Types of Matrimonial Property Contracts:

You may choose to be married in community of property or out of community of property.

Marriage in Community of Property

If you marry in community of property, then you do not need to enter into any form of ante-nuptial contract.

In the case of a marriage in community of property both spouses share equally in their assets and liabilities.  Spouses have equal powers of administration and can act independently.  Written consent of both is required for certain important transactions such as those relating to fixed property, suretyships and credit agreements.

Disadvantage:

 The disadvantage of being married in community of property is that you are responsible for each other’s debts and you could impacted upon negatively by your spouse’s insolvency/bankruptcy.

Marriage out of Community:

If you want to be married out of community of property, then you must enter into an ante-nuptial contract which must be signed before a Notary (an attorney with an extra qualification).

In the case of out of community of property you may decide if you wish to be married with - or without the accrual system.

Marriage out of Community without the accrual system:

One must enter into an antenuptial contract.

Each party retains the assets at date of marriage and no redistribution of assets takes place at the dissolution of the marriage.

Marriage out of Community with Accrual:

One must enter into an antenuptial contract also.

In this form of marriage, each spouse retains control of his or her own property but builds up his or her own separate estate and each is responsible for his or her own debts. 

On dissolution of the marriage by death or divorce, the value of the joint assets obtained during the marriage (the accrual) will be shared equally. 

The accrual is determined by calculating the difference in the nett starting value and the nett final value of the estate of each spouse with the exclusion of inheritances, legacies and donations (this is normally provided for in the contract).

On dissolution of the marriage, the value of the difference in the accrual of the two estates, taking inflation into account, is then divided equally.

For example, if:

“A” had R50 000 worth of assets at date of marriage and is worth R100 000 at date of divorce, then the accrual will be R50 000;

And if “B” had R50 000 worth of assets as at date of marriage and is worth R 150 000 at date of divorce then “B’s” accrual will be R 100 000.

Accordingly, “B’s” accrual is R 50 000 more than “A’s” accrual and if the antenuptial contract stipulates that the accrual of the marriage must be divided on a 50% basis, then “B” must give “A” R 25 000.

During the marriage the competence of the spouses to deal with their individual property is not limited in any way, provided that the one does not seriously prejudice the right of the other to share in the accrual. 

Disadvantage:

A disadvantage of the accrual system is the spouses do not share in each other’s credit worthiness which may have the result that a non-working spouse may have little credit worthiness during the marriage if that spouse’s estate is small.

Protection if married before 1 November 1984:

Please note that general protection is given to a husband or wife who was married before 1 November 1984 out of community of property and one may find that the other spouse has built up or maintained a larger estate with the direct or indirect help of the former.  The Court has a discretion to transfer part of the assets of one spouse to the other as the Court deems just.

Donations:

A donation from one spouse to the other is not revocable.  Such donations will, however, still be subject to the provisions of the Insolvency Act. 

Joint household requirements:

Persons married according to the accrual system or who otherwise agreed on complete separation of property, must both contribute to the joint household. 

In terms of marriages contracted after 1 November 1984, where one party contributes more than his/her share, he/she will be able to claim a refund of the excess only if this has been agreed on beforehand.