BY: MOGALE SEKGALA 22 JUNE 2020
In South Africa there are three matrimonial property regimes to choose from. The marriage in community of property, out of community of property (outright) and out of community of property with accrual. A person’s marital regime has an effect on his or her estate which effect will differ depending on each regime. It is crucial that one evaluates each option before concluding a marriage. It is also important to remember that traditional marriages are recognised as valid marriages, whether or not they are registered at the Department of Home Affairs.
THE MARRIAGE IN COMMUNITY OF PROPERTY:
If you are married in community of property, all assets and liabilities of the spouses, whether acquired before or after marriage, are shared equally between spouses at the end of the marriage. Assets in the case of marriage include the pension/ provident funds of the spouses. There is one joint estate in this regime. Spouses may in certain circumstances require the consent of the other spouse when dealing with the assets of the estate or when getting into debt.
THE MARRIAGE OUT OF COMMUNITY OF PROPERTY (OUTRIGHT):
In this type of matrimonial property regime each party retains all his or her assets and liabilities whether acquired before or after marriage. And each spouse retains his or her liabilities at the end of the marriage. As such there are two separate estates for each party. No consent is required when a spouse deals with their own assets and when getting into debt.
THE MARRIAGE OUT OF COMMUNITY OF PROPERTY WITH ACCRUAL:
This option gives you the best of both worlds, in that, it carries some aspects of the marriage in community of property and the marriage out of community of property without accrual.
You will still have two separate / individual estates but at the dissolution of the marriage (by death or divorce) a determination will be made at how much your two separate estates have grown during the course of the marriage and the spouse with the lesser/smaller estate will have a claim against the spouse with a bigger estate for an amount that will equal the difference.
In practical terms, we will take the value of your individual estates at the beginning of your marriage (same is noted and recorded in the antenuptial contract) and this value will be compared to the value of the estates at the dissolution of the marriage.
- Example: The value of your partner’s estate at the beginning of the marriage is R 500 000 and at the end of the marriage has grown to R 1 000 000 and yours is valued at R 400 000 at the beginning of the marriage and at the end of the marriage it has grown to R 800 000.
- The difference of the two estates in value at the end of the marriage is R 200 000.
- To ensure equity at the end of the marriage, the R200 000 (accrual / growth) will be divided by 2 and 100 000 will be paid by your partner to yourself so that both estates at the dissolution of the marriage are valued at R900 000.
No consent is required when a spouse deals with their own assets and when getting into debt.
CONCLUSION: If parties wish to marry out of community of property with or without accrual, they need to conclude an antenuptial contract also known as ANC. If parties do not conclude an antenuptial contract they would automatically be married in community of property. Parties who have married in community of property and who wish to change their matrimonial property regime may do so by concluding a postnuptial contract and further apply to the High Court to authorise the matrimonial property regime. We at Sekgala and Njau attorneys can offer you with both the drafting of an antenuptial contract or postnuptial contract and assist you further with the High Court application to change your matrimonial property regime.
DID YOU KNOW: One of the leading cause of divorces in South Africa is disagreements on financial decisions?