chapters, we all bring our own personal experiences, expectations, goals and dreams with us, and we now have to find a way to blend these into a mutually satisfying and economically sound solution.
One way to begin negotiating this rocky road is for both of you to begin by drawing up new wills. This procedure will reveal an immense amount about how you view your family’s financial security.
It is strongly suggested that you seek the advice of an appropriate professional (such as an attorney who specialises in Estate Planning) and draw up a notarised will, ensuring that all interested parties have access to its contents. However, since the issues are complicated, it may be wise to investigate your options and perhaps reach some agreement about the contents of your wills before engaging in lengthy and often expensive legal consultations.
In terms of Section 2B of The Wills Act (Act No. 7 of 1953 as amended), if a person dies within three months after divorce, any will made prior to the divorce will be assumed to exclude the divorced spouse, as the law presumes most people would want to disinherit their spouse after divorce. If a new will is not drawn up within three months after divorce, it is assumed that you intend your Estate to be left to your ex-spouse.
The special challenges in drawing up the wills for adults in a blended family are complicated by the children you may have from previous relationships, as well as any property and assets you may bring into the blended family. Your first concern will be to provide for your children in the event of your death, but you may also wish to ensure that your present partner’s financial needs will be provided for in the event of your death. As your children grow up, your concern may shift from your children’s needs more towards those of your partner.
The terms and conditions of the consent papers and other court orders which govern your financial rights and responsibilities towards your child or children need to be considered. The value of assets and any investments, insurance policies or retirement policies need to be taken into account (as well as determining who is the owner and beneficiary of these policies).
Many beneficiaries are not changed from ex-partners to present partners, leading to all kinds of complications if one party dies. Be sure to change the beneficiary of your insurance and savings policies, as well as your pension fund, within three months of divorce.
Your Estate has an obligation to meet any child-maintenance orders that are in place, as well as make provision for all of your children until they are self-supporting. This means that even if you were not married to the other parent of your child, he or she can claim from your Estate to meet court-ordered maintenance payments for any shared children. This includes both minor and major children, so any child over the age of 18 can make a claim on your Estate for reasonable maintenance, provided they are not self-supporting.
Unless your step-child has been formally adopted, they will have no claim on your Estate, regardless of how long you have lived together as a family or how long you have been providing financially for your step-child. If you wish your step-child to benefit from your Estate, you will need to ensure that this is indicated in your will.
There is no obligation on a step-parent to maintain a step-child. However, at Common Law, every person has a duty of support in respect of his/her spouse. This means your new spouse must support you in order to allow you to utilise your resources, if necessary, to support your children. However, if you are not married in community of property and if you have no personal financial resources, your new spouse will not have to support your children.
If the parents cannot support a child, the financial responsibility falls on the grandparents, or on the child’s siblings, if they have the means.
As a parent, you are duty-bound to provide reasonable maintenance for your child until they are self-supporting, despite any maintenance orders stating that maintenance ends at the age of 18 or 21. Should you pass away, creditors have first pick of the assets, then maintenance court orders, then the financial needs of children who are not self-supporting (unless they are granted an inheritance that can support them sufficiently), and lastly any other heirs stated in the will.
Remember too, while wading through this process, that as your children grow up, your concern may shift from your children’s needs more towards those of your partner.
Regardless of what the divorce papers may state, parents are obliged to pay maintenance until a child becomes self-supporting. The fact that a child is working does not mean he or she is fully self-supporting and parents may need to subsidize the child’s costs in accordance with the family’s standard of living.
The age of majority is not the determining factor. Section 6 of the Divorce Act of 1979, which deals with the interests of children when their parents get divorced, refers to “provisions made or contemplated with regard to the welfare of any minor or dependent child of the marriage”. The Act states that a court granting a decree of divorce may make any order in respect of the maintenance of a dependent child of the marriage. In other words, it talks about a child who is not self-supporting rather than a child who is still a minor.
However, once a child reaches the age of majority (18 years, in terms of The Children’s Act 38 of 2005), it is the child who must make a claim for maintenance against the parent, and prove how much reasonable maintenance is needed. If there is conflict between divorced parents over the financial needs of a shared 18-year-old, it is possible for maintenance to be paid directly to the child rather than the co-parent.
The parental duty to support a child will revive, regardless of age, if the child is no longer self-supporting because of ill-health or disability.
Consideration also needs to be given to the legal relationship you have with your partner in terms of how you are married (i.e. with which type of marriage contract) or whether you are living together with or without a legal ‘cohabitation contract’.
These are the legal relationships that presently exist in South Africa:
LAWS PERTAINING TO LEGAL RELATIONSHIPS IN SOUTH AFRICA
Cohabitation (also known as Common Law Marriage) is not a legal relationship. A draft Domestic Partnerships Bill, aimed at dealing with matters arising from the break-up of a long-term, live-in relationship, was tabled in Parliament in January 2008 but, at the time of going to print, it has not come into being.
