IMPLICATION OF MARRIAGE IN AND OUT OF COMMUNITY OF PROPERTY

Introduction

There are three marital regimes which couples who intend to get married can opt for. These options are marriage in community of property, marriage out of community of property and marriage out of community of property with accrual system. When a couple decides to tie the knot, both parties need to discuss and agree on a suitable marital regime, based on their circumstances. However, most couples do not engage on this kind of discussions and they find themselves married in community of property, by operation of law. This article intends to set out the difference between the different kinds of marital regimes, with the aim to assist couples who intend to conclude nuptials to choose a suitable marital regime to govern their marital relationship.

Different types of marital regimes

Marriage in community of property

The most common type of marital regime is marriage in community of property. This type of marriage is common because when people get married, whether civil or customary marriage in terms of Recognition of Customary Marriages Act 120 of 1998, without signing an antenuptial contract prior to the date of conclusion of their marriage. Such marriage is deemed to be in community of property and community of profit and loss.

The effect of being married in community of property is that the assets and liabilities of the couples are combined into a joint estate in which both couples have equal shares irrespective of their individual contribution. The spouses lose their right to contract independently, every time a spouse needs to enter a contract, the consent of the other spouse will be required (Matrimonial Property Act 88 of 1984).

Marriage out of community of property without accrual system

According to Robinson JA, a couple marries out of community of property when they conclude a valid antenuptial contract prior to the conclusion of their marriage. An antenuptial contract to be valid must be executed in the presence of a Notary Public prior to the conclusion of the marriage and be registered at the deed’s office within two months from the date of its execution. If the antenuptial contract is not registered within the stipulated time, the antenuptial contract will only be valid between the spouses, but as far as creditors are concerned, their marriage will be deemed to be in community of property.

In a marriage out of community of property, there is no merging of the estate of the spouses. Each spouse retains the assets he/she accumulated before and after the conclusion of the marriage, most importantly, each spouse retains full capacity to contract independently in respect of his or her estate.

Marriage out of community of property with accrual system

The third and last marital regime that spouses may choose is the marriage out of community of property with accrual system. The spouses must conclude a valid antenuptial contract which indicates that they are marrying out of community of property subject to the accrual system as set out in the Matrimonial Property Act. The essence of this marital regime is that each spouse retains assets which they acquired prior to the conclusion of their marriage, therefore, assets which each spouse attained prior the conclusion of the marriage and their estimated values must be recorded in the antenuptial contract. Assets accumulated after the conclusion of the marriage will be shared equally between the spouses upon dissolution of the marriage. This marital regime is the best of both worlds in that it gives the spouse the ability to contract independently and protection from creditors of the other spouse just like the out of community of property without accrual system and the benefit of sharing the joint estate which is acquired after the conclusion of their marriage, just like in a marriage in community of property.

Conclusion

It is important for spouses to choose their marital regime before they enter into a marriage. Failure to do so may prove to be costly should the couple intends to change their marital regime. Most couples realise only after the conclusion of their marriage that they chose the wrong marital regime and then seek to amend it to one that will suit their needs. For this to happen, an application has to be made to court for the change, and advertisements have to be placed on a newspaper informing creditors about the couple’s intention to change its marital regime. Once the court grants the application, a postnuptial contract has to be prepared and be executed before a Notary Public, and be registered with the dee’s office within two months.

 

By Chesley Mnisi

Mr Mnisi is a founder and director of Chesley Mnisi Inc. He is a Notary Public with experience in advising on different marital regimes, drafting and registration of both the antenuptial and post nuptial contracst. To book an appointment for consultation, send an email to Chesley@mnisley.co.za