Matrimonial dispensations in South Africa
There are three types of matrimonial property dispensations in South Africa. Marriage in community of property, marriage out of community of property to which the accrual system applies and marriage out of community of property.
It is essential to understand the differences before you get married.
Marriage in community of property means that the spouses become co-owners of all assets and liabilities (such as debt obligations). The same principle applies to assets and liabilities acquired during the marriage. For example, if one of the parties incurs a legal liability claim of R30 million, the creditor can sell both parties’ assets in order to settle the debt. If one spouse is sequestrated, the other spouse will also be sequestrated, as there is only one estate. Commercial transactions, such as the purchase of a motor vehicle cannot take place until the other spouse has given consent. The same principle applies to the disposal (sale) of an asset.
Donations between spouses are not possible.
If spouses are married out of community of property with accrual, there are practically three estates: each spouse’s estate before the conclusion of the marriage, provided that the assets acquired by the spouse are indicated as separate assets prior to the conclusion of an Ante Nuptial Contract (ANC). After marriage, a “third” estate is established. During the existence of the marriage, the operation of the matrimonial property dispensation is out of community of property. Each spouse remains in control of his / her assets and a creditor cannot seize and sell the other spouse’s asset for debt. Upon divorce or death of one spouse (dissolution of the marriage), the spouses’ separate estates are compared with each other and if one spouse’s estate shows a greater growth than the other spouse’s estate, the growth is divided equally between the spouses. If one spouse is sequestrated, the other spouse will not be sequestrated. Donations between spouses are possible.
An Ante Nuptial Contract signed in front of a notary by both spouses prior to the marriage is required.
Out of community of property means that each party retains his / her assets before and at the time of marriage as his / her sole property. Spouses therefore remain in control of his / her own assets and creditor(s) throughout and creditors of one spouse cannot seize and sell the other spouse’s assets. Donations between spouses are possible. Permission to purchase and sell assets is not required.
An Ante Nuptial Contract is required before the marriage is concluded.