Marry for love, but do your sums for a fruitful divorce

BY LEIGH ROBERTS - WOMEN IN FORM

It's a sad fact of life that, these days, marriage is often a short-lived thing. The divorce statistics are close to a shocking one out of two for first-timers, and even worse for second- and third- timers.

Indeed, one can be forgiven, when attending a wedding ceremony, for wondering when you will be attending the bride or groom's second trip to the altar.

The high rate of divorce in the country makes it imperative that the issue is not swept under the carpet.

With that said, and still bearing the risk of being labeled a total cynic, this week's topic is the maintenance clauses in the divorce settlement agreement.

"To be less legalistic and more commercial," sums up the issue nicely, and is the view of Aaron Stanger, a Gauteng divorce attorney.

High inflation and high interest rates which cause the cost of living to rise, necessitate that the maintenance for both the spouse and/or the children is commercially structured.

The first point Stanger makes is that maintenance commitments should not be stated as a single amount in the divorce contract, but rather itemised separately as, say, cost of living maintenance, medical commitments and education commitments.

The reason for this is that the cost of each commitment rises at varying inflation rates, and so should be increased by the appropriate inflation rate each year.

Medical costs, for instance, have risen 5% above the general inflation rate for the past decade.

When it comes to the inflation adjustment for the cost of living maintenance, Stanger's view is that the annual increase should be linked to the prime overdraft interest rate, rather than the consumer price index (CPI).

"The CPI has historically been less than 'real' inflation. A recommended benchmark would be to link the maintenance obligations to say four percentage points below the prime rate."

The next point of issue is often overlooked. It's taking out a life assurance policy on the life of your ex-husband who is liable to pay the maintenance. This ensures your future maintenance payments even if your ex passes on.

In a worst case scenario, if there is no life assurance cover and there are insufficient funds in the former spouse's estate, the ex-wife and children may be left destitute.

"The ex-wife should take out sufficient cover over the life of her former spouse to cover not only the present maintenance commitments, but also future inflation-adjusted maintenance payments."

Stanger says that in a recent case it was calculated that a sum insured of at least R4-million would be required to cover a maintenance commitment of R3 000 a month plus education and medical commitments, for a period of 20 years (the children were young).

If there is a commitment for schooling or university, you should encourage your ex to start a unit trust saving or endowment policy to cater for the ever-spiralling cost of a decent education.

A mistake often made is for ex-husbands to keep their former wife or wives on their medical aid fund.

There are two risks here. First, your ex may pass on and you're left without medical cover. Second, the reimbursement of your medical bills will be subject to the overall limits imposed on each member.

The better option, says Stanger, is to take out medical and/or health insurance in your own name, and to obtain payment of the premiums from your ex.

And if you're newly divorced, remember to take a look at your retirement planning provisions.

Probably, you will have to save doubly hard in the future to make up for those lost years of not investing - or investing too little - in retirement funds, unit trusts and other investments.

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SA IS PULLING IN THE BRAIN POWER - ARTICLE IN THE CITIZEN ON FRIDAY 18 MAY 2001

BY: Hugo Hagen

South Africa is now in the top ten most sought after migration destinations according to independent consultants based in Johannesburg.

The migration tide is turning in South Africa's favour with a steady increase in the "brain flow" and a promise that it may get even better in the near future. South Africa is proving to be an increasingly popular choice for skilled professionals from most developed countries, according to a migration law specialist.

Even better news was the fact that each skilled immigrant tended to create 10 new jobs for local people once they were settled and turned to creating wealth.

"The brain drain is being reversed. The interest is overwhelming", Mr Aaron Stanger told The Citizen, pointing out how his Johannesburg recruitment office had received hundreds of enquiries from all over the world.

"Right now, South Africa is possible at number eight. But once legislation is streamlined and criteria brought in line with some international trends, we could easily climb to even more competitive levels."

