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Property & Divorce - How Will Your Assets Be Divided?

What happens to property in a divorce?

One of the most stress inducing parts of facing divorce is the division of assets in divorce  - such as immovable property.

Real property – any interest in land, real estate, growing (industrial or even horticultural) plants or the improvements of it, and for most South Africans, property in the sense of real estate is the biggest investment they will make.

Immovable assets owned by the marital couple may comprise property acquired before and during the marriage.

In most cases, the spouses and court will automatically apply the matrimonial property regime which is applicable to their marriage in the settlement of the division of assets. 

Being married in Community of Property or Out of Community of Property with or without Accrual will have a huge impact on the settlement achieved by respective spouses during divorce proceedings.

This is one of the reasons we strongly recommend a prenuptial marriage contract, otherwise known as an antenuptial contract, for couples contemplating marriage.

Division of Assets in Divorce & Divorce Settlement Agreements

In some cases, the spouses may enter into a settlement agreement (aka consent paper) which serves the purpose of regulating the proprietary issues following the termination of their marriage. 

The spouses will have full contractual right to either apply the matrimonial property regime applicable to the marriage or to draw up this alternative settlement agreement if it is proven to suit their particular circumstances better. 

i.e. a divorce settlement agreement can override the terms of a couples marital regime. 

The consequences of divorce when married in community of property 

According to the Recognition of Customary Marriages Act, in community of property is the default matrimonial property regime in South Africa. That means, one does not get an antenuptial contract, therefore the assets of both spouses have been combined into one joint estate. 

Upon the dissolution of the marriage (divorce), the assets of the joint estate as at the date of the divorce will be equally divided between the parties, unless a spouse claims forfeiture and the court decides to grant such a forfeiture (a forfeiture order will not be granted automatically. As such one must specifically be requested in the summons).  

In terms of the Act, the court holds the discretion when granting a divorce, on grounds of irretrievable breakdown for a marriage in community of property, to order that the patrimonial benefits of one party be forfeited in favour or the other. 

Gifts which are received during the marriage do not fall within the assets that a party can forfeit, and a spouse cannot forfeit assets that one brought into the joint estate. 

When a couple married in community of property decide to get a divorce, all their assets which are linked in their joint estate will be divided once the court has decided to grant a decree of divorce. 

When spouses do not reach agreement on how to divide the estate (which is not uncommon), the court will have the power to appoint a receiver or liquidator to report on the assets and then divide the assets on its behalf. 

If a situation arises where one spouse acts in a reckless or negligent manner, which threatens to alienate assets of the joint estate pending the divorce, the other spouse is in their right to lodge an application to the court to suspend his/her spouses capacity over the joint estate. 

When such an order is granted by the court, the spouse who applied for the application may then control the estate without the other’s consent.

Marriages out of community of property without accrual

In this system of marriage, the estates of each spouse stays separate, as well as whatever assets and liabilities the individuals had acquired before marriage. Furthermore, this also applies to any assets or liabilities acquired by each spouse during the marriage. 

This matrimonial regime gives each spouse the absolute independence of a contractual capacity and protects each spouse’s estate against claims made by the other spouse’s creditors. 

A marriage is considered out of community of property if it falls within one of the following categories:

  • Parties (spouses) have entered into a valid antenuptial contract (ANC) prior to their marriage that excludes community of property; 
  • The parties have changed their marital regime via the correct channels (via way of a court application); 
  • The parties are black South Africans who have married prior to 2 December 1988 without entering into an ANC; 
  • The legal system of the country in which the husband was domiciled at the time of the marriage dictates that the parties will be married out of community of property.

Before 1 November 1984 

Any marriage out of community of property concluded before 1 November 1984 are based on the principle that each spouse has a separate estate. Prior to 1984, there were only two options of marriage: they either entered into in community of property or out of community of property marriages. The accrual system was only put into operation on November first 1984. 

Marriages out of community of property with accrual

Within this system, many of the rules of a marriage out of community of property without the accrual apply. In that, the estates of the individuals before they are married stay separate. 

The difference is identified during the marriage, as well as at the dissolution of the marriage. Both spouses are entitled to share the growth of each of their estates during the marriage. 

Upon divorce, the accrued amount that is to be divided will be determined by deducting the value of each spouse’s assets reflected in the ANC from the vale of his/her estate. 

For example, if a home is bought whilst married, it can be sold, with the net proceeds split between the spouses, or one spouse may buy the other out. If a property was bought before the couple was married, and if it was not excluded in the ANC, it will remain in possession of the spouse who’s name it was registered in.

Van Deventer & Van Deventer Incorporated - Divorce & Property Attorneys Sandton

Van Deventer & Van Deventer Incorporated can offer all the support and legal advice needed when going through complicated divorce procedures.  Contact us now for expert legal advice concerning the division of assets in divorce.