YOUR FINANCES …...YOUR FUTURE APRIL 2010

Staying Connected

For the Alumni of the ECCB’s Savings and Investments Course YOUR FINANCIAL

One hand can’t clap.

It was not “Money will command your the reason attention. Allow it a proper why you said ‘I do’ but no place in your life, but deny it a love is lost in enjoying the throne. Money means many financial benefits. things, but nothing so much as a yardstick by which our measure Broke n will be taken. The need of it, The Financial the use of it, the power of it, the Implications of love of it will be used by others Divorce. to define who you are and who your are not. Even you may use it to determine how you should perceive yourself. Be careful: Money is also known to be a relentless slave master. If I have learned anything from this balancing act it is the importance of defining your worth in your own terms.”

-Sidney Poitier in Life Beyond Measure: Letters to My Great-Granddaughter

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Page 2 YOUR FINANCES …...YOUR FUTURE

while marriage counselors advise • Marriage can facilitate access to against getting married for financial social security benefits and the gains, there certainly may be financial partner’s pension. gains to be had. Here are just a few:

• Marriage can buffer the impact of • A marriage allows for pooling of a job loss suffered by one partner income and hence the pool of and reduce the impact of the funds available to the married financial set-backs that arise as a couple is usually enlarged. More consequence of being out of a “One han’ caan clap money provides the possibility of job. achieving more goals. Also, a

say you hav’ fe hav’ two combined income means that the • Married persons have access to One han’ fe me an’ anoder one couple may be able to secure several legal benefits and access to more credit. This access fe yu protection: provides great financial flexibility. Tell it to the world and that it • Obtaining immigration

is a fact and residency benefits for • Marriage can allow for shared non-citizen spouse. that one han’ alone can’t clap” expenses; one electricity bill, one • Receiving spousal rent/mortgage payment, one support in the event of a internet bill. Shared expenses can divorce. Try clapping with one hand and see translate into less expenses which what sound you get…. One hand can in turn translate into greater Remember, as one internet blogger can wave, slap and do many other financial stability. puts it “you should get married for the things but it is a fact that “one right reasons – because you love hand can’t clap”. The benefits of somebody and want to spend your life • Marriage can facilitate access to uniting are expressed in many other with them-. Not for the many health-insurance coverage sayings: benefits. But if you want benefits, provided by the partner’s 1. “Many hands make light work.” marriage offers many.” employer. Many companies allow

2. “In unity there is strength” for the spouse of employees to 3. “Two heads are better than obtain coverage under the For single persons out there don’t one.” company’s health insurance plan. despair, there are many financial The coverage is either free or costs benefits to being single including 4. “Unity gives power and leads to considerably less than if the financial independence and not being achievements”. spouse were to source individual liable for or exposed to a partner’s

health coverage elsewhere. liabilities. So go ahead and sing it out Marriage is one form of unity. And, loud; “I’m single and proud.” :) SLW

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Page 3 YOUR FINANCES …...YOUR FUTURE N BROKE The Financial Implications of Divorce

YFN: Divorce…How complex is parties to the welfare of the family the process? including looking after the home or caring for the family. The court can even look to see if one of the “Everything that we Lawyer Barnard: The level of parties is entitled to a lump sum own, we own jointly. It complexity of a divorce is based on payment arising from a pension. whether the divorce is defended The court would also look at the is a true partnership. I (there are cross–petitions) or conduct of the parties. own 50% and my wife undefended. Other impacting factors would include whether or owns the other 50%. not marital property is involved as YFN: So basically when it comes The problem is that I well as the behavior of the parties. to the separation of marital assets know not which half is the court considers a wide range of issues including who is at fault? mine nor where is the YFN: What would you estimate as dividing line.” jokes Lee. a basic cost of a divorce? Lawyer Barnard: Yes. That is why lawyers always advocate for The joke ends however when things Lawyer Barnard: The cost varies the parties to sit down and discuss fall apart and the word divorce according to the lawyer(s) involved, and see how they themselves can creeps into the conversation. Then as well as what is entailed in the resolve the situation without it is no joking matter. divorce. If it has to go to trial then involving the courts in the research, trial and other fees would separation of assets. be incurred. On average the cost To try and put together a general could be anywhere from about idea as to the financial implications EC$1,500 in the case where the YFN: We spoke about the of divorce, Your Financial News divorce is undefended to $5,000 - division of marital assets, but how (YFN) spoke with Saint Lucian $10,000 and upwards in cases where do liabilities play out in this lawyer, Veronica Barnard. a trial is involved. context? Are they seen as joint?

