The proprietary consequences of a marriage in South Africa are regulated by the Matrimonial Property Act 88 of 1984 (“the Act”). There are two matrimonial systems and to decide which one should be applicable to your marriage is the first and most important decision that a couple should make. It is the first step in ensuring the correct management of your potential and future wealth portfolio. It is therefore important to fully understand the legal consequences of the matrimonial system you will choose.
The different matrimonial property systems
Marriage in community of property
If no agreement is entered into between the parties prior to the marriage, such marriage is seen as a marriage in community of property. The estates of the spouses are common and both the parties have equal powers regarding the disposal of assets of the joint estate, the management thereof and/or the contracting of debts that will bind the joint estate.
The Act does however in certain instances require the spouse to obtain the consent and sometimes the written consent of the other spouse should the spouse wish to perform certain acts that will affect the joint estate. Some of the instances where written consent is required include the alienation or mortgage of immovable property, the alienation of shares, insurance policies, mortgage bonds, fixed deposits or any other financial investment forming part of the joint estate, the alienation or pledging of jewellery, coins, stamps, paintings or any other assets forming part of the joint estate. Written consent will also be required to withdraw money from a bank held in the name of the other spouse, to enter as a consumer into a credit agreement or to bind himself/herself as surety.
Should one of the parties be declared insolvent, the joint estate will be sequestrated because there are no separate estates for each of the spouses. A spouse in a marriage in community of property is consequently not protected against the claims of creditors of the joint estate should one of them be declared insolvent. This marriage regime is not recommended for spouses who owns or plan to own their own business.
Marriage out of community of property
The effect of a marriage out of community of property is that each spouse can dispose of assets of his/her estate, manage it in a manner he/she sees fit and enter into any contract without first obtaining the consent of the other spouse. This marriage regime is ideal for spouses who, for example, wish to protect their assets from creditors of the other spouse should that spouse be declared insolvent.
For a marriage to be out of community of property the parties must enter into an antenuptial contract and it must be attested to by a Notary before the marriage. The antenuptial agreement is then registered by the Notary at the Deeds Office within 3 months after it was executed. For the antenuptial contract to have any force and effect it should be perfected by the marriage between the parties. The parties can choose to have the accrual system included or excluded from their intended marriage. It is important to note that the accrual system applies automatically should it not be specifically excluded in the antenuptial agreement.
The Accrual System – frequently asked questions
1. What is the accrual system?
The accrual of the estate of a spouse is the amount by which the net value of his/her estate at the dissolution of the marriage exceeds the net value of his/her estate at the commencement of the marriage. When the marriage is dissolved, the spouse whose estate shows no accrual or a smaller accrual than the other spouse’s estate, will have a claim against the other spouse or his/her estate if that spouse is deceased.
2. What impact will it have on the marriage?
It is important to keep in mind that the accrual system will only be applied when the marriage is dissolved by death of one or both of the spouses or by divorce. The accrual system will therefore only have an impact when the marriage is dissolved.
3. How is the accrual calculated?
The claim amount would be for 50 % of the difference between the accrual of the respective estates of the spouses. When the accrual of the estate of the spouse is calculated, any inheritances, legacies, donations (including donations between the spouses), any amount received by way of damages or any asset that was excluded in the antenuptial contract or acquired by the spouse before the marriage is excluded from the calculation. The net value of the estate at the commencement of the marriage is calculated by taking inflation into account. For this purpose the weighted average of the consumer price index is used to determine the change in the value of money.
4. How do we determine and declare our commencement values?
Your nett value is determined by you declaring an estimate value of your estate. The commencement value is declared in the antenuptial agreement. Each spouse needs to declare his/her estimate nett value. If you or your future spouse had not yet built up a sufficient estate, you simply declare your commencement value as NIL. As indicated above, the antenuptial agreement must be registered at the Deeds Office. This effectively means that the document becomes public knowledge. Should you or your spouse prefer that your declared commencement values not become public knowledge, you can declare it in a separate document certified by the notary and kept in his protocol. This can be done immediately after the antenuptial agreement was attested to or at the latest 6 months after the conclusion of the marriage.
5. What does it mean if we exclude the accrual system from our marriage?
Should you wish for the accrual system to be excluded from your marriage, it has to be explicitly stated in your antenuptial agreement. The effect of excluding the accrual from your marriage is that when the marriage is dissolved, none of the spouses shall have a claim against the other spouse or his/her estate if that spouse is deceased. Both spouses have their own separate estate and whatever property, movable or immovable which he/she brought into or during the marriage, remains the property of that spouse.
Most frequently asked questions
1. What do we do if we wish to conclude our marriage in community of property?
Should you wish for your marriage to be in community of property, you do not need to do anything. All marriages in South Africa are deemed to be in community of property if no antenuptial agreement is entered into.
2. What do we do if we wish to conclude our marriage out of community of property?
You need to enter into an antenuptial agreement. The antenuptial agreement can be drafted by an attorney, but only attested by admitted notary. Contact us or submit the Spousal Information Form