Mr Stanger said first choice for any foreigner wanting to relocate would be the US. The next tier are the so-called Anglo-Saxon developed countries like Canada, Australia and New Zealand.

"The next level of choice would then involve developed European countries like France, the UK and Germany". Then comes South Africa.

Mr Stanger said they had found that these were the preferences of a typical application, such as an engineer, wanting to emigration from an Eastern European country like Poland or from South America.

The Department of Home Affairs agreed that South Africa is one of the countries which had become increasingly popular among immigrants from all over the world although the department is not directly involved in an active immigrant recruitment campaign.

Normally employers independently recruit abroad and in most cases apply for work permits where skills shortages exist.

"Ever since 1994, it has been a commonly held local and international view that the country had become a favourite destination for tourists, people seeking greener pastures and possible investors," a spokesman said.

"It is the government's policy to conduct immigration on a selective basis by admitting suitable immigrants."

He explained that applications by industrialists and other entrepreneurs, who wish to relocate their business or establish new concerns in South Africa, are encouraged.

Financially independent persons are also welcome, provided that the economy will benefit.

However, there is still a prevailing downside, according to Mr Stanger. "Over the last decade it has been very difficult, if not impossible in some cases, to emigrate to South Africa. For a country, which has lost a tremendous amount of skilled people over the last 20 years, the immigration criteria are still much to subjective. These lost skills and people have to be replaced and as the newcomers settle in, wealth is created."

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ARTICLE FROM LIFE FOCUS:

SUNDAY STAR SEPTEMBER 12 1993

NAILING THE ALIMONY - DODGERS SPECIALIST

LAWYERS ARE WILLING AND ABLE TO HELP WOMEN GET THEIR DUES IN MESSY DIVORCES

MANY WOMEN suffer humiliating financial problems after their marriages break up because they are ignorant of their rights under South African Law.

In an article in Esquire magazine two years ago, a "happily married" woman described to an interviewer how she lived in blissful ignorance for 12 years until the morning her husband told her he did not love her, had in fact never loved her and was in love with his secretary.

So far so bad. But at least she knew that her husband was financially successful, so that she and the children would be well provided for. They would continue to live in their luxurious home and she could still afford to drive her Mercedes Benz and travel abroad at least twice a year.

Wrong again. Ms Hoodwinked was forced to face more disillusionment when she found she had been robbed of alimony for herself and would receive little support for her children.

She had contributed towards her own impoverishment by signing a "trust fund for the children's education". Her husband had explained the necessity to form this "trust fund" three years before he told her he was leaving.

He had been scheming about how to obtain his freedom cheaply for several years. And the Court System blessed him by rubber-stamping the situation.

"This is called the hidden assets syndrome," says Aaron Stanger, a Johannesburg northern suburbs specialist divorce attorney. Stanger says that it is imperative for South African women to be better educated and assertive about their rights in the dissolution of marriage.

He cites numerous examples of trusting women like Mrs Hoodwinked who find themselves impoverished by husbands who shift their assets into so-called trust funds.

Women get a raw deal

"The word 'trust fund', says Stanger, "should ring warning bells. It means there could be a possibility that assets which form part of the joint estate fall out of the estate after the divorce." Stanger, who is of the opinion that women get a raw deal when it comes to divorce settlements, says that he immediately places an urgent application before the Supreme Court before a recalcitrant husband can siphon assets to an offshore company, or conveniently place his money in another company which could be owned by a friend.

As in the case of Ms Hoodwinked, the ex-husband still earns his huge monthly income and keeps his original assets and his mistress.

His ex-wife loses her home, her dignity, her husband and is set unprepared and unskilled into the job market for the first time in 12 years.

Stanger talks about dummy corporations, nominee cash accounts and the favourite scheme of all - rebonding of the couples joint home while refinancing the assets.

Another case scenarios is Ms M Poverish, a Johannesburg north, mother to two children and ditched wife of a man to whom she was married for 20 years. She tells how she was legally "cheated" by her husband - a stockbroker.

