Tag Archives: Community of property

CUSTOMARY MARRIAGES AND COMMUNITY OF PROPERTY

a3_bSince the promulgation of the Recognition of Customary Marriages Act, 120 of 1998, the position has changed in that customary marriages are now recognised in our law. A marriage that is valid in terms of customary law and was in existence at the time of commencement of the Act, is for all purposes recognised as a marriage in terms of the Act. In the case of a person being in more than one customary marriage, all valid customary marriages entered into before the commencement of the Act, are for all purposes recognised as valid marriages in terms of the Act.

This also means that customary marriages will fall under community of property. For a customary marriage not to fall under community of property, an antenuptial contract must be in place.

What is a customary marriage?

  • It is a marriage entered into between a man and a woman, negotiated and celebrated according to the prevailing customary law in their community.
  • A customary marriage entered into before 15 November 2000 is recognised as a valid marriage, however, it will be regulated in terms of the specific traditions and customs applicable at the time the marriage was entered into.
  • A customary marriage entered into after 15 November 2000 is recognised as a valid marriage and will receive full legal protection irrespective of whether it is monogamous or polygamous.
  • A monogamous customary marriage will automatically be in community of property, unless it is stipulated otherwise in an ante nuptial contract.

In a polygamous marriage, the husband must apply to the High Court for permission to enter into such a marriage and provide the court with a written contract stating how the property in the marriages will be regulated (to protect the property interests of both the existing and prospective spouses).

Registering Customary Marriages

Customary marriages must be registered within three months of taking place. This can be done at any office of the Department of Home Affairs or through a designated traditional leader in areas where there are no Home Affairs offices.

The following people should present themselves at either a Home Affairs office or a traditional leader in order to register a customary marriage:

  • The two spouses (with copies of their valid identity books and a lobola agreement, if available).
  • At least one witness from the bride’s family.
  • At least one witness from the groom’s family.
  • And/or the representative of each of the families.

In the event that the spouses were minors (or one was a minor) at the time of the customary marriage, the parents should also be present when the request to register the marriage is made.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

DO I NEED AN ANTENUPTIAL CONTRACT BEFORE MARRIAGE?

An antenuptial contract is an important document that, under South African law, determines whether your marriage will exist in community of property or out of community of property, with or without the accrual system.

An antenuptial contract offers a number of benefits:

  1. Preventing your intended marriage from automatically being in community of property
  2. Offering transparency in your relationship by recording the rights, duties and consequences (legal and proprietary) of your marriage
  3. Preventing unnecessary disputes with your spouse down the line

What is marriage in community of property

There is one estate between a husband and a wife. Property and debts acquired prior to or during the marriage are shared equally in undivided shares (50%). Both spouses are jointly liable to creditors.

What is an Antenuptial contract?

A contract entered into to regulate whether a marriage will be out of community of property with/without the accrual system. An antenuptial contract must be signed by the persons entering into a marriage, two witnesses and a notary public, and it must be registered in the Deeds Registries office within the prescribed time period.

The accrual system

In a marriage out of community of property WITHOUT the accrual system, the spouses have their own estates which contain property and debts acquired prior to and during the marriage (“what is mine is mine and what is yours is yours”). Each spouse is separately liable to his/her creditors. Prior to the marriage, an antenuptial contract must be entered into to indicate that the marriage will be out of community of property.

A marriage out of community of property WITH the accrual system is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. The accrual system does not automatically apply and must be included in an antenuptial contract.

Conclusion

After marriage, the terms of the antenuptial contract become irrevocable unless they are amended by an order of the Supreme Court or, in some cases, by a notarial contract which must be registered in a deeds registry.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

DEALING WITH MARRIAGE AND ESTATE PLANNING

A3_bIt is important to understand the legal implications of the marital property regime, especially when drafting a Last Will and Testament and also when entering into a marriage, as the regime chosen by the estate planner is going to affect his/her assets.

The most important forms of marriage are: marriage in community of property, marriage out of community of property (without accrual), and marriage out of community of property (with accrual).

Marriage in community of property

  1. There is no prior contractual arrangement, apart from getting married;
  2. Spouses do not have two distinct estates;
  3. There is a joint estate, with each spouse having a 50% share in each and every asset in the estate (no matter in whose name it is registered);
  4. Applies to assets acquired before the marriage and during the marriage;
  5. Should one spouse incur debts in his own name it will automatically bind his/her spouse, who will also become liable for the debt;
  6. If a sequestration takes place (in the case of insolvency), the joint estate is sequestrated.

Marriage out of community of property without the accrual system

  1. An antenuptial contract (ANC) is drawn up by an attorney (who is registered as a notary), before the marriage;
  2. Where there is no contract, the marriage is automatically in community of property;
  3. The values of each spouse’s estate on going into the marriage are stipulated in the contract;
  4. A marriage by ANC means that all property owned by spouses before the date of the marriage will remain the sole property of each spouse;
  5. Each spouse controls his/her own estate exclusively without interference from the other spouse, although each has a duty to contribute to the household expenses according to his/her means;
  6. To allow for assets acquired by spouses during the marriage to remain the sole property of each spouse, the accrual system must be specifically excluded in the ANC.

Marriage out of community of property with the accrual system

  1. The accrual system automatically applies unless expressly excluded in the antenuptial contract;
  2. The accrual system addresses the question of the growth of each spouse’s estate after the date of marriage.

ESTATE PLANNING

Donations between spouses are exempt from donations tax and estate duty.

Marriage in community of property

  1. In the event of the death of one spouse, the surviving spouse will have a claim for 50% of the value of the combined estate, thus reducing the actual value of the estate by 50%. The estate is divided after all the debts have been settled in a deceased estate (not including burial costs and estate duty, as these are the sole obligations of the deceased and not the joint estate).
  2. When drafting a Last Will and Testament, spouses married in community of property need to be aware that it is only half of any asset that he or she is able to bequeath.
  3. Upon the death of one spouse, all banking accounts are frozen (even if they are in the name of one of the spouses), which could affect liquidity.
  4. Donations or bequests to someone married in community of property can be made to exclude the community of property; in other words, if the donor stipulates that the donation must not fall into the joint estate, then the donee can build up a separate estate. However, returns on such separate assets will go back to the joint estate.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage.

Marriage out of community of property with the accrual system

A donation from one spouse to the other spouse is excluded from the calculation of each spouse’s accrual; in other words, the recipient does not include it in his growth and the donor’s accrual is automatically reduced by the donation amount.

DIVORCE

In the event of divorce, the marriage will be dissolved by court decree, which will address such aspects as child maintenance, access, guardianship and custody, spousal maintenance, the division of assets, division of pension interests and so on.

COHABITATION AND DEFINITION OF “SPOUSE”

Cohabitation is defined as a stable, monogamous relationship where a couple who do not wish to or cannot get married, live together as spouses. The Taxation Laws Amendment Act has extended the definition of “spouses” to include “a same sex or heterosexual union which the Commissioner is satisfied is intended to be permanent”.

Many pieces of legislation, including the Pension Funds Amendment Act and the Taxation Laws Amendment Act, now define spouse to include a partner in a cohabitative relationship, the effects of which are that cohabitees will benefit from the Section 4(q) estate duty deduction in the Estate Duty Act, and the donations tax exemptions of the Income Tax Act.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)