Your individual rights and responsibilities on separation or death will depend on which type of legal relationship you had with your partner. Be sure that you know how this will affect you financially in the event of your separation, or the death of one of you.
Take some time away from your children and/or any other distractions to consider all of these factors.
List all your assets (house, car, jewellery, personal items, investments, insurance policies and retirement plans) and decide what you would like to be done with them on your death. It is important to be specific about certain items if you mean your children to have them. For example, jewellery, family mementoes, house, car, investments, insurance policies, and so on. Do you need to change the beneficiary designation on any legal document pertaining to these assets?
While you have entered into a trusting relationship with your new partner, it is nevertheless unwise to leave your assets outright to your surviving partner. It is your responsibility to ensure that your children will be provided for first. However this may change as your children move into adulthood.
All kinds of scenarios will need to be explored. For example, were you to die before your present spouse and without a will, your Estate is likely to be left to your spouse, and your children may be left at your spouse’s (albeit no doubt caring) mercy. Should your spouse die (provided it is more than 30 days after your own death) then the entire estate would go to your spouse’s children, leaving your children without an inheritance.
Take care to ensure that upon both your eventual deaths, the value of your joint and/or separate estates is left to all the children (or in any other division you choose to make), despite one of you dying first.
Then there is the matter of the guardianship and care of your child upon your untimely death. Bearing in mind the co-parent’s rights and responsibilities to your child, have you considered who you would like to look after him or her? Your wishes (within the constraints of law) need to be clearly stated. Remember also that you might not wish to carry the responsibility of bringing up your partner’s children should your partner die.
A step-parent has no rights or responsibilities towards a step-child, unless they have been legally adopted. This means that you could lose the right of contact with your step-child, should your partner die. It also means you would not be responsible for providing financial support for your step-child, unless you choose to do so. If you have been part of your step-child’s life from an early age, you would be able to apply to the Court for contact with the step-child.
The factors that determine which decisions need to be made are complicated by the fact that things change over time. You will need to review your will on a regular basis as your children grow older, and as your family’s commitment to each other blends together.
Now that the future is taken of, financially speaking, we can turn our attention to other types of financial planning and the dynamics that may come into play in your blended family. It is assumed that you have devised a suitable budget and agreement around the payment of bills and household expenses. You may have considered putting all your money in one basket (so to speak), or to keep your expenditure and responsibilities separate. Clarity is likely to be required in these circumstances to ensure that there is no confusion about who pays for what. You need to put a plan in place, but even with a clear financial budget and a plan that has been drawn up and agreed upon, it is likely that issues will arise that can lead to frustration. Commonly, financial issues between ex-partners can become major causes of conflict in the blended family. Guard against this by preparing your own separate budgets as well as a joint budget.
List all your shared expenses. These will include:
List all your individual expenses (some of which may be shared). These will include:
One or both of you will have expenses which relate directly to your own child, for which you would first need to take individual responsibility. It would be wise to not let your partner take the responsibility for any of your child’s direct expenses such as clothing, cell phones or pocket-money. The following are examples:
A teenager, in particular, is a high-maintenance item at the best of times. Many of the items in the list above may be luxuries that do not even appear on your own budget or shopping lists! However, these lists are intended to be as comprehensive as possible to ensure that no unforeseen financial obligations occur.
Your task is now to assign payment of all the above items in a fair and equitable way, using both your and your partner’s income. Bear in mind that there may be understandable disputes around the responsibility for items such as maintenance to ex-partners, the children’s expenses, or life insurance, savings, retirement and pension plans, and these need to be handled sensitively.
Your own child’s expenses may very well differ from those of your partner’s child. You may have different values and/or expectations with regard to providing for your own child than your step-child. Conflict is likely to occur around money set aside for your child’s pocket-money, clothing, extra-mural choices, cost of sporting goods, cell phones, entertainment, and so on.
Make sure that once you have worked out a budget, both of you stick to it – despite any pressure from ex-spouses and, of course, from the children themselves!
‘My ex-wife has no idea about how much damage she has caused by demanding that I pay half of the cost of her choice of expensive sports equipment, fancy computers and expensive birthday presents for our children. My kids resent it when I say “no”, and my wife and her kids in turn resent it when I say “yes”, as they don’t get nearly as much given to them. It nearly cost me my second marriage until I learnt to stick to what we could afford and had planned for. I just hope that one day my kids will understand that I love them just as much as I ever did, and that I am not as bad a dad as their mother makes me out to be.’ Bert, aged 45, father to three children and step-father to two.
It can be helpful to financially evaluate and include the contribution that is being made by one or both partners in terms of child-care provided to any of the children involved. For example, should one partner be taking care of step-children during the day, perhaps by giving lifts to and from school or by looking after them in the afternoons, it may be helpful to approximate the financial contribution that this makes to the family.
