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MATRIMONIAL PROPERTY REGIMES IN SOUTH AFRICA


Since the Matrimonial Property Act of 1984 (1 November 1984) there are three forms of matrimonial property regimes, which can be summarised as

  1. IN COMMUNITY OF PROPERTY;

  2. OUT OF COMMUNITY OF PROPERTY, ACCRUAL EXPRESSLY EXCLUDED; AND

  3. OUT OF COMMUNITY OF PROPERTY WITH ACCRUAL.

It is important to choose the correct system for you as it affects your estate, your contractual capacity and your ability to own immovable property in your own name. It also affects your ability deal with your estate as you see fit. All of these consequences take effect at the moment of your marriage and therefore you need to consider and choose your matrimonial property regime well in advance and you should do so after consultation with an attorney. We now turn to take a look at each regime in a bit more detail.

 

IN COMMUNITY OF PROPERTY

This is the default position in South Africa, therefore if you do not enter into any agreement, or take any steps to select your matrimonial regime before your marriage; this will be your default marital regime as at the time of marriage. The natural consequence of this form of marriage is that the two separate spouses’ estates are joined as one and the law now sees one estate, not two. While this does have certain tax benefits, there are other consequences which require more immediate attention. All assets and liabilities of the two separate estates are now combined into "one pot". Consent is now required from each spouse in order to alienate or encumber estate assets, written consent may be required in some instances. Insolvency of one spouse now affects both spouses. While inheritances generally remain separate from the “estate melting pot”, the only other property which can be excluded is that which is specifically mentioned in an Ante nuptial contract concluded and registered before marriage. Considering the huge implications of a marriage in community of property, it is an alarming thought to believe that a large number of couples get married in terms of this regime due to lack of knowledge, i.e. by default.

 

OUT OF COMMUNITY OF PROPERTY, ACCRUAL EXPRESSLY EXCLUDED

This is what is known as the "what's yours is yours and what's mine is mine" regime. The two spouses estates remain completely separate, each spouse has full rights to dispose of their assets as they deem fit. Liabilities of one spouse will not affect the other and thus insolvency of one spouse will not affect the other (there are exceptions, specifically Section 21 of the Insolvency Act. In order to be married in terms of this regime, an Ante nuptial contract to this effect must be concluded and registered at the deeds office before the intended marriage. The most glaring disadvantage of this regime, which prompted the creation of the accrual system dealt with below, is that there is no financial equality in respect of contributions each spouse has made in regards to household necessities. Basically, if one spouse uses income to run the household, where the other uses their income to build an estate, there is no claim vis-a-vis such spouse. This also occurs when one spouse has stayed at home to raise children, thus sacrificing or setting back their careers, while the other spouse does not.

 

OUT OF COMMUNITY OF PROPERTY WITH ACCRUAL

This is the most appropriate marital regime in today's world. It provides for each spouses estate to remain separate in terms of assets, liabilities and insolvency and also allowing for certain assets to be excluded from the matrimonial property regime, which were acquired prior to the marriage. The accrual system will only "kick in" upon death or divorce and thus nothing changes until either of the two aforesaid events take place. The accrual is essentially a fiction. The accrual provides for each estate to be measured, together with the respective growths from date of marriage. The growth of each estate is offset against one another to ensure that the joint growth is divided equally.

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