We will tell you that we love our families, but for some people family is a problem. Talking about a nasty parent is taboo in most societies, but unfortunately like nasty children they do exist.
When we think of a family risk we normally go straight to divorce. Divorce is not the only relationship risk we face. Family risk can be those we have a legal obligation to maintain. Often this obligation can be a duty. I personally, had to look after my brothers and they were given funds which were sorely needed for my own family. In fact I brought up my one brother, as well as maintaining two other lads financially, before my twenty-fifth birthday- an onerous task given my resources and youth.
Black families will tell you about the “black tax” where the larger family expects the working person to pay, pay and pay again. For example, where I live it is not uncommon for a person to be supporting 20 relations on one pay check. Refusal to pay, brings shame to the black person’s family and will anger their ancestors. Even in the spirit world it seems we have relationship risk! Large families, aging parents, children and siblings without work, or with expensive habits, are a drain on the working person’s income.
Marriages and risk are probably the best way to start to explain, as often the largest relationship risk though comes through divorce!
Different countries have different rules on marriage. In some countries marriage means your assets stay your assets, in some, a female’s assets become the husband’s assets and community of property. Community of property means everything the marriage partners has is equally divided. An accrual system, keeps certain assets separate and has many flavours. The accrual could exclude everything in the marriage. This means the person is treated as though no marriage has taken place. An accrual system could exclude certain items from the combined marriage property, or could exclude items owned by each person before the marriage but include all property received during the marriage.
The treatment of the marriage or combined property plays a large role in how divorce or domestic partner break ups can affect retirement saving.
Marriages in South Africa today are governed to a large degree by the Matrimonial Property Act{3} of 1984 (as amended in 1988) or the Civil Union Act, 2006 (Act No. 17 of 2006). The Civil Union Act is an act of the Parliament of South Africa, which legalised same-sex marriage. It allows two people, regardless of gender, to form either a marriage or a civil partnership. Both these acts require that persons who wish to marry need to decide, before their marriage, whether they wish to enter into an ante-nuptial contract (ANC) or not. The default union will be a community of property union in which all the assets are put into the marriage and each partner has an equal share in all assets.
The Matrimonial Property Act provides that in respect of marriages out of community of property or Antenuptial contract marriages, entered into after 1 November 1984 can be community of property marriages in part or in the whole. Anything the individuals own before marriage will be included in the marriage property at the point of marriage if it is before 1984. The 1984 system was because prior to that date the female was not allowed to own property unless a male was able to “guide her” In other words before 1984, women were considered to need a male parent or husband. Well, we showed them, didn’t we ladies?
The accrual system after 1984, can be excluded entirely or varied by the spouses, but such exclusion or variation must be expressly provided for in an ante-nuptial contract signed before the marriage. Post nuptial contracts are allowed but these are considerably more complex and expensive.
Black South African males are allowed to have multiple wives in terms of the customary marriages act{4}. After the second marriage, these marriages are considered to be accrual marriages, in which no assets are shared unless so stipulated in the marriage contract. The first wife has to agree to change the marriage contract if an antenuptial contract is not in place.
If in an accrual marriage, a spouse divorces the other spouse, they are entitled to a share of the combined property of the marriage and this includes the pension interest. It is always advisable to enter into an ante-nuptial contract or ANC which should stipulate retirement funds are excluded from the matrimonial estate.
On death of the member of the pension fund, the spouse has a claim on the estate of such a member even if they are subject to an ANC or estranged. This claim takes into account the age, earning capacity, standard of living, existing and expected means versus the financial needs of the surviving spouse, as well as the size of the deceased’s distributable estate.
In calculating the possible claim a surviving spouse might have, an actuary will take into consideration the effects of inflation, ensuring that the amount of the claim will be sufficient to maintain the surviving spouse over his/ her expected lifetime. The executor is empowered to create a trust for the benefit of the surviving spouse, in settlement of the claim for maintenance.
The second area of relationship risk is from children{i}. Children are in many countries considered to be dependent on the parent until they become self-sufficient. In other words your forty year old problem child with his two girlfriends and 16 children can be your problem for ever! Our next cameo illustrates this admirably.
Maintance is one the areas we will have to look at in our Chapter on death as well. Maybe we should use Stephens’s case as part of family planning training! Who would want such a child? Unfortunately Stephen is only one person, of many parents, who have offspring that believes Mommy and Daddy need to provide for ever.
Your parents are another relationship risk. Parents come in all shapes and sizes. None of them is perfect. Some parents are kind and others controlling and selfish.
Our cameo illustrates how we need our parents, even when they are not perfect.
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Desie had a mother who was confined to a wheelchair. Desie ran a successful business, but had not been able to sustain a relationship as a result of her mother. Her mother ran her life and kept her on a tight rein. If Desie made up her mind about anything she would explode with anger. Desie was not an only child, but she was the youngest and her sisters on marriage, had ensured they moved away from her mother. Desie was fifty when I met her and she was physically unable to make a decision outside of her business, without her mother’s consent. Strangely it was later so seen that the success of the business in part was due to her mother. Desie had tried to break free of her mother. While at university she had arranged to live in residence there. Her mother had made her year unbearable with threatening suicide or stating she was ill. Desie had capitulated and moved back home. Desie told me she was desperate to break free of her mother, but when we looked at the relationship, it was easy to see, that the habit of being with her mother, was going to be a difficult one to break. This was borne out when the mother was placed in a home after falling and breaking a hip. Desie’s business during this time ran into trouble as she could not manage the demands on her time and the decisions she had to make. With counselling, Desie understood that it was better for her to have her mother at home with a nurse then out of her life. Fortunately money was not an issue in this case. With a full time nurse available, Desie was able to start taking small breaks from her mother in preparation for the time when the woman was not going to be in her life. Self-confidence training and the ability to make personal decisions needed to be taught to this fifty year old and her mother had to stop being the alpha person. On her mother’s death, Desie found a partner who was very like her mother in nature and within months moved in with him. Ultimately we could see that she needed the control and was not prepared to take her private life into her own hands. She died two years later of a heart attack. In her own way Desie had become programed to expect a controlled private life, but controlled her business life. |
Desie always supported her mother, as she was not a wealthy woman, but what happens if the parent leaves your life and then returns demanding assistance?
The courts have shown that they will expect the biological child to provide for the parent. My experience is most people do this out of a sense of decency, and for love of those parents who brought them up. There are however those parents that one wishes you could divorce. These parents are not only Mother –in-laws! A parent who claims support from a child must prove his need and the child’s ability to support. A more stringent criterion of need is applied to parents than to children. In court rulings it is seen that the support of parents normally will be confined to the basic needs, namely food, clothing, shelter, medicine and care in times of illness.