Are you about to get married? Ensure that you fully understand the financial implications of your prospective enjoined estate. If not attend to this soon after saying I do to avoid nasty surprises.
This advice is applicable to all but more so brides, says a statement from boutique investment house Imara Asset Management South Africa. This is based on a mounting concern that many new millennium wives remain ignorant about their husbands’ financial affairs.
Brides should say ‘I do’ twice … and the second time the full response should be ‘I do wish to become familiar with my husband’s finances’.
Imara MD Lara Warburton said “Many wives believe money is a man-thing when they first marry and over the years they are less inclined to raise financial issues.
“With some wives the issue appears to be that their mothers took no interest in finances and never advised their daughters to become involved.
“This is a mistake. One way of correcting it is to advise brides to say the first ‘I do’ at the wedding ceremony and follow up later with a second ‘I do’ when they inform their husbands they do intend to take an interest in financial matters.”
Warburton added that whenever possible, Imara prefers to consult both partners when discussing long-term financial plans. Frequently, the consultation is the first time a wife has been involved in a detailed examination of assets, savings, investments and liabilities.
Warburton, a Certified Financial Planner, said long-term financial planning is easier when both partners take part.
Wives have a good understanding of the need to provide for children’s education. Husbands appreciate that over-investment in home redecoration and fashionable furniture and fittings diverts disposable income from wealth accumulation.
“Getting both perspectives is first prize,” says Warburton.
Less positive scenarios may apply when the firm is approached by recently divorced wives looking to make best use of money from a divorce settlement.
“Horror stories sometimes emerge about the assumptions wives make about assets that were mortgaged to the hilt and wealth that just wasn’t there,” says Warburton.
In one case, a couple owned three homes, five cars, a boat and ran two businesses. They led a lavish lifestyle and the wife assumed her husband was a wealthy man. In fact, there was only significant equity in one property. Most assets were leased or bonded and several loans had to be settled.
To extract some capital the only property with positive equity had to be sold. As this was a distressed sale at the bottom of the housing market, the divorcees emerged with hardly any capital.
“Ignorance of financial matters renders wives vulnerable,” says Lara Warburton, “especially in a society with a high divorce rate.
“The sensible course is for both husband and wife to start married life as real partners and share information on financial matters. Share from the outset. If there are upsets later, both parties are in the picture.
“Tears may still be shed, but they won’t be shed for wealth that was assumed to be there … but wasn’t.”