These are unprecedented economic times. Businesses and investments have become tricky to run.
And sometimes, marital relationships are built on foundations that might be considered sandy. Some people end up together only based on the financial benefits they receive from their partners.
Nowadays, it is not uncommon for spouses to split financial obligations.
However, money matters are among the leading causes of strain in many marriages. When hard financial times hit, some partners walk away.
Some develop protectionism tendencies, hiding money. Sometimes, a spouse can find themselves locked out of what they thought were investments or properties previously shared as matrimonial property.
Matrimonial property is anything that you acquire during the subsistence of the marriage. However, matrimonial property can only be put in place where no other law supersedes it.
For example, unless spouses open a joint account when putting money in financial institutions, then whoever is stated as “next of kin” or “beneficiary” gets left with the money after the demise or incapacity (physical or mental inability to manage one's affairs).
Martha Nzomo, a financial adviser at ICEA Lion Group who helps individuals, companies and groups invest their money, says "not everyone automatically puts their spouses as next of kin."
"It’s not a must, I can put my father, mother, sister or brother. Unless I come and update that later,” she adds.
Ms Nzomo says people prefer writing the names of people they trust in the beneficiary’s clause of their investment products’ forms as you do not need to put your spouse.
Others say they are doing that to diversify and ensure there is no family conflict since they have already put their spouses as next of kin on their other investments.
In instances where couples want to have a short-term savings account, like a money market account where you can access money from time to time, opt to open a joint bank account.
“Today, we [wife and husband] may be on good terms and opened a joint money market account. But along the way we fall out. Who then is supposed to be paid the money? How is the company supposed to favour one party over the other? We can’t pick sides,” says Ms Nzomo.
However, for things like school fees policy, it is done through consent. A couple can decide to who the money will be sent, after the maturity of the education policy.
Outline financial obligations
However, she believes that agreeing that the financial obligations that they each individually had before coming together should stay separate and not automatically consolidated is the best way.
“Whatever you did with your money, that’s yours. Whatever I did with mine, that’s mine. However, you need to state what the purpose of opening a joint account is, like family trips or the children’s future education. Always make sure the mandate (how the account is to be run) requires both of your consents; on everything. We are human, and people can change any time, but also to protect your relationship,” says Ms Nzomo, who has been in the industry for over 10 years.
Another thing you might want to also do is make sure you read all financial documents that a spouse brings to you concerning assets or accounts you hold together.
The law states that ignorance is not a defence, and that also comes down to where a spouse claims they did not know what the other person was attaching as collateral to loans taken for various reasons.
“You may have owned a piece of land, but while in a marriage you built on that piece of land. The buildings then become matrimonial property while the land remains individual property. Matrimonial property is co-owned with your spouse even if they did not contribute money in their acquisition through what is called contribution in kind. However, the other spouse has to have knowledge of the dealings of the other or else they won’t be able to claim these,” says Christine Muthoni, an advocate of the high court.
After a divorce, the next thing that happens is the division of property. If you have a lawyer, you will file a suit called a declaration of interest in matrimonial property.
A good lawyer will file this even before filing for division of matrimonial property; pending hearing and determination of the divorce; to ask for an injunction giving a list of the properties one knows they own so that they are not interfered with.
Interference may include transfer of ownership to either one’s mother or a company they have registered, or selling off of some property whose benefits they believe the other spouse shouldn’t be able to enjoy so that they are left with zero after all those years.
Even inheritance received during the subsistence of a marriage becomes matrimonial property and the other spouse is entitled to a share of that. However, the property shouldn’t be under any other law.
“If you don’t want your spouse to interfere with anything you acquired before or during your marriage, I encourage people to do pre-nuptial agreements. Disclosure is important. You list down everything and say in case of a divorce, the property I have before the date of the marriage cannot be touched,” adds the certified divorce coach, by the International Coach Federation – ICF, who is a published author with her book Conscious Uncoupling.
Also, you may decide to do post-nuptial agreements and they will still hold in court.
