Love Is Blind…Marriage Is Not
We love asking newly engaged couples how much attention they have given to their future marriage contract. “It always seems to shock them because they are so in love and much more focused on the dress, flowers and music. That’s usually when we tell them that while love might be blind, marriage is an eye opener.” Deciding what marriage regime will govern your marriage is one of the most important decisions a couple will make. The three forms of matrimonial property systems available since the commencement of the Matrimonial Property Act 88 of 1984 are described simply below:
In Community of Property
This is a 50/50 marriage. The individual estates (assets immovable and movable, incorporeal and corporeal) are joined and each party has the right to dispose the assets of the joint estate. Although consent is required from the other party to alienate or encumber estate assets, written consent is only required in certain circumstances. No consent is required for transactions performed by a spouse in the ordinary course of his / her profession, trade or business. Simply put, it is the merging of two estates into one.
Out of Community of Property Excluding the Accrual System
What’s yours is yours and what’s mine is mine. This is where Community of property and profit and loss are excluded. The Antenuptial contract must expressly exclude the accrual system. In this system each party has the full right of disposal over his / her assets as they wish. Simply put, the two estates remain completely separate.
Out of Community of Property with the Accrual System
The assets which the parties had prior to their marriage can either be included or excluded. Each party must declare a commencement value of their respective estates in the Antenuptial contract and this amount is adjusted by the Consumer Price Index (CPI) at dissolution of the marriage. The lesser accrued estate is subtracted from the higher accrued estate and the difference is divided. The divided amount is the accrual claim which a spouse (the lesser accrued estate) will have against the other spouse. Certain assets are not taken into account in determining the respective accruals. Every marriage has different circumstances and thus which regime parties should use to govern their marriage depends on their individual circumstance, such as the values of their respective estates, incomes and certain cases of second or further marriages.