Differentiation between the various matrimonial property regimes in South Africa

Posted 4th September 2023

Many couples often leave the question of what marital regime would best suit their needs to the last minute when they decide to get married. Often not much thought is given to this important aspect of the intended spouses’ married life. The purpose of this article is to encourage intended spouses to give priority to this aspect of their soon to be married life as it will have far reaching effects for both parties, not only in the event of divorce, but also from an estate planning perspective.

There are three different matrimonial property systems applicable in South Africa:

Marriage in community of property (the “default” system)

In South Africa, if you and your spouse do not enter into an Antenuptial Contract your marriage will automatically be deemed “in community of property and of profit and loss”. The assets and liabilities of both parties will fall into one combined joint estate. You will not have separate estates – everything that you and your spouse owned in respect of assets or owed to creditors will fall into “one communal pot”. Upon divorce or the death of one or both of the parties, each party is entitled to their half share of the joint estate.

Parties married in community of property are also restricted from performing juristic actions in relation to the joint estate without obtaining the consent of their counterpart. For example, a spouse cannot, without the consent of the other spouse alienate, mortgage, burden with a servitude or confer any other real right in any immovable property which forms part of the joint estate, or enter into a credit agreement as a consumer to which the National Credit Act is applicable.

Marriage out of community of property excluding the application of the accrual system

The parties can conclude an Antenuptial Contract to avoid entering into the default matrimonial property system. The Antenuptial Contract must be entered into prior to the marriage taking place in order to be valid and must be registered in the deeds office within three months of its signature. The Antenuptial Contract effectively sets out what the parties intend the financial consequences to be upon the dissolution of the marriage or in the event of death of either spouse and is tailored according to the parties’ preference.

Unless expressly excluded in the Antenuptial Contract, a marriage out of community of property will automatically be subject to the accrual system.

Out of community of property in effects means that the parties’ estates will not be joined, but rather the parties retain their separate estates upon dissolution of the marriage (this includes all assets and liabilities obtained prior to and during the existence of the marriage). By expressly excluding the accrual, the parties retain their position vis a vis their respective assets and liabilities as if they were not married.

Marriage out of community of property with the application of the accrual system

This the default antenuptial contract which will regulate your respective property rights unless you expressly exclude the accrual system.

The accrual system effectively means that you retain separate estates during the course of the marriage but on the dissolution of the e marriage, whether by divorce or by the death of one party, the spouse’s estate which has shown a lesser growth (“accrual“) in their estate since the beginning of the marriage will have a claim against the estate of the other spouse’s estate which has shown a larger accrual, to the extent of 50 % of the difference in the spouses’ respective estates.

The calculation of the accrual may become quite complicated and you may need the assistance of an experienced family law practitioner to assist you with this calculation. However, the basic formula is a follows:

The parties declare in their antenuptial contract their respective net values at the time of concluding their marriage. If they omit to do so both parties respective net values at the time of marriage are deemed to be nil – this figure is called the “Commencement Value”.
The present value of the parties’ respective estates is determined at the end of the marriage i.e., as at the date of divorce or death – this is called the “End Value”.
At the dissolution of the marriage, the Commencement Value of the parties’ respective estates will need to be adjusted to account for inflation. This is performed by using the consumer price index. This figure is called the “Adjusted Commencement Value”.
The Adjusted Commencement Value of each of the parties’ estate is thereafter subtracted from the End Value. This amount will reflect the accrual in each of the estates.
Once the abovementioned calculation is performed, the party with the smaller accrual will have a claim against the estate of the spouse with the larger accrual. The accrual claim is restricted to half of the difference between the larger accrual and the smaller accrual.

The following assets are excluded from the accrual calculation:

donations between the spouses;
assets specifically exclude in the Antenuptial Contract;
inheritances, legacies and donations as well as any asset that was obtained by virtue of possession or former possession thereof;

It is recommended that the parties who intend to marry consult with an experienced family law practitioner and/or notary to decide upon the most appropriate regime to regulate their marriage.

In the event of divorce, it is also recommended that the spouses seek legal guidance as to the financial consequences of their respective proprietary regimes.

The type of matrimonial regime chosen by the intended spouses will have significant implications for the parties’ respective estate planning. Therefore, care and thought should be given to this area of the marriage preparation and should be considered not less than 6 to 8 weeks prior to the marriage ceremony.

MSA has a team of competent professionals who are able to assist you with deciding on the best marital regime for you and your spouse and guiding you as to the appropriate terms and provisions for the antenuptial contract should you and your spouse elect to marry out of community of property and profit and loss.