How blended families can live in financial harmony

SOUTH Africa has one of the highest divorce rates on the continent, with Stats SA reporting that about 40% of marriages end before their 10th anniversary. After a divorce, people typically enter into new partnerships, often bringing with them children from a previous marriage. It's in these "blended" families that finances can become extremely complex.

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What happens when partners with their own children and separate financial histories merge to form a new family? Who pays for what? How do you manage obligations to children from a previous marriage while protecting your new household? And how do you navigate sensitive issues around inheritance and estate planning?

Claire Steyn, a Certified Financial Planning professional at BDO Wealth Advisers, and Kyle Abrahams, in-house attorney at BDO Wealth, are experienced in dealing with the financial needs of blended families and offer guidance on how to deal with the complexities.

Legal obligations on divorce

Abrahams says the law is clear on your obligations to your children and possibly to your ex-spouse. He says the two main legal issues that usually come up are:

· Parental rights and responsibilities. “These are set out in the Children's Act. When a couple with children separates, it's important for them to put a formal parenting plan in place. This outlines things like where the children will live, how decisions will be made, and how often the children will see each parent. A proper plan helps both parents to work together more peacefully and gives them something to rely on legally if one parent doesn't stick to the agreement,” he says.

Child and spousal maintenance. “Child maintenance is a legal obligation and duty that biological and adoptive parents have - it's not something you can opt out of. This obligation doesn't end automatically when a child turns 18; instead, it may continue until they are able to support themselves, which is something a court will decide. Spousal maintenance is different - it's not automatic and only applies if a court orders it after considering various factors,” Abrahams