Even with a clear financial budget and plan that has been made and agreed upon, it is likely that issues will arise that can lead to frustration. Commonly, financial issues between ex-partners can become major causes of conflict in the blended family.
As we have seen, disagreements between you and your ex-partner about maintenance payments, or the extra costs of children’s activities, medical expenses, school fees, etc., inevitably become disagreements between you and your present partner.
Whilst your first commitment is to any existing legal requirements, thereafter it is essential to ensure that both you and your partner find a way to support each other in your responsibilities.
‘My husband pays maintenance to his ex-wife, but she always wants more for this and that. He always pays, because he feels guilty about leaving his kids. We often can’t afford it, and then either my kids have to do without, or we can’t treat his kids when they come to us. It seems so unfair. He says that he will speak to her about it, but it never happens.’ Jody, mother and step-mother to five children.
‘The main argument that always comes up about finances is that my teenage daughter wants to wear designer-label clothing like her friends do, but my wife’s daughter, who is slightly older, is happy to wear home-made and cheaper clothing. I think it is important that my daughter is bought some designer stuff. I want to do that for her. It’s normal for a child of her age.’ Pieter, aged 50.
‘Cindy doesn’t seem to understand that I have to carry on meeting my responsibilities to my children. They have always been in a private school, and I can’t expect them to move just because I now have two more children who we don’t send to a private school. It’s only two more years, and they will have finished school.’ Neil, aged 47.
For every argument there is another totally opposite, but seemingly plausible, response. Your task as parents is to confront the key financial issues and, in consultation with one another, work through any conflict until a sustainable resolution is achieved. There is more in Chapter 10 (see page 121) on the sensitive and often contentious issue of conflict-resolution, and how best to deal with it.
It is not only the expense of supporting and maintaining your child that can give rise to frustration between you and your partner. Let’s not forget that, as in all partnerships, there are two people involved who may have very different approaches to managing their finances. One keeps all the slips, and completes a spreadsheet on a monthly basis. The other lives from one bank withdrawal to the next, without particularly noting the balance. Either or both may find that they are unable to keep to the budget, and end up placing the family in a stressful position.
Our family background, previous experiences and individual personality all inform the way in which we handle our money. However, this does not mean that we cannot work towards a more mutually amicable way of managing our finances. To avoid this can sometimes destroy your blended family.
What compromises are you able to make to ensure that conflict about money is kept to a minimum?
Which compromises would you like your partner to make?
How can you address this?
Debt is an obvious concern for any family, and its power to destroy the very healthiest of relationships is immense. The emotional challenges of blending a family are sufficient without the added stress of being unable to meet debt repayments, whether credit cards or excessive car and/or bond repayments. While creating an environment in which the family feels comfortable – for example, buying a bigger house to accommodate the step-children at weekends – may be beneficial to everyone, this has to be weighed against the stress that the added financial expenditure may bring.
Any discussion around family finances cannot be left without mentioning the importance of saving for retirement. Even in the midst of the immediacy of your present financial obligations, it is always crucial to remember that these times and demands will eventually pass and, in the not-too-distant future, your responsibility will be to look after yourself and your partner.
If you find that, despite both of your very best efforts, responsible financial planning and budgeting, frustrations and arguments about money persist, it may be wise to examine whether there are any underlying reasons for this continuing conflict (which may, at its core, have little or nothing to do with money). Sometimes it is safer to argue about finances than to address other issues which may have arisen that may seem harder to overcome.
‘No matter what other stuff was going on, Andy couldn’t stop obsessing about what I spend my money on! I own the house and earn my own money, and I quite frankly thought it was none of his business. One day he broke down and told me that he feels totally out of control. His ex-wife took his house and his children, and he says he is worried that it is going to happen again. I also realise that I am scared of being financially dependent on a man in the way my mother was when my dad left her for someone else when she was 50.’Rowena, aged 49.
Very often, our personal issues around power and control, which may arise from our inner feelings of insecurity, are played out in our relationships in the area of money. Honest reflections on the motives for our behaviour can expose our fears and inadequacies, leaving us in a healthier place to engage in an honest and open financial relationship.
Take some time to search yourself for any factors that may be affecting your judgement and response to financial issues in the home. Hopefully your partner will join you in this self-reflection.
What fears and concerns do you have around finances in the blended family?
Are there any aspects of the budget that seem unfair and leave you feeling resentful?
What past experiences have you had in your family of origin that might have given rise to your feelings and behaviour around money today?
What experiences have you had in your previous relationships that may be affecting your feelings and behaviour around money in your family today?
If there was one aspect involving your finances that you would like to see changed, what would it be (more income excluded)?
What can you do in order to experience a more honest, open relationship concerning financial matters with your partner?
Which of the financial tasks suggested in this chapter do you need to attend to?