Being married in community of property in South Africa basically means that all the assets (such as personal property) and debts from before the marriage are shared in a joint estate between both spouses. As a general rule, any assets, debts and liabilities acquired by either spouse after their marriage will then also added to this joint estate.
If the couple do not sign an Antenuptial Contract before their marriage, then by default they will be entering a community of property marriage in terms of South African Law. While a marriage in community is the cheapest and most popular matrimonial regime, it is deeply flawed.
When couples in South Africa are married in community of property, the spouses' estates are combined, and each spouse has the right to dispose of the assets as they wish. They are also equal managers of the joint estate.
While the couple is equally responsible for the management of their joint estate, certain transactions require consent from the other spouse. In these cases, written consent might be required.
All assets that one spouse acquired prior to the marriage, as well as the assets accumulated during marriage, will fall into the joint estate. This means that in terms of estate planning, once the marriage is terminated, all of the assets will be calculated and divided between the two parties.
The only asset that may be excluded from the joint estate is an inheritance.
The liabilities incurred either before or during the marriage forms part of the joint estate. This means that if one spouse enters the marriage with a lot of debt, that debt will form part of the joint estate, and both parties will be liable for the payment thereof.
When a spouse enters into a contract without the consent of the other spouse - when consent is required - the law will favour the third party with whom the contract was made.
If the third party was oblivious to the fact that consent was not given, the contract will be deemed valid. The innocent spouse is, however, protected in these situations, and when the marriage is terminated, that spouse will be compensated accordingly.
The disadvantages to a community of property contract will affect both spouses. For example, if a spouse is financially reckless, then a result will be that the other spouse becomes liable for those debts incurred.
Also various transactions will require both spouses to give consent before being completed.
If each spouse runs their own individual business, then being married in community of property will render their businesses vulnerable to creditors who will make claims against both spouses. Very little can be done in such instances to protect the other spouse from this vulnerability.
The reputation of both partners becomes endangered as a result of liabilities from before and during the marriage that were added to the entire joint estate.
In the end, the only advantage to couples marrying in community of property is that it encourages a relationship of equality for both legal and financial matters.
Hope is not lost for couples in South Africa who married in community of property. Such couples who wish to change their matrimonial contract later on are able to do so.
For legal advice on matrimonial regimes like community of property, or to change your current matrimonial regime, contact our attorneys at Van Deventer and Van Deventer Incorporated today.
Subscribe to our Newsletter
Estate Agent Training
Bond & Transfer Calculator
The law in South Africa provides for couples to choose the type of matrimonial property system they prefer when entering into marriages. For those who prefer to be married out of community of property, it is required that they execute a valid Antenuptial Contract before entering into the marriage.
Read More ...Posted by Cor van Deventer on Monday, November 20, 2023 Views: 310
In South Africa an Antenuptial Contract (ANC) ought to adhere to certain prescribed formalities to be recognised as legally valid. This is very important in many respects, as spouses may later find out after so many years that the Antenuptial contract they thought was valid was, all along, not valid.
Read More ...Posted by Cor van Deventer on Thursday, November 16, 2023 Views: 296