By Joubert Galpin Searle Associate - Shakira Ahmed (Commercial Division)
MATRIMONIAL PROPERTY SYSTEMS IN SOUTH AFRICA
As the lockdown restriction levels lessen, and marriages are once more allowed to take place, it is important to remember the significance of considering and choosing the matrimonial property system which will best suit your needs as a couple, before entering into marriage.
In South Africa, there are three possible matrimonial property systems, namely:
- In community of property;
- Out of community of property without the application of the accrual system;
- Out of community of property with the application of the accrual sharing system.
MARRIAGE IN COMMUNITY OF PROPERTY
Marriages in community of property are the default matrimonial property system in South Africa. This means that if the parties do not enter into an antenuptial contract before getting married, they will be married in community of property.
With marriages in community of property the individual spouses lose their separate estates and a joint estate comes into being on marriage. Both assets and liabilities of both spouses would form part of the joint estate, and on dissolution of the marriage by death or divorce, each party would be entitled to 50% of the net value of the joint estate.
With marriages in community of property a spouse will generally not be able to perform any actions which may affect the joint estate without obtaining the consent of the other spouse.
MARRIAGE OUT OF COMMUNITY OF PROPERTY (WITHOUT THE ACCRUAL SYSTEM)
Where the parties to a marriage would like to be married out of community of property without the accrual system, they will need to enter into an antenuptial contract which specifically excludes the accrual system.
This would result in each spouse retaining their individual estate after marriage and not requiring the consent of their spouse to enter into agreements.
When the marriage is dissolved by death or divorce, there will be no division of any joint estate (as no joint estate will have been formed) and neither party will be entitled to any accrual claim.
MARRIAGE OUT OF COMMUNITY OF PROPERTY (WITH THE ACCRUAL SYSTEM)
In this instance the parties would likewise need to enter into an antenuptial contract, and each spouse would continue to retain their individual estate after marriage. The parties would not need any spousal consent to enter into agreements.
The difference is that the parties would provide commencement values for their respective estates and list the items which they would like excluded from the accrual calculation when it takes place on dissolution of the marriage by death or divorce.
The following items would also be excluded from the accrual calculation:
- inheritances, legacies and donations;
- damages received, other than damages for patrimonial loss;
- donations between spouses, excluding donations which are made in expectation of death; and
- any item purchased with the proceeds of an excluded item
The accrual would be calculated by adjusting the commencement value to make provision for the change in value of money from the date of recording the commencement values to the date of dissolution of the marriage. The net value of each of the spouses’ estates at dissolution of the marriage would also be calculated. The adjusted commencement values would be deducted from the net value of the spouses’ respective estates, indicating the accrual in each estate.
The accrual claim will be equal to 50% of the difference between the accrual of the larger and smaller estate. The accrual claim is in favour of the party with the smaller estate.
FORMALITIES IN SIGNING AN ANTENUPTIAL CONTRACT
An antenuptial contract must be signed prior to the marriage taking place, before a notary public who will attest to the agreement and affix their seal to the agreement. The agreement must also be signed in the presence of two witnesses.
The Antenuptial contract must be registered with the Deeds office within three months of signature.
CHANGING YOUR MATRIMONIAL PROPERTY REGIME
In terms of section 21 of the Matrimonial Property Act 88 of 1984, it is possible for parties to apply to court to change their matrimonial property system. The court would however need to be convinced that good reason for the change exists and that all creditors have been notified of the proposed change. There would also need to be confirmation that no parties would be prejudiced by the change of matrimonial property system.
It is important for parties to be aware that a court application in terms of section 21 could entail substantial legal costs, it is therefore recommended that parties consider and choose the correct matrimonial property system for their situation at the outset and prior to concluding their marriage.