Tag Archives: Marriage

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)

Planning your estate as newlyweds

For newlyweds, one of the most important tasks to attend to is estate planning. The estate planning will depend on what the couple wants and what form of marriage they are in. It is therefore important to keep the following in mind when planning the years ahead together.

Marriage in community of property

There is a joint estate, with each spouse having a 50 percent share in each and every asset in the estate (no matter in whose name it is registered);

  1. In the event of the death of one spouse, the surviving spouse will have a claim for 50 percent of the value of the combined estate. The estate is divided after all the debts have been settled in a deceased estate.
  1. 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.
  1. 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.

Marriage out of community of property without the accrual system

Each estate planner (spouse) retains possession of assets owned prior to the marriage. Each spouse’s estate is completely separated, even in the event of death. If you want your spouse to inherit something, you would need to outline this in your Will.

Marriage out of community of property with the accrual system

This 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.

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)

Antenuptial contracts: Can I get one after marriage?

Couples who are interested in an antenuptial contract often make the decision to get one before they are married. That is the ideal scenario. However, some couples may have already gotten married in community of property, and later decide to change to another form of marriage contract.

Can it be done?

The Matrimonial Property Act allows a husband and wife to apply jointly to court for leave to change the matrimonial property system which applies to their marriage.

  • According to South African law, the parties who wish to become married out of community of property must enter into an antenuptial contract prior to the marriage ceremony being concluded.
  • If they fail to do so then they are automatically married in community of property. Of course, many people are unaware of this provision and should be able to satisfy the court that it should change their matrimonial property system if it was their express intention that they intended to be married out of community of property.

What are the requirements?

In order for the parties to change their matrimonial property system, the act mentions the following requirements:

  • There must be sound reasons for the proposed change.
  • The Act requires that notice of the parties’ intention to change their matrimonial property regime must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the application will be heard and must be given by certified post to all the known creditors of the spouses.
  • The court must be satisfied that no other person will be prejudiced by the proposed change. The court must be satisfied that the rights of creditors of the parties must be preserved in the proposed contract so the application must contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change and whether or not any particular person will be prejudiced by the change.

What is the downside?

The downside is that the application is expensive because you and your spouse have to apply to the High Court on notice to the Registrar of Deeds and all known creditors, to be granted leave to sign a Notarial Contract having the effect of a postnuptial contract. You must also have solid grounds for wanting to switch to an antenuptial contract. Therefore, it’s not something you can do on a whim.

References:

  • The Matrimonial Property Act 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)

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)