Divorce is a grim reality but the blow can be softened if you plan ahead

The harsh reality is that many marriages result in divorce and the hardship associated with that can be minimised if the appropriate marriage regime is selected.

There are two options available in South African law, namely: marriage in community of property or marriage out of community of property. The second option is then further subdivided into either, with the inclusion of the accrual system or without the accrual system.

A brief description of each regime follows:

Marriage in community of property

If you are married in community of property it means that both spouses are the owners of the joint estate, therefore the assets and liabilities of the estate are to be divided equally. All the assets brought into the marriage by the parties as well as any assets or liabilities acquired during the marriage form the joint estate. There are however, a few exceptions to the rule, for instance inheritances and personal damages claims.

Marriage out of community of property – without the accrual

A marriage is automatically in community of property unless an antenuptial contract is entered into. The antenuptial contract governs the manner in which the assets and liabilities and growth thereof during the marriage are to be divided. If the accrual system is excluded then any assets/liabilities acquired by one spouse prior to the marriage and during the subsistence of the marriage only belongs to that spouse. When the marriage is terminated both parties would retain their assets and liabilities in respect of their own separate estate.

Marriage out of community of property – with inclusion of the accrual

The accrual system is automatically applied if an antenuptial contract is entered into, unless that contract expressly excludes the accrual system. If the accrual system is included then any assets/liabilities acquired by one spouse prior to the marriage only belongs to that spouse, however, the assets accumulated during the marriage as well as the increase in those assets’ worth are shared.

Certain assets are excluded from the accrual, specifically inheritance, donations between parties and assets explicitly excluded in the antenuptial contract.

What is accrual?

The accrual can be defined as the amount by which the estate of each party has increased and that is what is then shared between the parties. Upon dissolution of the marriage, the accrual is determined by calculating the difference between the value of one’s estate at the dissolution of the marriage and the value at the commencement of the marriage. The party whose estate is smaller has a claim against the other’s estate for the half of the difference in accrual.

The biggest advantage of this regime is that the parties do not share in each other’s liabilities; therefore any debts that arise during the marriage are only enforceable against the estate of the spouse who incurred the debt, as the other spouse only shares in the accrual upon dissolution of the marriage.

Choosing the right marriage regime is crucial

It is therefore important for spouses to select the marriage regime that works for them and which can control how their assets are to be divided should they divorce, as well as how to protect those assets in the case of sequestration.

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