This week, the world was shocked at the news that Hollywood stars Angelina Jolie and Brad Pitt were splitting. The news sent shock waves all over the world as it was unexpected.
Based on several media reports, Angelina is the one who initiated the divorce and accused Brad of abuse, drinking and smoking weed. Angelina is reportedly seeking custody of the children, but wants to allow Brad visitation rights.
Brad is also being investigated by the FBI and Social Services over the allegations.
“In response to your inquiry regarding allegations within the special aircraft jurisdiction of the United States; specifically, an aircraft carrying Mr. Brad Pitt and his children, the FBI is continuing to gather facts and will evaluate whether an investigation at the federal level will be pursued,” the Daily Mail reports.
While public figures’ divorces become a public spectacle, dealing with divorce is difficult for anyone who is involved. And with the process involving emotions, many couples forget vital aspects when it comes to drafting a divorce order.
So here are some tips on drafting your divorce order.
- Include security for spousal maintenance (if applicable) in the divorce order. In the event of the ex-spouse dying, his minor children will be able to claim for maintenance against the deceased estate, but his ex-wife will not. This can be addressed by stipulating in the settlement agreement to be made an order of court that spousal maintenance obligations will be binding on the deceased estate. A lump sum, based on life expectancy, can then be paid out to the ex-spouse from the estate.
- Specify that benefits in the divorce order be inflation-linked. This not only concerns maintenance, but medical and education costs. Medical contribution increases are usually much higher than the consumer price index (CPI), as is the cost of private schooling. A more sophisticated approach to annual escalation rates than CPI is needed when calculating these benefits – one needs to look at actual costs.
- Word the divorce order to ensure it gives access to an ex-spouse’s retirement savings. Pension funds can’t enforce divorce orders which don’t adhere strictly to legal requirements. They must be worded in a very specific way. The order must specify that that the ex-spouse is entitled to a ‘pension interest’, and state the exact share of the interest. The identification of the pension fund in question must also be precise.
- Ensure any benefits accruing from life or endowment policies are accurately described. The names of the particular policies and insurance companies must be included. However, it is not enough to include details of a change of beneficiary only in the divorce order. If an ex-spouse is to be the new beneficiary, then the intended beneficiary nomination also has to be lodged with the insurance company in question for it to be valid.
- Undertake a thorough valuation of all assets. Hill says this is becoming a specialist area, especially in the high net worth market. It is crucial to ensure accurate valuations are done, and it is therefore advisable to appoint a professional appraiser. It is not necessarily a good idea to convert all assets to cash. It may be prudent to transfer the assets themselves to the ex-spouse instead of liquidating them. For instance, it may not be the best time in the market to sell the family house, or to sell shares in a rising stock market.
- Conduct a detailed investigation of business assets. Business assets are often challenging to liquidate, since the business owner may not be able to dispose of assets without the consent of co-shareholders and without affecting his income-earning capacity. The divorce attorney should thoroughly examine all assets, perhaps securing expert assistance. Looks may be deceiving – the business owner may look wealthy but his venture may have huge debts of which his spouse is unaware.
- Ensure that all assets and benefits are transferred without delay. If her former spouse dies before transfer has taken place, an ex-wife may find herself at the end of a long list of claimants to the deceased estate. No matter what the divorce order states, creditors are also entitled to their share. This also applies if the ex-spouse is still alive and gets into financial trouble – creditors can attach assets which were supposed to have been transferred to the ex-wife.
- Establish a guardian trust. Often parents nominate minor children as beneficiaries of assets such as insurance policy pay-outs, property and other investment proceeds. Such proceeds are often paid out to legal guardians to manage on behalf of the children. Since the surviving parent automatically becomes the minor child’s legal guardian, irrespective of your divorce or custody agreement, you may end up with an undesirable situation where your ex-spouse receives the benefits on behalf of your children.
- Employ a qualified financial adviser as well as an attorney. It should be clear that drafting a divorce order can be a complex matter. Hill says it is essential that each party has their own financial adviser and attorney. Having two specialists who can together come up with solutions for the best possible divorce settlement agreement is invaluable.