Understanding Marriage out of Community of Property Excluding Accrual | Legal Articles

 

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Understanding Marriage out of Community of Property Excluding Accrual

The Matrimonial Property Act 88 of 1984 provides for the matrimonial property systems under the South African legal framework.

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The Matrimonial Property Act South Africa

According to this Act the systems recognised in South Africa are the Marriage in Community of Property whereby parties’ own assets and liabilities between them in joint, undivided and equal shares; Marriage out of Community of Property and community of profit and loss without the accrual system which is where the spouses are in total separation of their assets and liabilities.

Marriage out of Community of Property whereby community of profit and loss is retained, and the parties retain assets and liabilities accrued prior the marriage, and those which do not fall into the joint estate during the marriage but share gains and losses during the subsistence of the marriage as part of the joint estate.

The Act further introduced the Accrual system on 1 November 1984 where spouses in a marriage relationship only share the profit increases in their separate individual estates during the subsistence of the marriage. This concept of accrual will be the main point of analysis in this brief discussion.

As alluded to above, accrual denotes the growth in the individual and separate estates of the spouses during the marriage. If accrual is applicable, this portion of growth is what either spouse is entitled to upon the dissolution of the marriage.

The Act requires that the spouses specifically exclude the accrual system in their antenuptial contract if they prefer so. Because antenuptial contracts are indeed contracts, the requirements thereof such as capacity, voluntary action and lawfulness amongst others apply.

It follows therefore that the provisions of the antenuptial contract must be lawful, not contrary to public morals and seeking to achieve the nature of marriage.

Marriage Out of Community of Property without Accrual

Marriage out of Community of Property excluding community of profit and loss and accrual system is essentially the form of complete separation of estates, which are assets and liabilities. This also means that each spouse can contract independently and separate of each other, so that the creditors of the other cannot legally lay any claim on the estate of the other spouse.

For the accrual system to be effective and legally binding, there first needs to be a marriage out of community of property and the following are how a marriage out of community of property becomes effective:

  1. By executing a valid antenuptial contract before conclusion of the marriage to exclude community of property;
  2. After conclusion of the marriage an application was made at court to exclude community of property;
  • Parties are black South Africans who married before 2 December 1988 without entering into an antenuptial contract;
  1. The legal system in which the husband was domiciled at the conclusion of the marriage stipulates that the marriage will be out of community of property.

An antenuptial contract that complies with legal requirements and executed before a Notary Public must be concluded expressly providing that the accrual system is excluded. This antenuptial contract is then registered at the Deeds Registries office within 3 months.

The dilemma of marriages out of Community of Property between whites, coloureds and Asians before the introduction of the accrual system have been remedied with the adoption of the redistribution provision in section 7(3) of the Divorce Act whereby a Court is empowered to order distribution of assets upon termination of the marriage by divorce.

The Courts will look at factors such as if the applicant having contributed to the growth of the estate of the other spouse, means and obligations of both spouses and if such an order will be just equitable.

The advantages of this type of matrimonial property system are various and include that either spouse’s insolvency does not affect the estate of the other as there is no community of property. Further, each party retains their individual and separate contractual capacity as well as each party being responsible for their own growth or loss.

Van Deventer & Van Deventer Incorporated – Matrimonial Property Attorneys South Africa

Our approach is comprehensive, professional, and committed in all the matters that we handle. We will diligently assist you with a matter such as this and a host of other legal matters.

Contact us for a one-on-one consultation.

 

 

 

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