The Matrimonial Property Act 88 of 1984 (the Act) governs matrimonial property regimes in South Africa. Prior to this Act, marriage in community of property with marital power and marriage out of community of property without profit and loss (and husband’s marital power) were the most common marital property systems in practice. The Act subsequently abolished the marital power model and further introduced the accrual matrimonial property system.
South African law assumes that civil marriages are in community of property, unless the contrary is proven. The conclusion of a marriage has far reaching implications with, amongst other things, regards to the respective estates of the individual spouses. It is imperative that one seeks expert legal advice before entering into a marriage so as to understand and therefore make informed choices with regards to which matrimonial property system best suits their circumstances.
In terms of the aforementioned Act, the following are the recognised matrimonial property regimes prevailing in South Africa;
1. Marriage in Community of Property
In the most apt of terms, community of property presupposes and indeed refers to spouses becoming jointly tied as co-owners in undivided and indivisible assets and liabilities accrued before, at the time of, and during the subsistence of the marriage. The Courts confirmed and applied this view in the cases of Mazibuko vs National Director of Public Prosecutions 2009 (6) SA 479 (SCA) and De Wet vs Jurgens 1970 (3) SA 38 (A).
The transfer from individual to joint ownership of assets happens automatically by operation of law as soon as the marriage is validly concluded. Actual delivery of the assets is not indispensable. There are however assets that do not form part of the joint estate e.g assets excluded in a will by a third party, engagement gifts, assets subject to a usufruct, non-patrimonial damages as per Section 18 (a) of the Act and the decision in Van den Berg vs Van den Berg 2003 (6) SA 229 (T).
2. Marriage out of Community of Property
An Antenuptial Contract is executed to deviate from the common law and statutory matrimonial property consequences. With this mechanism spouses can exclude certain assets from their joint-estate, as well as the other’s liability from debts of the other. Other important provisions to include therein are to do with succession, the preferred matrimonial property system and marriage settlements (donations). The validity requirements of antenuptial contracts include inter alia that it must be executed before a notary and registered with the Deeds Office as per Sec 87 of the Deeds Registries Act 47 of 1937. Regardless, a verbal or an informal antenuptial contract that does not comply with the requirements is still applicable between the spouses, this was held in Lagesse v Lagesse 1992 (1) SA 173 (D).
Marriage out of community of property can take either, marriage out of property and community of profit and loss without the accrual system. Put in simpler terms, this is whereby spouses agree on total separation of assets and liabilities (property). The Act provides that this regime automatically is applicable to the accrual system, unless specifically excluded in an antenuptial contract.
Alternatively, marriage out of community of property can be with the withholding of community of profit and loss. Spouses keep their assets and debts prior the marriage, and assets which do not form part of the joint estate during the marriage. However, all gains and losses during the marriage become part of the joint estate.
3. The Accrual System
This is whereby spouses married out of community of property and community of profit and loss, share proceeds of respective increases their separate estates have shown. As advised above, Section 2 of the Act provides that all marriages concluded out of community of property and community of profit and loss after the commencement of the Act, automatically include the accrual system. For the accrual system not to apply to this matrimonial property regime it must specifically be excluded in an antenuptial contract, which was the view of the Court upon appeal of the case Odendaal v Odendaal 2002 (1) SA 763 (W).
Despite the aforementioned, spouses can alter their matrimonial property system after the conclusion of the marriage. Section 21(1) of the Matrimonial Property Act 88 of 1984 provides for application to court for spouses to achieve such alteration. This process is an expensive one and spouses are advised to do all they can to get legal advice before the conclusion of the marriage.
As set out in the case of Lourens et Uxor 1986(2) SA 291 (C), the Court looks at whether there are sound reasons for the proposed alteration, sufficient notice to the creditors of the spouses about the proposed change, and the Court must be satisfied that no other person will be prejudiced by the proposed change.
The conclusion of a marriage has far reaching implications with, amongst other things, regards to the respective estates of the individual spouses. It is crucial to seek expert legal advice before entering into a marriage so as to understand and make clued-up decisions with regards to which matrimonial property system best suits the prevailing circumstances.