As stated in the previous article “Marriage in South Africa”, marriages in South Africa are governed by the Marriage Act, 25 of 1961 and the Matrimonial Property Act, 88 of 1984.
For purposes of a marriage with the legal consequence of being married out of community of property the Matrimonial Property Act is applicable. If you do not enter into an Antenuptial Contract prior to the solemnization of your marriage, you are automatically married in community of property.
For purposes of this article we shall only focus on marriages out of community of property where the spouses sign an Antenuptial Contract prior to their marriage being solemnized.
An Antenuptial Contract is a contract entered into by spouses prior to their marriage, and in the contract the spouses stipulate the terms and conditions that will be applicable to their intended marriage. An Antenuptial Contract not only influences what will happen to your assets and liabilities during your marriage, but also if you divorce or when you die.
The most common reason why people elect to marry out of community of property is to protect their assets and their financial position prior to and during the marriage. Protection is offered to a spouse against attachment from creditors of the other spouse, and the spouses retain their uninhibited right to contract with any third party without the consent of the other spouse. An Antenuptial Contract must not be seen as an obstacle when getting married, but rather as a method to protecting the assets of the spouses and protecting their family.
There are two options regarding an Antenuptial contract. The first is to marry out of community of property with the application of the accrual system or secondly a marriage out of community of property without the accrual system. In terms of the Matrimonial Property Act if you do not expressly exclude the accrual system then by default you will be married out of community of property with the accrual system.
I think there are positives with a marriage in community of property, because there is a coming together of two people, and the same applies to their respective assets, thus forming one estate.
Unfortunately, in today’s business climate it will be an unwise decision to marry in community of property and hence the legislature introduced the accrual system as part of a marriage out of community of property. This is an attempt by the Legislature to try and fill the gap between a marriage in community of property and a marriage out of community of property prior to the introduction of the accrual system (i.e. without the accrual) to give effect to the ideal of the spouses sharing equally in the profit (accrual) of marriage. The accrual system is sometimes being referred to as deferred community of property.
Out of Community of Property with the Accrual.
Spouses share in the accrual or profit of their marriage, but only when the marriage dissolves either by death or divorce. During the marriage, a spouse is not entitled to a claim for the accrual in the estate of the other spouse and subsequently no creditor of one spouse can attach the accrual of the spouse during the marriage of the spouses.
The Matrimonial Property Act states that the spouse whose estate shows no accrual or a smaller accrual than the estate of the other spouse, acquires a claim against the spouse or his estate for an amount equal to half of the difference between the accrual of the respective estates of the spouses.
A simple example follows: –
A.1 The total net asset value of the first spouse at the commencement
of the marriage R200,000.00
A.2 The total net asset value of the second spouse at the commencement of the marriage R150,000.00
B.1 Total net assets value of first spouse at the dissolution of
The marriage R1,000,000.00
B.2 Total net assets value of second spouse at the dissolution
of the marriage R600 000,00
The accrual of the first spouse is calculated to be the difference between the value at the dissolution of the marriage and the value at the commencement of the marriage, in this case being R800,000.00.
The accrual of the second spouse is calculated in the same manner as above, in this case being R450,000.00.
The Act then states that the one spouse acquires a claim against the other spouse for an amount equal to half of the difference between the accrual of the respective estates, namely R800,000.00 – R450,000.00 = R350 000.00 divided by 2. In the scenario mentioned the second spouse will therefore have a claim against the estate of the first spouse in the amount of R175,000.00.
If the spouses intend to marry out of community of property with the application of the accrual system, then it is of absolute importance that care be taken when determining the value of their estates as at the commencement of the marriage. This value will serve as prima facie proof of the spouses’ nett value of their estates at the commencement of the marriage.
Out of Community of Property without the Accrual.
The second type of marriage out of community of property is the marriage out of community of property without the application of the accrual system. The Antenuptial Contract will state pertinently that the accrual system is expressly excluded. The result of the above is that there is a complete separation between the spouses of their assets, those acquired prior to their marriage as well as those acquired during the marriage. There will not be any form of sharing of assets at the dissolution of the marriage.
The Antenuptial Contract must be prepared by a Notary Public, who is also an Attorney, the spouses will then proceed to sign the Antenuptial Contract in front of two witnesses and the Notary Public. Once the Antenuptial Contract has been signed, it is valid between the parties, and the marriage can be solemnized.
The Antenuptial Contract must be registered in a Deeds Registry in terms of the Deeds Registry Act within a period of three (3) months after the contract was signed. If the Antenuptial Contract is not registered within the three months period, then the spouses will have to apply to the High Court for an order authorizing the late registration of the Antenuptial Contract. By implication the non-registration of the Antenuptial Contract within the period of three months renders the matrimonial property system applicable, to be that of a marriage in community of property, and third parties can attach the property of any of the spouses if action is instituted against one of the parties by a third party. This however is only applicable to third parties and not to the spouses. The Antenuptial Contract is still valid between the spouses.
As stated above, the Antenuptial Contract is only a contract and the parties are free to contract with each other as they deem fit, but with certain limitations. Certain assets are excluded from the accrual system for instance an inheritance and a legacy does not form part of the accrual of the spouses’ estates, except in so far as the spouses may agree same in their Antenuptial Contract or in so far as the testator or donor may stipulate in either the will or the donation agreement to the contrary. The spouses can also agree that certain assets or future assets be excluded from the accrual of their estates.
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Author: Francois Van Pletzen