THE 3 MATRIMONIAL PROPERTY SYSTEMS; MARRIAGE IN COMMUNITY OF PROPERTY, MARRIAGE OUT OF COMMUNITY OF PROPERTY, AND ACCRUAL SYSTEM: SIMPLICITY
Lazarus Khosa
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??????????????????????????Author: Lazarus Khosa LLB student, University of South Africa
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THE 3 MATRIMONIAL PROPERTY SYSTEMS; MARRIAGE IN COMMUNITY OF PROPERTY, MARRIAGE OUT OF COMMUNITY OF PROPERTY, AND ACCRUAL SYSTEM: SIMPLICITY
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ABSTRACT
Matrimonial property system is a well spoken subject yet not easily comprehensive to many ordinary people who are not familiar with the law. Reading on the matrimonial property system would normally be because you want to educate yourself; you consider getting married soon or just for the interest sake on the subject. ?This article explains the 3 matrimonial property systems: Marriage in Community of property, Marriage out of community of property, and Accrual system in simple terms and practical examples that even one without legal background can understand. It is also important to not that the information provided in the article on its own cannot however replace expect legal advice, but will place the reader on a position to more informed decisions and to know when it is time to consult an attorney.
Key words: Property, marriage, divorce
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I.????????????????INTRODUCTION:
Marriage?is?traditionally?defined?as?the?legally?recognised?life?long?voluntary?union?between?one?partner?and?one?other partner to?the?exclusion?of?all?other?persons.?It is not a contract. Is governed by the rules under Matrimonial property law which determine patrimonial consequences of marriages (consequences regarding assets and liabilities), etc. Thus, Parties?can?determine?their?patrimonial?consequences?by?selecting?the specific?matrimonial?property?system available to them which are: Marriage in Community of property, marriage out of community of property without the application of Accrual system and Marriage out of community of property with the Accrual system.
?II.???????????????
The matrimonial property system will apply when initiating a marriage, which can be one of the biggest steps a couple, might have to take in their lives. It can all be very exciting and entails a magnitude of planning and administration. Hence, is very important for a couple to give due regard to the Matrimonial systems to choose from. For there to be a valid marriage, certain requirements should have been complied with, firstly, there should be a:
?1. Capacity to act - parties must have capacity to act (minor needs permission or mentally ill are incapable).
2. Consensus - Parties must agree (must be consensus) about the marriage.
3. Must be lawful - all legal requirements must be complied with (parties are unmarried and able to marry).
4. All prescribed formalities must have been complied with.
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Below is a brief explanation of the 3 different matrimonial property systems:
1. Marriage in Community of property
Marriage in community of property is the default property system in South Africa. This marital system will automatically apply if one does not sign an ante-nuptial contract (ANC) before the marriage. In this marriage system, each party owns 50 per cent of every piece of property. For an example: Should a couple own 10 chairs, each now owns 50 per cent of each chair, as opposed to 5 chairs each (undivided share.) (The only exception to this will be an inheritance or gift that is explicitly excluded from Community of property by the testator or donor.)
Practical explanation of marriage in community of property:
Ms. Mkhawana (house wife) Married Mr. Khosa (business man). Her furniture is worth R5 000 and her car R35 000.00. Mr. Khosa has businesses worth R700 000 and a car worth R450 000. After the marriage the joint estate will be worth R1 190 000. Both M.s Mkhawana and Mr Khosa will each be the owner of assets worth R595 000. In principle both parties have equal control over the management of the joint estate, however, for the purposes of conflict that can occur, the law prescribes that the consent of both spouse is required to perform certain legal acts. Formal or written consent of the other spouse is required to:
1. Buy, sell, rent lease or mortgage any fixed property;
2. Sell, cede or pledge any shares, stock insurance policies, mortgage bonds or fixed deposits;
3. Sell or pledge objects held as investments;
4. Withdraw money from a spouse's bank account;
5. Enter into a credit agreement, and/ or
6. Bind oneself as surety for someone else's debt. Informal consent of the other spouse is required to:
1. Sell or donate other (than the ones listed above) Assets of their estate;
2. Sell pawn or pledge any furniture or effects of the common household; and/or
3. Receive money owing to a partner in terms of:
- Salary, earnings, pension or gratuity;
- Damages owning because of loss of income;
- Income from a separate property; and/or
- Proceeds from an insurance policy held in his or her name.
