|Since the commencement of the Matrimonial Property Act 88 on 1 November 1984, there have been three types of matrimonial systems available:
1. In Community of Property;
2. Out of Community of Property;
3. Out of Community of Property with Accrual.
The general rule of the South Africa Common Law provides that a marriage concluded results in the spouses being married in Community of Property automatically. If the spouses want to deviate from this general rule the law requires that a marriage contract must be executed and registered before the conclusion of the marriage.
1. In Community of Property
When spouses are married in Community of Property a joint estate is formed.
The assets and liabilities of both spouses (either obtained before or after conclusion of the marriage) are merged into the joint estate.
All assets are equally shared and the spouses are jointly and severally liable for all debts incurred by either spouse to the marriage.
Certain assets may be excluded from the joint estate, but this category is extremely limited.
This matrimonial system is extremely risky for spouses conducting their own businesses or incurring debts and often limits spouses contractual capacities as the joint estate is being bound and contracting parties will wish to have both spouses party to any contract.
This matrimonial system is rarely chosen by spouses and should almost never be recommended by legal practitioners.
2. Out of Community of Property
This matrimonial system is where, by means of a notarial marriage contract (ante nuptial contract), community of property and profit and loss is excluded.
All assets and liabilities of each spouse (either obtained before or after conclusion of the marriage) falls into his/her separate estate and that spouse owns those assets individually and is separately liable for all his/her liabilities.
Very basically, this system is one which stands for the description of whats yours is yours and whats mine is mine.
This clearly gives spouses absolute independence of contractual capacity and protects the estates of each spouse against claims by the other spouses creditors.
This matrimonial system is most often chosen by spouses who have substantial estates or incomes at the time of marriage or who is concluding a second or further marriage.
3. Out of Community of Property with Accrual
This matrimonial system is where, also by means of a notarial marriage contract (ante nuptial contract), community of property and profit and loss is excluded but where the accrual system is applicable to the marriage.
Accrual implies the sharing, on termination of the marriage, of the profits generated during the marriage.
At the dissolution of a marriage subject to the accrual system (by divorce or by the death of one or both of the spouses) the spouse whose estate shows no accrual or a smaller accrual than the estate of the other spouse, or his/her estate if he/she is deceased, acquires a claim against the other spouse or his/her estate for an amount equal to half of the difference between the accrual of the respective estates of the spouses.
The accrual of the estate of a spouse is the amount by which the net value of his/her estate at the dissolution of his marriage exceeds the net value of his/her estate at the commencement of the marriage.
This claim arises at the dissolution of the marriage and the right of a spouse to share in the accrual of the estate of the other spouse during the subsistence of the marriage is not transferable or liable to attachment and does not form part of the insolvent estate of a spouse.
This matrimonial system also gives spouses absolute independence of contractual capacity and protects the estates of each spouse against claims by the other spouses creditors.
It is a popular choice for couples who marry for the first time and have not established themselves financially at the time of marriage.
M A MALAN ATTORNEYS – THE MARRIAGE LAW SPECIALISTS will be pleased to assist you in preparing and finalising your marriage contract!