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Financial pros and cons of getting married

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Marriage. Picture: File
Marriage. Picture: File

Katherine Smith (48) lives with her partner Mike Harrington (51)* and marriage has not been high on their agenda. This is in spite of meeting at a very early age and dating for nearly nine years before they started living together.

“Even when we were considering having children, marriage was not a topic we discussed. We did, however, consider whether there could be any negative effects on our children as a result of us not being married. But at no stage was marriage a consideration. Just as an aside, there have not been any negative effects on our children at all. We are a loving family, committed to one another other and to the unit we have formed,” said Smith.

The couple has not engaged in any type of ceremony at all – even a civil union – but, Smith said jokingly: “We always say that when we are in our sixties and seventies and need a reason to have a party, that we might consider getting married.”

But Smith and her partner did take care to put together a formal contract. “We consulted a lawyer, indicating that we were wanting to live together and needed to ensure that each person was protected in this arrangement, whether it be financially or otherwise. As I understand it, this contract is similar to an antenuptial contract. This contract has been amended as our lives have changed.”

A SHARED RESPONSIBILITY

If you’re not married but living together it’s almost impossible not to have a share or a say in the financial matters of the home. There’s always going to be someone who earns more money than the other. There are cars, homes, insurance, savings and debt to consider and to pay. Marriage can formalise all of that, but according to money psychologist Winnie Kunene, it’s nothing more than a piece of paper.

“Marriage is a piece of paper that legalises relationships. In our African culture by right if I am a man and I love you, my parents will make an appointment with yours and we’ll forge a relationship and consider marriage. But there really is no difference between a married couple and people living together. Marriage is a Westernised concept.”

Debt can affect you whether you’re married or not, particularly if your finances are intertwined.

“If two people are living together and not married and one is careless with debt it might not affect both of you but economically it will affect you as someone else is not doing their bit,” said Kunene.

The advantage of marriage, however, is that it formalises what happens to the debt in the event of a break-up. If, for instance, you are married in community of property you jointly share any debt you sign up to. But your partner cannot get into debt without your consent.

If you get married under antenuptial without an accrual, then you’re not responsible for each other’s debt.

WHERE MARRIAGE CAN MATTER

When it comes to finances and shared responsibility of assets, couples can agree to who pays for what and who takes out the loans, insurance and bond without needing to get married. However, matters become more complicated if a partner dies, especially if they die intestate (without a will).

“Marriage does help in this regard as the spouse is protected by the law, which also protects the children, especially if there is no will. If you’re not married it could be difficult to get everything from the deceased partner because of potential family interference,” said Kunene.

Marriage can also help when it comes to certain taxes. “If you are married in community of property, passive income such as your rental income and interest can be spread between the two of you. So, you might pay less tax if you split it, especially if one spouse doesn’t earn a salary,” said Marc Sevitz, chief financial officer of TaxTim.

He said: “If you are married, then you can donate money to your spouse tax free [so there is no donations tax] and you can sell assets to your spouse without worrying about capital gains tax.” On death, estate duty and capital gains tax does not apply to any assets left to a spouse.

If something were to happen to your partner where he or she could not speak (that is, from a disability or accident) you might not have the final say when it came to their wellbeing and finances and you would have to make an application to the courts to be the curator of their estate, which the court might not grant you.

You will also not be seen as your partner’s next of kin. “Sadly, this is the one area that has been neglected, in my opinion, when it comes to common and general law.

“According to the law I am not recognised as the ‘next of kin’ for my partner, and vice versa. We would need to change this via a contractual arrangement. I became aware of this requirement only through friends’ experience.

“This is the one area that really needs addressing, as you never know what is round the next corner,” said Smith.

MAKING IT WORK

There are many pros and cons to not getting married, but it’s not impossible to have a working, solid relationship where finances and the home are shared. When it comes to marriage Kunene acknowledges that lobola is a mandatory thing. However, an expensive ring is something that can be argued away.

“Rings are there just to impress. The problem for most couples comes in when they know they don’t have the money to maintain the kind of lifestyle they want to project to people. That’s when they end up in debt. That’s when the marriage will end up strained.

“Almost 50% of marriages end in divorce and one of the major reasons is money. If you want to get married for ‘happy ever after’, money is something that needs to be considered and the problems that go with it need to be ironed out before moving in together and getting married.”

Kunene suggested that couples should invest their money elsewhere instead of buying a flashy ring.

“Rather put the ring money towards a deposit on a house. If you get robbed in town and your rings and watches are ripped off, then what? If you don’t have the money why would you need to go through that entire expense for a piece of gold.

“If take up a ring in debt it means you can’t even afford to be married. That’s where problems start. You are marrying each other into debt,” she said.

*Not their real names

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