Lawyer Barnard was quick to point YFN: What considerations are Lawyer Barnard: The legislation out that her discussion would only given by the court in determining does not speak to joint liabilities be based on the laws applicable to the division of marital assets? but I would imagine if a court is Saint Lucia. In Saint Lucia the looking at sharing property A with applicable laws regarding divorce the wife, and this property is in the are the Divorce Act and the Civil Lawyer Barnard: The court looks husband’s name I would want to Code. at the income of the parties, the think that the court would take property involved and the into account the liabilities attached contribution made by each of the to the property and focus on the

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Page 4 YOUR FINANCES …...YOUR FUTURE N BROKE Cont’d net value as opposed to the gross liabilities in the same way it is parties at that same standard of living value of the property. dealt with in a divorce. as much as possible. So the fact that she earns only a modest income and the man earns significantly more, the YFN: What would be the YFN: In what circumstances is court would in these circumstances consideration of the court if one of alimony paid and not paid? order that some sort of alimony be the parties to a divorce had assumed given. during the marriage the obligation of a business loan (automatic loan Lawyer Barnard: Generally we deduction from the salary) where that follow the English system which YFN: What happens when the party business is exclusively owned by the states that there should be a clean who is paying alimony becomes other party. Would the party who break. Meaning that each party strained by alimony and child is the signatory to the loan still be should be made to stand on his or support, having also moved on and liable for the payments after the her own two feet as much as he or re-married and so has two families to marriage has been dissolved? And she can. Say one party was not maintain as well as other personal would the courts consider this debt able to look after him/herself, for financial obligations? example, consider the following obligation when considering the division of marital assets? scenario: Husband has the means and wife does not have the Lawyer Barnard: The court would means. Let us say she does not look at all these circumstances. The Lawyer Barnard: In Saint Lucia work and has never worked, and court would not want to touch the the court would take this into the husband has a business. The child support because children grow consideration and the fact that the wife would be an ideal candidate and the expenses grow with them. party who is paying the loan is for alimony. No matter what, children have to be receiving no benefit, especially if the clothed and fed and attend school. business is ongoing. If there are But where the alimony is concerned, assets that have to be shared, and YFN: Assume the woman works I think that unless it would cause the party in question has to but her salary is very modest while extreme hardship to the receiving continue paying the loan, the court the man though not rich earns party, the court would consider in sharing the property would take significantly more than her. While reducing the alimony to take account that into consideration. The court, they were together their joint of the set of new circumstances of would work out some sort of income enabled the family to live the party paying the alimony. a middle income lifestyle. e q u i t a b l e d i s t r i b u t i o n b y incorporating the liability. However now they are separated the woman is not able to maintain YFN: Can an ex-spouse petition the her previous lifestyle. Would the court to stop paying alimony if the YFN: Would the same apply if woman be entitled to alimony in recipient party becomes intimately there was a legal separation? that case? involved with another?

Lawyer Barnard: Legal separation Lawyer Barnard: The court Lawyer Barnard: The court would is governed by the Civil Code. I am looks at the standard of living not stop the alimony purely based on assuming that the court would deal enjoyed by the family before the the fact that the party who is with the separation of assets and break-down and tries to leave the receiving alimony has begun dating.

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Page 5 YOUR FINANCES …...YOUR FUTURE N BROKE Cont’d

The court would look at other Lawyer Barnard: yes maintenance. In the case of things like - Does the individual unlawful children there is a ceiling require that money to maintain of $200 per month. When it comes him or herself in a reasonable YFN: What about common law. Is to lawful children there is no ceiling. manner, because remember the it acknowledged by the court in Saint The court considers the means of individual in question was Lucia?. the persons and what is required to accustomed to a certain standard maintain the child. of living before....Let us say the Lawyer Barnard: Yes. There is person is continuing that standard something called constructive YFN: What about pre-nuptial of living and is not living trusteeship. The court recognises the extravagantly. agreements. Are they honored by common law under that legal the court?. heading.

YFN: So unless the person gets Lawyer Barnard: Well we do have married or permanently co-habits, YFN: How many years do the the other party may not have pre-nuptial agreements, but Section parties have to be together to be 24 of the Divorce Act states that the grounds for the alimony payments recognised under that legal heading.? to be stopped?. court can interfere in a pre-nuptial agreement.

Lawyer Barnard: It does not have a Lawyer Barnard: I would want stipulated length of time. What it to think that would be the case. YFN: Rather than go through an looks for is the common intention expensive divorce can two parties that the parties should have ABC just come to a mutual agreement YFN: Can a party who is property. among themselves that one party receiving alimony petition the would buy out the other’s interest in courts for an increase in alimony YFN: So, if two people are living their joint property? payments if his or her together and they break up, can the circumstances worsen due to for court consider the circumstances of Lawyer Barnard: No. Under the example becoming incapacitated the parties, if they are deemed and therefore unable to work? community of property regime, one applicable, and accord similar rights cannot break up the community afforded to married couples? property outside death or divorce. Lawyer Barnard: Yes. Once the person who is providing the Lawyer Barnard: No. Common alimony can afford it, the court YFN. Whew! This divorce issue is law rights in Saint Lucia only relate really complicated. It just might be would look at that provided that it to the acquisition of property. There is considered reasonable in the cheaper to stay together or stay is no spousal support if there is a single. circumstance. break up.

