When preparing to tie the knot, one of the most significant decisions you will make involves the type of marital regime that will govern your marriage. South African law, governed by the Matrimonial Property Act, offers three distinct options that each come with their own implications for your financial future. In this article, we will unpack these different regimes in a practical and straightforward manner to help you make an informed choice before the “I do’s.”
Civil Marriages in South Africa
In South Africa, civil marriages are the most common form of marriage, and there are three types of marital regimes that can be registered:
- Marriage In Community of Property
- Marriage Out of Community of Property with Accrual System
- Marriage Out of Community of Property without the Accrual System
Marriage In Community of Property
In this regime, all the assets and liabilities of both spouses are merged into one joint estate. This means everything you and your spouse owned before marriage, as well as everything you acquire during the marriage, becomes shared property.
- Assets: All assets (except certain inheritances or assets specified in a will) become part of the joint estate.
- Liabilities: You and your spouse are jointly responsible for all debts. Even if only one of you incurs a debt, both are equally liable to creditors.
- Insolvency: If one spouse is declared insolvent, the entire joint estate can be affected, leaving both spouses financially vulnerable.
- Management: Both spouses have equal management rights, but some transactions require the consent of the other spouse, particularly regarding large purchases, selling immovable property, or entering credit agreements.
Advantages:
- Simple, as there is no need for an antenuptial contract.
- Each spouse benefits equally from the assets acquired during the marriage.
Disadvantages:
- Both spouses can be declared insolvent if one incurs significant debt.
- Joint decision-making can be tricky if the marriage falters.
In J.R.M v V.V.C and Others [2024], the court dealt with a scenario where one spouse entered into a high-risk business venture without the consent of the other. When the business collapsed, creditors sought repayment from the joint estate, leading to the declaration of insolvency for both spouses. The court held that, despite the lack of consent, both parties were liable, highlighting the risks involved in marriages in community of property.
Marriage Out of Community of Property with Accrual System
Introduced in 1984, this regime offers a balance between financial independence and fairness. Each spouse retains control over their own estate during the marriage, but they share in the growth of their estates during the marriage upon divorce.
- Assets: Each spouse keeps their own assets and liabilities during the marriage. Upon divorce, the accrual (the increase in value of the estates) is shared.
- Exclusions: Certain assets, such as inheritances and gifts, can be excluded from the accrual calculation.
- Calculation of Accrual: The increase in the value of each spouse’s estate during the marriage is calculated, and the spouse with the smaller accrual is entitled to half of the difference.
Advantages:
- You retain financial independence during the marriage.
- Only the growth of the estates is shared, ensuring fairness if one spouse has earned significantly more than the other during the marriage.
Disadvantages:
- Requires an antenuptial contract, which comes with additional costs.
- The calculation of accrual can be complex at the end of the marriage.
The case of K.R.G v Minister of Home Affairs and Others [2022] clarified the calculation of accrual in complex financial circumstances. One spouse had significantly higher growth in assets during the marriage due to investments, while the other spouse focused on household and family duties. The court ruled that the accrual system fairly compensates the economically weaker spouse, ensuring they receive a portion of the financial growth during the marriage.
Marriage Out of Community of Property without Accrual System
In this regime, each spouse’s assets and liabilities remain entirely separate for the duration of the marriage. There is no sharing of assets, either during the marriage or upon divorce, unless agreed to in a divorce settlement.
- Separate Estates: You and your spouse each keep your own estate, including everything you owned before marriage and what you accumulate during the marriage.
- No Sharing: If you divorce, there is no division of assets unless a redistribution is ordered by the court, in certain circumstances.
Advantages:
- Full financial independence. Each spouse is responsible for their own debts and assets.
- No need to share profits or assets upon divorce unless agreed otherwise.
Disadvantages:
- You’ll need to draft an antenuptial contract, which can be costly.
- The economically weaker spouse may end up with little to no financial security after the divorce.
In G v G (A5045/2017) [2018], the court was asked to make a redistribution of assets under Section 7(3) of the Divorce Act. The wife, who had no formal employment throughout the marriage, successfully argued for a redistribution of assets from her husband’s estate, which was initially separate. The court’s decision ensured she was not left destitute, despite their out-of-community arrangement.
What About Customary Marriages?
Customary marriages, governed by Customary Law, are also recognized in South Africa. These marriages must be concluded following traditional African customs and do not require lobola for validity. Couples marrying under customary law must be over 18 years old, and both must consent to the marriage. Importantly, a party already in a civil marriage cannot enter into a customary marriage with another person.
Conclusion
Understanding the different types of marital regimes is crucial before getting married. Each regime comes with its own set of financial implications, benefits, and drawbacks. Whether you’re looking for simplicity, financial independence, or shared growth, the right regime can make all the difference in your future.
Don’t leave your financial security to chance. If you’re unsure which marital regime best suits your needs or if you want to make sure your choice is legally sound, consulting with a legal professional is the smartest move. Contact NB Makhanya Attorneys Inc. today for expert guidance on selecting the right marital regime for you and your spouse. Our team is here to ensure you make an informed decision that will protect both your assets and your future.
Reach out to us now and start your journey with peace of mind!
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