On termination of the marriage, the joint estate will be divided equally regardless of who worked the hardest, earned the most money or brought the most assets. A divorce court may however grant an order for one party to forfeit his or her part of the joint estate after it has considered:
- The duration of the marriage;
- The circumstances that let to the breakdown, and
- The benefit unduly should a forfeiture order not be granted.
When one spouse dies, the joint estate will be administered and the surviving spouse is entitled to his or her half after the administration process is completed. Although there are ways to provide for the surviving spouse during this period, one must consider that he or she might not be able to use their joint bank account.
Pros - marrying on community of property is a wonderful protection for the wife who raises children, makes a home for the family and generally enables her husband to pursue his career.
- 50/50% share of whole property Con - however, if the husband's estate is sequestrated, the creditors may be also attaching the wife's share of everything. - Therefore, community of property is not a good choice if either spouse intends going into business or any kind of career that is financially risky.
2. Marriage out of community of property without the application of accrual system
When each party wants to remain a sole owner of their property after the marriage, they should conclude an Ante nuptial Agreement (ANC). In this instance, the parties will retain their separate estate after marriage. The parties will also be entitled to perform any legal any legal actions relating to their estates as they deem fit without having to obtain the consent of the other party. Furthermore, the parties will have to choose whether or not they want to make the accrual system part of their Matrimonial Property Regime. If they agree that the accrual system will not be applicable, it will be excluded from their marriage. When the marriage is dissolved there will be no division of any joint estate and there will also be no accrual to be calculated with neither party being entitled to an accrual claim. When the parties conclude an ANC, the accrual system automatically applies, unless it is expressly excluded. The following provisions and included in an ANC:
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- Exclusion of the community of profit and loss, accrual and gifts.
- A testamentary clause, should the parties want to provide that certain property will be inherited by either of them in the other one's death;
- A gift or donation from one party to the other;
- The creating of the trust in favour if one of the parties or any children to be born from their intended marriage; and/or
- Additional aspects that you agreed upon.
You cannot include illegal, immoral or impossible provisions in an ANC.
The parties cannot for an example, agree that:
- One party will convert to the religion of the other;
- They will not live together as husband and wife; and/or
- One party will be allowed to be unfaithful in the marriage.
Below is a practical example of an Ante nuptial Contract (ANC)
Mr Khosa and Miss Mkhawana got married, neither of them had any possessions. Mr Khosa opened a gym business and a law firm that were very successful while Ms. Mkhawana stayed at home and raided their 2 children. Some 20 years later, Mr Khosa's estate was worth R1 190 000.00, but Ms. Mkhawana still had nothing. Mr Khosa went through a midlife crisis and left his family to marry Nkiyasi, a 23-year-old athlete. Because they excluded community of property and the Accrual system from their marriage, M.s Khawana has no claim, even if she contributed Mr. Khosa's wealth and it was his sole wrongdoing that ended the marriage. The marriage out of community of property is recommended in insurances where each person has their own income and property. Is ideally suited for second or third marriages where children from previous marriages are involved.
?3. Marriage out of community of property with the application of accrual system
This system was created to strike a balance of fairness (as in the above case of Mr. Khosa and M.s Mkhawana). It prevents one party form claiming all the accrued wealth when both partners contributed to the accrual it each other's estate. Both spouses will still be the sole owner of their own property, as the marriage is essentially still out of community of property. Therefore, a creditor of one spouse cannot attach the property of the other spouse. This reason alone makes the system ideal if ether spouse is involved in a business. However, should the marriage be dissolved by death or divorce, the accrual of both parties' estates has to be calculated (the extent of which both of them is became richer). At the end of the marriage, the accrual of both the husband and wife is added together, and each spouse is entitled to half of the total.
