Tag Archives: Community of property

Wedding bells?

Every girl dreams of a fairy tale wedding.  The perfect husband, dress, venue and let us not forget, the ever popular “happily ever after.”  Unfortunately, the rising divorce rate provides a clear indication that married couples are far more likely to opt for divorce before reaching the “… until death do us part” bit of their marriage vows. Every year an inordinate amount of money is spent towards creating the perfect ceremony and reception. Ironically, almost no consideration is given to the consequences of the marriage.

Marriage is not a social event.  It is a legal action taken by individuals that affects, inter alia: (1) their personal status, (2) their contractual capacity, (3) their estates, (4) creates legal obligations between the spouses and (5) governs their external legal relationship with third parties.

The default marital dispensation is Married In Community of Property.  The estates (existing and future) of the spouses are joined into one estate.  Each spouse acquires an undivided half share in the now joint assets and the spouses are jointly responsible for all debts (existing and future), even if the debts are incurred by only one of the spouses.  The contractual capacity of the spouses are limited and insolvency or death of one of the spouses affects both the legal status and capacity of the other spouse as well as the joint estate.

Should the parties wish to change the default position, they may enter into an antenuptial contract and provide for a marriage dispensation being either: (1) Out of Community of Property without the Accrual System or (2) Out of Community of Property with inclusion of the Accrual System.

Out of Community of Property without the Accrual System is the polar opposite of a marriage in community of property. The estates (existing and future) of the spouses remain separate and the contractual capacity of the spouses remain unaffected.  Insolvency of one spouse does not affect the status, capacity or estate of the other spouse.  However, this dispensation creates the potential for severe disparity to develop in the estates of the spouses that may give rise to social injustice and financial hardship.  Also, the surviving spouse does not automatically share in the estate of a deceased spouse, unless specifically provided for in a valid will.

The inclusion of the Accrual System to the Out of Community of Property dispensation is an attempt to address the social injustice and hardship by combining elements of both dispensations.  The same considerations as set out for a marriage Out of Community of Property without the Accrual System will apply, right up to the dissolution of the marriage by either death or divorce.  On dissolution of the marriage, the accrual system activates and provides that the estate of the spouse with the least accrual is entitled to half of the value of the difference in the accrual of the respective estates.  In theory, this should create parity and place both estates on an equal financial footing.

A word of caution: For the antenuptial contract to apply, the contract must be: (1) executed in writing, (2) before a Notary Public, (3) before date of marriage and (4) registered with the Registrar of Deeds within three months of the date of execution.

For any of your antenuptial contract needs do not hesitate to contact Delport van den Berg Inc. on (012) 361 5001 as we have no less than 3 notaries to assist you.

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)

Validity of Antenuptial Contracts

A2_BOne must be careful when drafting and signing an Antenuptial Contract. Aside from ensuring that the contents is all correct, one must also ensure that all the necessary provisions are contained therein to make the contract valid. The consequences of neglecting to do so may result in a marriage in community of property even though the parties had no intention of this at the time of their marriage.

Attorneys are often trusted with the task of drafting an Antenuptial Contract. This is a contract, which one signs to regulate the property regime of a marriage. If a couple does not sign, an Antenuptial Contract then the marital property regime will be that of in community of property. The presence of an Antenuptial Contract means that the marital property regime is that of out of community of property and the parties must specifically stipulate whether they would like the accrual system to apply to their marriage or not.

The importance of ensuring that all the necessary provisions are contained in the Antenuptial Contract to result in a valid contract was discussed in the 2014 Supreme Court of Appeal Case of B v B[1]. In this case, no values were stated in respect of any of the assets listed in the Antenuptial Contract and they were also not properly identified. In B v B the court stated that if the terms of a contract are so vague and incoherent as to be incapable of a sensible construction then the contract must be regarded as void for vagueness.[2]

According to Section 6(1) of the Matrimonial Property Act[3] ,a party to an intended marriage which does not, for the purpose of proof of the value of his or her estate at the time of the commencement of the marriage, declare the value in the contract, then he or she may do so within six months of the marriage in a statement attested to by a notary. If this is not done, according to Section 6(4) of the Marital Property Act, the net value of the estate of a spouse is then deemed to be nil at the time of the marriage. In effect, such a contract is valid but it will effectively render the marriage in community of property since nothing was excluded from the accrual.

However, if a contract is contradictory and incoherent in other respects then it cannot be seen as a valid contract since there is no certainty as to the meaning of the contract and what the parties seek to achieve. This means that the contract would not embody terms that would enable to court to give effect to the intention of the parties at the time the contract was concluded.

The result of such a contract is that the Antenuptial Contract would be void for vagueness and that the marital property regime would be the default position according to the Marital Property Act, which is in community of property.

Therefore, parties are encouraged to read their contracts thoroughly and ensure that they understand the terms thereof and that the contract embodies their intentions without any further explanations or evidence.

[1] (952/12) [2014] ZASCA 14 (24 March 2014).

[2] B v B (952/12) [2014] ZASCA 14 (24 March 2014) par 7.

[3] 88 of 1984.

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)