Divorce Claims
Maintenance Claims
During a divorce it often happens that parties want to settle the monthly maintenance obligation in the form of a lump sum payment. The actuary projects these monthly payments into the future in line with the applicable inflation rate, and then calculates a capitalised value (i.e. replaced with a lump sum) by considering the interest that will be earned on the lump sum, and the recipient's probability of survival (mortality). The actuary can either provide a report reflecting the capital value for each R1 000 maintenance per month based on the age and gender of the recipient, or a more detailed report capitalising individual expense items.
Instruct us nowAccrual Calculation
Where a divorce is sought based on an ante-nuptial contract where the couple were married out of community of property with accrual, the spouse with the least growth (accrual) in his/her estate can claim for accrual. The actuary updates the commencement values of each spouse’s estate at the date of marriage with CPI inflation to current terms. These include considering the nett value of assets, as well interest in pension funds. The increase in each estate is then calculated by comparing the inflation-adjusted commencement value with the current values of the estates, respectively. The spouse with the lesser accrual then has a maintenance claim for 50% of the difference between the accrual of the respective estates.
Instruct us nowValue of Living Annuity
The Supreme Court of Appeal ruled in Montanari v Montanari (1086/2018) [2020] ZASCA 48 that the value of a living annuity falls in the policyholder’s estate on divorce or death. The actuary calculates the value of the living annuity by capitalising the future income stream, allowing for taxation, mortality and interest. Different values are obtained depending on the assumed drawdown rate, and the actuary will consider a number of scenarios in order to help advise on a fair value.
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