• According to South African law, the parties who wish to become married out of community of property must enter into an antenuptial contract prior to the marriage ceremony being concluded.  
• If they fail to do so then they are automatically married in community of property. Of course, many people are unaware of this provision and should be able to satisfy the court that it should change their matrimonial property system if it was their express intention that they intended to be married out of community of property.

• There must be sound reasons for the proposed change.
• The Act requires that notice of the parties’ intention to change their matrimonial property regime must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the application will be heard and must be given by certified post to all the known creditors of the spouses.
• The court must be satisfied that no other person will be prejudiced by the proposed change. The court must be satisfied that the rights of creditors of the parties must be preserved in the proposed contract so the application must contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change and whether or not any particular person will be prejudiced by the change.

• The Matrimonial Property Act 88 OF 1984

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In the last couple of months I have been quite busy with clients who have not given thought about the legal side of getting married prior to saying “I do”, and I find it rather alarming how people, even in modern times, do not consider the legal reality of tying the proverbial knot.

According to South African law a married couple is deemed to be married in community of property unless they expressly enter into and register an Antenuptial contract prior to getting married.

Here is a simple example of a scenario I was faced with a while back: Mr A and Mrs B are both originally from Timbuktu and have worked and resided in South Africa for the last twenty years. The South African law is entirely foreign and unknown to both of them. About seven years ago the couple rushed off to the Department of Home Affairs to get married. In their minds, that was it! A year ago Mr A bought a house. The Conveyancing attorney then brought it to Mr A’s attention that he and Mrs B are in fact married in community of property. The attorney had to explain exactly what the legal consequences are of being married in community. Mr A and Mrs B are both medical practitioners and in the event of something happening to one of their practices, the financial consequences could be devastating to the other spouse’s practice. It was purely by chance that the couple found out that they are married in community of property and after the impact of a joint estate was explained to the couple, they were worried.  Is this what is meant by the part where you say “for better or for worse”?

There is good news and bad news. The good news is that it is possible in South Africa to apply to Court for the change of your matrimonial property system. The bad news is that this type of application is costly. It is therefore strongly advised that couples consider all the legal aspects of marriage before walking down the aisle. Consult with a legal professional regarding the different options available on how to get married and what the legal implications are of the different matrimonial property systems.

Section 21 of the Matrimonial Property Act, Act 88 of 1984, makes provision for the change of your matrimonial property system. According to the Act a husband and wife may jointly apply to court for leave to change the matrimonial property system which applies to their marriage. The court will only grant an order to this effect if the court is satisfied that there are sound reasons for the proposed change, sufficient notice of the proposed change has been given to all the creditors of the spouses and no other person will be prejudiced by the proposed change. Should the parties be successful with such court application, the court will authorize them to enter into a notarial contract by which their future matrimonial property system will be regulated on such conditions as the court may deem fit.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

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In our last month’s newsletter, we provided some insight into marriages which are classed as “In Community of Property”. In this month’s newsletter, we shall address “Out of Community of Property” marriages and the impact of the “accrual system”.

Should you wish to read last month’s article, you may find it on our website under the “News” tab, titled “Let Schnetler’s help you to tie the knot”.

ANTENUPTIAL CONTRACTS

An Antenuptial Contract is a marriage contract which is entered into between two persons who are intending to be married to one another. In this contract, the terms and conditions which will govern the marriage will be set out, more particularly the matrimonial property system which is to apply to their marriage.

There are two options of such Antenuptial Contract:

1. excluding the accrual system
2. including the accrual system

OUT OF COMMUNITY OF PROPERTY WITH THE ACCRUAL SYSTEM

The accrual system is, in theory, the best of all matrimonial property systems. During the subsistence of the marriage, the spouses have separate estates. The accrual of the estates of each spouse is the amount by which the nett value of the estate at dissolution of the marriage (either by death or divorce) exceeds the nett value of the estate at the commencement of the marriage. Hence, the nett value of the estate at date of marriage is deducted from the nett value of the estate at date of dissolution thereof. If the result is zero, then there has been no accrual.

There are, however, certain items which are not included in the value of the spouses’ estates at date of dissolution of the marriage:

1. Monies received by a spouse by way of damages for non-patrimonial loss e.g. payment received in a civil litigation for defamation of character.

2. Any asset which the spouse has excluded from the accrual in the Antenuptial Contract, as well as any asset which has been acquired by virtue of such excluded asset e.g. property which is sold with a new property being bought with these proceeds.

3. Inheritances, legacies and donations which accrued to the spouse during the marriage, as well as any asset acquired by virtue of such inheritance, legacy or donation.

4. Donations between the spouses.

OUT OF COMMUNITY OF PROPERTY WITHOUT THE ACCRUAL SYSTEM

The exclusion of the accrual system can be explained as follows – each spouse has a separate estate from the other. Thus, at termination of the marriage, each spouse retains their own estates, with there being no division whatsoever.

The main disadvantage of being married without the accrual system, is that no matter how long the marriage has endured, and how much one spouse has contributed to the other spouse’s success, he/she does not have a right to share in that person’s gains.

Should you wish to discuss the Marital Regime options further, or should you wish to have an Antenuptial Contract drafted, kindly contact one of our Notaries who will be pleased to help you reach the best decision for your future marriage.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE).

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One must be careful when drafting and signing an Antenuptial Contract. Aside from ensuring that the contents is all correct, one must also ensure that all the necessary provisions are contained therein to make the contract valid. The consequences of neglecting to do so may result in a marriage in community of property even though the parties had no intention of this at the time of their marriage.

Attorneys are often trusted with the task of drafting an Antenuptial Contract. This is a contract, which one signs to regulate the property regime of a marriage. If a couple does not sign, an Antenuptial Contract then the marital property regime will be that of in community of property. The presence of an Antenuptial Contract means that the marital property regime is that of out of community of property and the parties must specifically stipulate whether they would like the accrual system to apply to their marriage or not.

The importance of ensuring that all the necessary provisions are contained in the Antenuptial Contract to result in a valid contract was discussed in the 2014 Supreme Court of Appeal Case of B v B[1]. In this case, no values were stated in respect of any of the assets listed in the Antenuptial Contract and they were also not properly identified. In B v B the court stated that if the terms of a contract are so vague and incoherent as to be incapable of a sensible construction then the contract must be regarded as void for vagueness.[2]

According to Section 6(1) of the Matrimonial Property Act[3] ,a party to an intended marriage which does not, for the purpose of proof of the value of his or her estate at the time of the commencement of the marriage, declare the value in the contract, then he or she may do so within six months of the marriage in a statement attested to by a notary. If this is not done, according to Section 6(4) of the Marital Property Act, the net value of the estate of a spouse is then deemed to be nil at the time of the marriage. In effect, such a contract is valid but it will effectively render the marriage in community of property since nothing was excluded from the accrual.

However, if a contract is contradictory and incoherent in other respects then it cannot be seen as a valid contract since there is no certainty as to the meaning of the contract and what the parties seek to achieve. This means that the contract would not embody terms that would enable to court to give effect to the intention of the parties at the time the contract was concluded.

The result of such a contract is that the Antenuptial Contract would be void for vagueness and that the marital property regime would be the default position according to the Marital Property Act, which is in community of property.

Therefore, parties are encouraged to read their contracts thoroughly and ensure that they understand the terms thereof and that the contract embodies their intentions without any further explanations or evidence.

[1] (952/12) [2014] ZASCA 14 (24 March 2014).

[2] B v B (952/12) [2014] ZASCA 14 (24 March 2014) par 7.

[3] 88 of 1984.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice.

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