Veronica Bernard is a lawyer practicing YFN: Is alimony paid by either Saint Lucia still has the distinction in Saint Lucia for 23 years. She party, male or female, depending between lawful and unlawful children practices in the areas of family, on who is the higher income especially when it comes to corporate, conveyancing and land law. earner.

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Page 6 YOUR FINANCES …...YOUR FUTURE Get Financially Fit: Start Your Financial Fitne$$ Programme Today

Yes, the time to begin is right A- attainable R- realistic now. So take the challenge to T- time-based.) See a few become financially fit. On your examples below: mark, get set, go.... •I will own my home in THE WARM UP five years by saving $200 per month towards the 1. Change your down-payment. attitude towards money. Physical Fitness is about Just like physical fitness, •I will contribute 10% of improving physical endurance, financial fitness requires a my monthly income to- flexibility, and strength through change of attitude and the wards my retirement regular physical activity. discipline to stick to a plan to fund. Financial fitness is not much get and stay financially fit. different. It is about improving Your attitude has to move •I will go to college in four financial endurance, flexibility, from ‘I must buy everything I years by saving 15% of my and strength through regular want’ to ‘I will focus my monthly salary for four financial activity which includes spending on those items that years. strengthening one’s financial my family and I really need’. knowledge (accessing informa- THE WORK tion on financial services and 2. If your mantra is ‘I make OUT products, taking financial money to spend it’ change it classes) and increasing one’s to “I need to save for my 1. Become more disciplined savings and investments so that future” and “If I manage my about your finances. Stop one is better able to face life’s money I can live my dreams”. spending like there is no financial demands; today and Commit to making savings a tomorrow. End carefree tomorrow. regular as opposed to a rare spending. You probably can do event. Money does not come without a lot of the things you The challenge is to get finances into your possession for the splurge on – meals out (walk under control by paying bills on sole purpose of consumption. with your lunch to work); time, reducing debt (including lawn maintenance (try cutting credit card, hire purchase and 3. Create a written budget. It’s the lawn yourself and place pay day loans), and increasing important to get expenses on the money you would have savings and investments. paper so that you can see paid to maintain the lawn into exactly how much you are a retirement fund); expensive It's never too early or too late to spending. Once you have outings to restaurants during start your financial fitness determined the amount of holiday week-ends (you can programme. Every change in the money that is going out and still have a fun time by right direction, no matter how coming in then you are better inviting friends over for a small, helps. Just start slowly able to address the areas in game of cards, scrabble etc and build gradually. You'll start your expenditure that need to and have everyone walk with to notice the difference right be reduced or eliminated. a dish). away – not only financially but also mentally. Think about the 4. Set SMART short, medium 2. Adjust expenses to reflect new stress, worries and financial and long term financial goals financial goals. Consider that frustration that will disappear for yourself and your family. by foregoing three years of when you get financially fit. SMART is the acronym for eating out for lunch and (S=specific, M-measurable, opting to walk with your

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Page 7 YOUR FINANCES …...YOUR FUTURE

lunch instead you could save THE WEIGH IN you need to correct, forgive enough for that down- yourself and re-commit to payment to your own home. It is always good your goals. Get back on to periodically track with your financial 3. Increase savings. Consider assess how far you fitness programme. Some- the state of the economy and have reached as times you need to seek your responsibilities to self, you aspire to assistance to stay on track. family and future. Are you attain your Don’t be afraid to ask for on a solid financial financial goals. help from someone who is foundation? It is advisable Consider a financially fit. to have at least six months monthly weigh in. What have in savings as an emergency you accomplished since you 3. Getting financially fit is not fund. What about began your financial fitness a fad. It’s a lifestyle retirement? What about in- programme? makeover. The results - vestments? Don’t look at Your long term success, building your savings and 1. Did your expenses get wealth and happiness. So investments as onerous skinny? And did your wallet what are you waiting for? tasks. Get creative in (savings) get fatter? Start your financial fitness amassing savings and have programme today. SLW fun doing it. Can you turn a 2. Were you able to save the

hobby into a part-time monthly amount that you th On 24 April, the ECCB in collaboration job? established? If no, why? with local financial institutions organised a What are you doing or not Financial Fitness Walk-A-Thon in St. Kitts to 4. Purchase insurance (health, doing? Don’t beat yourself raise awareness among the public around up if you get off track concepts like spending wisely and saving property, car). Insurance regularly. The goal is to organise similar can provide assistance in the temporarily. Just try to events in other ECCB member states. event of a catastrophe. understand what behaviour

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Page 8 YOUR FINANCES …...YOUR FUTURE PhotO Gallery—Financial Fitness Walk-A- Thon

Financially Fit $$ $$Get

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