Ms Povrish's husband was raised in a conservative manner "where a woman place is in the home". He put a swift halt to his wife's career the day he married her.

Ms Poverish was allowed whatever she desired during her marriage, but she had to grovel. "My husband is a control freak," she says. "Everything that could possibly have been accumulated during our marriage is in his name. I had no money of my own. My car was in his name and naturally the house was in his name as well." She admits that although she was aware of the facts, she was powerless to protest, as she was his dependent, allowed to pursue hobbies and attend lectures at university, but never to earn or accumulate any assets of her own.

"We lived on his terms and he loved it," she says. "I could do anything that didn't mean money. Money was power to him."

Then came the rumors and eventually the reality. He was in love with another woman and wanted an immediate divorce. He had been involved with another woman for more than a year.

He promised to look after her in the manner to which she was accustomed. She knows that he "officially" earns R18700 per month after tax because she accidentally found his pay cheque in his suit pocket one morning.

But she also knows that his real money is not in his salary. As director of a large, highly profitable company she believes he earns a huge broker commission, which the company can conceal for him.

She also believes he gets a director share of the profits.

As a divorcee life is no easier. While married to him, as a woman in bondage, she at least enjoyed an affluent lifestyle.

Today, she has no lavish luxuries. She lives in his home rent-free receiving just R2 000 a month for herself and the two children. Doctors and phone bills are often left unpaid.

To the abandoned wife, her husband is a cold, calculating man. Would a brilliant mind like that accept an income of R8 000 per month (which is what he says he is left with after "honoring his obligations to his family") she asks? But who knows where he has his hidden assets?

Stanger says that often in cases such as this a husband will think to himself that if his wife is going to take him down, then they will go down together. He will fight until there is nothing left to fight over.

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FROM SPY-CATCHER TO A LADIES MAN

Aaron Stranger's career path to becoming a successful divorce lawyer representing women stemmed in a rather improbable way, from the injustices he observed while serving in the army. It was there that he realized becoming a lawyer was the only route for him to take.

But the long queuing system synonymous with becoming a member of the board in large legal practices was not for him. He was in a hurry to reach the top of the heap.

After matriculating and being drafted for compulsory military service, he completed his B Comm LLB at Wits. He served articles at Raphaely-Weiner, a leading commercial legal practice, and in 1989 he passed his board exam within six months, the shortest time on record.

While serving articles, he launched himself into the hurly-burly world in a way that certainly broke the mould.

Instead of being assigned routine small business claims, Stanger plunged into the murky world of espionage, political assassination and government cover-ups.

His brief was to represent the wives of South African military intelligence agents who had been arrested in Mozambique.

The Government's position at the time was to deny any military intelligence activity in Mozambique and thereby to desert employed agents who were captured.

Exposed

Stranger's investigation exposed the Government's dirty practices and brought to light shadowy activities. In the process Stanger placed his life in grave danger.

"I was summoned to the Burgerspark Hotel in Pretoria and threatened by a Military Intelligence colonel whose name it would be safer to omit," says Stanger. "He told me to withdraw from the case immediately, otherwise further action would be taken."

Stanger earned considerable recognition as an attorney who took on and won a case nobody else would touch.

He went out on his own in 1990 and has since fashioned himself as an attorney with a strong conscience.

While he is no longer unearthing apartheid misadventure, Stanger has carved himself a niche as a one-man warrior against social injustices.

Besides being a champion of women's rights, particularly in divorce settlements, he regularly represents clients protesting against alleged environmental and marketing immorality.

"To me it is not the number of clients I represent that is important, but their individual problems and how I might legally help them," he says.

Extract of a talk delivered at a seminar entitled "Women challenging the Future" (Sponsored by The Star and Southern.)

DIVORCED BUT NOT DESTITUTE

It is vital that adequate planning is done before, during and after a marriage. Failure to do so results in much heartache and suffering and the consequences are often felt for many years.