The calculation of the accrual of the respective estates basically works as follows:
Certain assets are excluded from the accrual calculation (meaning they are not taken into consideration at either the commencement of the marriage or the dissolution thereof). Examples of these assets are:
·???????inheritances, legacies and donations as well as any asset that was obtained due to the possession or prior possession thereof;
·???????assets which are specifically excluded by the Ante nuptial Agreement itself, as well as any asset that was obtained due to the possession or prior possession thereof;
·???????damages received, other than damages for patrimonial loss; and
·???????Donations between spouses, excluding donations which are made in expectation of death.
?Practical example of marriage out of community of property without the application of Accrual system
Nkiyasi (multimillionaire) married Lazarus.
He had no possession when they married. She had furniture worth R100 000, an Electrical company worth R800 000, an investment worth R500 000 and a car worth R350 000 (a total value worth R1 750 000).?They got divorced 10 years later. By that time, Lazarus' estate was worth R500 000.00 and Nkiyasi's R3.3 million. At the end of the marriage Lazarus was R500 00 richer and Nkiyasi was R1 550 000 richer. The total accrual during the marriage was R2?050 000. Because Lazarus is entitled to half of the total accrual, he will have a claim of R625 00 against Nkiyasi which will be added to his own accrual of R500 000 will be R1 125 000, thus half of the total accrual of R 2 050?000.
Signing and Registration of ante nuptial Contracts
An ante nuptial Agreement must be signed in front of an admitted and practicing Notary Public who will also attest to the agreement. The contract must also be signed in the presence of two competent witnesses. The Notary Public will affix his or her office stamp to the contract. After a couple has signed their ante nuptial Agreement, the document must be registered in the Deeds Office within three months after it was signed.
Changing your Matrimonial Property system
In terms of section 21 of the Matrimonial Property Act, Act 88 of 1984, and spouse may apply to the High Court in order to change their Matrimonial Property Regime according to their wishes. The Court would have to be convinced that there exist good reasons for the proposed change, that sufficient notice has been given to all the relevant creditors and that no person will be prejudiced by the proposed change. It is important to note that a Court Application as described above will entail material legal costs.
Amendments to your ante nuptial Contract
The ante nuptial Agreement between spouses gains legal power only after the marriage comes into existence. Should a couple wish to amend or cancel their ante nuptial contract before they get married, same can be done by way of an amendment agreement or notarial cancellation agreement which must also be registered in the Deeds Office. After the marriage has taken place, the contract cannot be amended by way of agreement between the parties and a Court will have to be approached for an order to amend the contract. In this instance the amendment may not change the Matrimonial Property Regime created by the contract, as this would have to be done in terms of section 21 of the Matrimonial Property Act, as set out above. Mistakes in the contract can be rectified by way of an application to the Registrar of Deeds in terms of section 4(1)(b) of the Deeds Registries Act, Act 47 of 1937. These mistakes include spelling errors, typing errors and/or incorrect information being reflected on the contract, without same having a material bearing on the intention of the parties. The correction of the error may not have the effect of conveying any rights.
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III BIBLOGRAPHY
BOOKS
Anderson Am & Dodd A & Roos Ac Everyone’s guide to South African Law 2nd edition (2006) 115.
Jacqueline Heaton & Hanneretha Kruger South African Family Law 4th Edition (2015)
South African legislation
Matrimonial property Act 88 of 1984
CONSTITUTION
Constitution of the Republic of South Africa 1996
Civil union Act 17 of 2006
Insolvency property Act 24 of 1936
INTERNET
https://www.saflii.org/za/journals/PER/2007/12.html ?Accessed on 26 January 2022
https://honeyattorneys.co.za/matrimonial-property-regimes ?Accessed on 26 January 2022
Attended University of the Witwatersrand
2 年Very insightful article