Mom comes out on top after cancer and divorce
Few things can destroy wealth like a divorce, except perhaps a dread disease. Beth*, a Cape Town mother of two, has suffered both — and come out on top.
The owner of a busy guesthouse in Claremont, Beth says that part of her saving grace has been excellent life insurance and medical aid, which she had in place when she was diagnosed with breast cancer in 2006. And it has stood her in good stead financially since she discovered that she had bone cancer in 2011. Even though life, disability and severe illness cover can be expensive, she realised the importance of having this cover — especially as a single mother.
Beth's husband divorced her after the birth of their second child. He emigrated to Europe and doesn't pay maintenance.
"Although she has a maintenance claim against her ex-husband, she has always realised that she is Plan A and that Plan A has to work out, and she does not have a victim mentality," says Craig Torr, her financial planner, of Crue Invest in Cape Town.
As a single mom, planning her estate has been an important part of the financial planning process for Beth. In the event of her death, she has a well-drafted will, a trust for the two girls, guardians appointed for them, and trustees appointed to look after her affairs.
Torr says Beth is fortunate her retirement is taken care of by assets invested in a family trust held overseas. She has avoided accessing any of these assets, in spite of the medical bills.
"Although Beth has a gap cover policy in place, which funds the difference between what the medical aid pays and what the service provider charges, there are many other costs associated with cancer which are not covered by medical aid or gap cover," says Torr. "For instance, she needs to have monthly cancer treatment in the form of injections. This means that she has to take a day off work. She also relies on Uber to ferry her daughters to and from extramurals when she is ill, and these costs add up."
He says Beth has done everything right in managing her finances. She runs a tight budget and plans ahead. Both her daughters participate in sports tours, which are expensive, so she saves for these. "She has also educated her daughters from a young age about money ... both have a full appreciation of the family finances."
They intend studying at the University of Cape Town.
Torr says that since appointing Crue as her advisers several years ago, Beth has bounced all financial decisions off them.
Beth says she never feels alone in her decision-making. "I have unrestricted access to financial, legal and tax advisers, as well as a team of medical aid experts, which is fantastic."
Equally important is her group of family and friends. Torr says single mothers need to build strong support networks.
* Not her real name