The reason for this is that people are anxious to get divorced as soon as possible; this is strange and unnecessary, considering that people live together unhappily for long period of time and are somehow able to maintain some semblance of normality. However, it seems that once a decision has been made to get divorced, all logic, rationality and caution are thrown to the wind.

Patience, when getting divorced, is an absolute necessity. It is said that buying a house is the single biggest financial commitment made by most people. This is wrong! Getting married or divorced are one's major decisions in life.

It is essential, as well, to retain at all times an emotional balance, and in this regard, ongoing counseling during this period is highly recommended.

The focus of this artless is what is euphemistically called "the hidden asset syndrome."

The most popular vehicle and, in fact, the best known for hiding assets is the formation of trusts. There are however, numerous 'lesser known' vehicles such as private companies, nominees, close corporations, 'girl friends,' and especially in these times, overseas assets including but not limited to, foreign currency.

In addition to these vehicles, there is an extremely subtle and sophisticated method used to hide and dissipate assets, namely debt! Debt may be used as one of the most effective means to reduces a person's net worth. It is no use getting a person half of their spouse's estate if same is being depleted by the use of the so-called 'debt mechanism.' The million-dollar question is: "Half of what?" I have always recommended that people employ the services of a chartered accountant in these matters. It is money extremely well spent!

There are various ways of hiding assets via debt including the following: Bank Overdrafts, Business Overdrafts, Bond over properties - to name but a few.

A bond can be increased as a way of hiding assets. Alternatively, a second and even a third bond can be taken out. The result is that a very valuable estate may be impoverished overnight. The use of the debt mechanism often results in the spouse's liabilities exceeding his assets.

This has extremely serious consequences with regard to the accrual system and one can even have a situation where negative accrual arises. The accrual only works in the event of a net gain. In the event of a spouse having a negative accrual, you could even find yourself in the most invidious position of having to make a contribution to your husband.

Having discussed the various ways of hiding assets, the question then remains: "What is to be done?" The answer is twofold. Namely, gaining information and proper planning.

First let me deal with information. It is vital to collect physical and tangible information to reflect the historical position of your spouse - company memoranda and articles, bank statements, bond statements, share certificates and trust deeds.

It is extremely important to gain access to this information before commencing divorce proceedings. Without tangible information it would be extremely difficult to justify to a court that an interdict is necessary. Likewise this information is of the utmost importance for the proper preparation for and conduct of a trial.

This takes me to probably the most important point, namely planning, especially financial planning. No one is asking you to be devious, yet some would say that it is extremely cynical to save for a divorce.

Yet, we take out life insurance, but we don't have any insurance against the dissolution of marriages.

Remember, divorce requires money! Without money, it is extremely difficult, if not impossible, to fight a divorce action successfully.

It is no good being sanctimonious or philosophical by saying that "The system is unfair." The reality is that the system is extremely unfair - it is also extremely costly.

Do not get confused between justice and law. They have very little to do with each other. The reality is that if your spouse is aware of how much you in fact know about his affairs, he will be more likely to settle quickly, lest you discover more. Thus, proper planning will help you settle early and save money in the long run.

It is not for me to encourage anybody to get divorced, but most of the above lessons apply equally to a healthy and lasting relationship. Where there is an equality in a relationship, parties often feel less aggrieved. If, however, you do decide to get divorced, the object is to be divorced not destitute.

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How the World Really Works: Success secrets for life

By Aaron Stanger

At the beginning of 2001, in his fourteenth year in the practise of law and business, Aaron Stanger resolved to set down his life time of experience, in law, business and the general human condition. Aaron's aim in writing this book, was to set out at the half-way mark of his life, a guide for people seeking an insight into the working of the world and business, and a guide for success for future visionaries and entrepreneurs. The intention of the book, is to be part autobiographical, part anecdotal, and part a road map for life. Aaron intends to regularly publish chapters of his book on the net, and to invite comment and debate.

Watch this space...