C&A Friedlander Attorneys

If you are planning on getting married, don’t let romance get in the way of ensuring your marriage contract is everything you want it to be. If you don’t draw up an antenuptial contract, then under South African Law your marriage is regarded as being in community of property. This means that both partners hold one joint estate, and each person holds an undivided half share of all assets and liabilities that form part of that estate.

The Matrimonial Property Act does allow parties to own separate property (which does not form part of the joint estate), such as donated or inherited property.

The fairness and equality afforded to each person in such a marriage, is an advantage of the system, but the nature of community of profit and loss means your marriage is vulnerable to economic recession or if one of the parties makes poor financial decisions.

The advantages of a marriage in community of property are that both parties share equally in each other’s wealth both existing at the date of marriage and any acquired thereafter, and both parties are treated as equals if the marriage ends. The disadvantage of the marriage in community of property is that on insolvency, everything is lost, and furthermore the Matrimonial Property Act restricts certain professional and business transactions unless both parties have given their consent.

Marrying out of community of property

Marrying out of community of property means there is no sharing in each other’s wealth or debts. The advantage of being married out of community of property is the protection of the solvent person’s assets from creditors if their partner becomes insolvent.

The Matrimonial Property Act provides that every marriage out of community of property, in terms of an antenuptial contract by which community of property and community are excluded, is subject to the accrual system, unless you and your partner expressly exclude it.

The accrual system

The accrual system is often referred to as a form of deferred community of property. The principle behind it is that during the subsistence of the marriage, each party to the marriage remains independent, but if the marriage is dissolved (either by death or divorce), both share in the wealth and assets accumulated by each other during the marriage.

When drawing up an antenuptial contract, both parties are required to stipulate their commencement value (the initial value of each person’s estate at the start of the marriage) and the accrual is then calculated by deducting the net commencement value of the estate from the net value of such person’s estate after deducting permitted exclusions.

The initial value can either be stated in the antenuptial contract, or in a separate notarial document  within 6 months of date of marriage. If no initial value is declared, the commencement value is deemed to be nil.

In addition, certain assets are also specifically excluded when determining the value of each person’s respective estate, including:

  • Any amount accrued by either party by way of damages by virtue of a breach of personality rights (e.g. medical negligence claims);
  • Any asset expressly excluded from the accrual system in the antenuptial contract and the assets which were acquired by virtue of the possession of such excluded asset;
  • Inheritances, legacies and donations which may accrue to one of the parties during the subsistence of the marriage and all assets acquired by virtue of the possession of such inheritance, legacy or donation, unless the parties expressly agree otherwise in their antenuptial contract; and
  • Donations between the parties (other than donations mortis causa), either as part of the estate of the donor or as part of the estate of the donee. The word donation would include gifts between the parties, money donated, property or the fruits of any property donated.

Marriage regimes cannot simply be changed by agreement

Couples who are unhappy with their marital regime cannot simply change it by agreement, and are required to obtain the approval of the High Court before registering a postnuptial contract. It is important to note that a court will not provide the necessary approval unless the parties:

  • Have sound reasons for the proposed change.
  • Give sufficient notice of the proposed change to all creditors of the parties (who may then object to the proposed change), and
  • The court is satisfied that no other person will be prejudiced by the proposed change.

The court held in Ex parte Engelbrecht et uxor [1986] 3 All SA 167 (NC) that if parties, who were married in community of property, intended for the marriage to be out of community of property, this intention alone will not suffice as “sound reason” to approve the change.

As such, couples are encouraged to obtain proper legal advice, seek independent legal counsel and take the time to ensure that you understand your antenuptial contract and/or marital regime before you get married, as failure to do so could be extremely costly down the line.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Eunice Pieterse
C & A Friedlander Inc.- Matrimonial law team
Nicole van Wyk
C & A Friedlander Inc.- Matrimonial law team