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South Africa has a vast and developing  marital system, how to pick will depend on various factors like what your business risk is and whether you are looking to protect your assets amongst other reasons. This piece will at the end give you an overview as to what options are available to you when considering which matrimonial property  system to pick and which one best suits your needs.

TYPES OF SYSTEMS AND IMPLICATIONS

There are two types of marital system that are followed in South Africa In Community Of Property which is the default system and Out Of Community of Property being the other which is reached through by means of an Antenuptial Contract (An Antenuptial Contract; is agreement between spouses that states the entitlements and obligations of in terms how the assets of each ones estate, (”i.e. their total worth=assets-liabilities”), will be administered). South Africa has a general marital system for marriages which by default is ”In Community of Property” if there is no contrary contract or arrangement between the spouse’s. This means that if there is no agreement in terms of an Antenuptial contract or any other such arrangement your marriage will be one In Community of Property meaning that will one estate and that both spouses will be joint partners as how it will be administered.

There is the other alternative that will be discussed that is marriages that are Out of Community of Property as there are various forms that one follows depending on the individual’s preferences. They are discussed under the following headings, this is not to say that you may not structure your arrangement differently:-

(i) Out of Community of Property with the inclusion of profit and loss,

(ii) Out of Community of Property with the exclusion of profit and loss; and

(iii) Out of Community of Property with the exclusion of profit and loss with the inclusion of the accrual system.




(i) Out of Community of Property with the inclusion of profit and loss

With this form of marriage the distinction is made between spouses’ pre-marital assets and debts (Pre-marital meaning that their assets and liabilities before their subsequent marriage belong to them and do not affect the other). Before marriage there are two estates, however after the conclusion of a valid marriage all profits and losses fall into one single estate of which the spouses are bound co-owners “in undivided half shares”(meaning that there is one single estate that cannot be separated). The liabilities after the marriage also form part of the joint estate.

(ii) Out of Community of Property with the exclusion of profit and loss

Results in the pre-marital assets and liabilities of a spouse as well as post marital assets and liabilities falling in his/her separate estate and that spouse owns those assets individually and is separately liable for the liabilities (however there is an exception to the rule since spouses married Out of Community of Property are jointly and severally liable for household necessities, these are essential goods that are needed for the day to day running of the household). Spouses married Out of Community of Property may, however also jointly own assets and this joint ownership is known as free co-ownership.

(iii) Out of Community of Property with the exclusion of profit and loss with the inclusion of the accrual system.

When is the Accrual system applicable?

It must be established first as to when the accrual system is applicable. Section 2 of the Matrimonial Property Act 88 of 1984 provides which marriages are subject to accrual system. Three requirements have to be met:-

(i) The marriage must have been concluded after the commencement of the Matrimonial Property Act 88 of 1984. For whites, coloureds and Asians the act came into effect on 1 November 1984 and for blacks 2 December 1988 for the accrual system to be applicable.

(ii) The spouses must have concluded a marriage in term of an Antenuptial Contract whereby community of property and profit and loss are excluded.

(iii) Accrual must not be expressly excluded by the Antenuptial Contract.

Section 3(1) of the Matrimonial Property Act provides that at the dissolution of a marriage(either by death or divorce) the spouse whose estate shows more accrual or smaller accrual than the estate of the other spouses, or his estate if he is deceased, acquires a claim against the other spouse or his estate for an amount equal to half the difference between the accrual of the respective estates of the spouses.

Section 3(2) provides that a claim for the accrual arises at the dissolution of the marriage and that, during the subsistence of the marriage, this right is not transferable or liable to attachment and does not form part of the insolvent spouse’s estate.

During the subsistence of the marriage there are only 2 estates. The husband manages his estate and the wife hers and debt is as a general rule solely recoverable from the spouse who contracted the debt. Accrual will be discussed under the divorce procedure. (In line with Principles of Family Law by L. Van Schalkwyk)

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