Are you getting married soon? There are far-reaching decisions to be made before this important day.
Although many couples are initially caught up in the romance of a wedding and a happily ever after life together, one needs to look at the marital options available in a logical and considered manner. The options should be considered prior to marriage, as changing the marital regime during the marriage involves cost and potential conflict. One needs to look at protecting your assets and however pessimistic it may seem, the consequences of a dissolution of the marriage, whether by death or divorce.
What are the options?
South Africa has two basic marital regimes: Firstly, a marriage in community of property and secondly, a marriage out of community of property. A marriage out of community of property is further subdivided into two more options, namely with or without the accrual system.
In community of property
If you should do nothing before getting married, you will automatically be married in community of property. The effect of this is that the assets and liabilities of both spouses will fall into one communal pot. This regime could suit a spouse marrying a wealthier individual and who requires no financial autonomy. The disadvantages are that a spouse is bound by the other spouse’s endebtedness thus making your assets vulnerable to creditors; both spouses are declared insolvent if the estate is sequestrated; and the executor of a deceased spouse’s estate will administer the joint estate .
Out of community of property
Should you elect to be married out of community of property, an antenuptial contract (ANC) will need to be drafted and signed prior to the wedding ceremony.
ANC without accrual
A marriage out of community of property without the accrual system will result in the complete separation of the spouses assets and liabilities during and after the dissolution of the marriage. This is an option for spouses who wish to retain their separate assets and desire financial autonomy. The disadvantage is that a spouse will have no claim to a share in the other spouse’s estate on dissolution of the marriage. It offers no protection to spouses who are lower earners or who contribute to the marriage by raising the children or running the household. An often overlooked disadvantage to this regime is the example of a spouse who does not own and pay for the capital assets of the marriage such as the marital home, but pays for non-capital expenses.
ANC with accrual
A marriage out of community of property including the accrual system combines the advantages and negates the disadvantages of both the previously described marital regimes. It is the latest marital regime that was legislated into law. It has the advantages of protecting your assets from your spouse’s creditors and of financial autonomy during the marriage but combines it with the advantages of a delayed community of property on the dissolution of the marriage. With the accrual system, the spouse, whose estate shows no growth or less growth on divorce or the death of the other spouse, acquires a claim against the spouse for half of the value of the difference in the growth (accrual), since the date of marriage of the two estates. This is the most equitable and practical regime for most couples.
Marrying another customary law wife
It is worth knowing that a husband in those customary marriages currently recognised in South African law, who wishes to enter into a further customary marriage, must apply to the court for the approval of a written contract regulating the future marital property system of his marriages. This is to safeguard the interests of any of the parties involved. Existing spouses and the future spouse must be joined as parties to the matter. If the existing customary marriage is in community of property or subject to accrual, the court must terminate the marital regime and divide the property.
It is obvious that thoroughly assessing the marital regimes prior to your marriage and realistically applying some logical thought to your situation will be an investment in your future happiness and financial wellbeing.
Recognition of Customary Marriages Act 120 of 1998