Getting married is a special time in every persons’ life. Marriage is an important step and one has to realize that you are entering into a contract with your intended spouse to not only share your life with him/her, but also your estate (assets/liabilities).
The degree in which your estate is binded, will depend on your decision regarding a pre-nuptual contract (ANC).
If no pre-nuptual contract is concluded, you will be married in community of property. This means that all of your assets and liabilities (even those acquired before the marriage) are merged into a joint estate, in which each spouse has an undivided half-share.
Being married in community of property has certain disadvantages, such as:
When you are the economically stronger spouse, you have to share your assets with your spouse.
You are jointly liable for each other’s debts. This is particularly problematic on insolvency.
The joint administration of the estate is rather complicated.
It is important to obtain proper advice when deciding on a marriage regime, in order to understand the differences and make an informed decision. When entering into a pre-nuptual agreement, you will have to decide between being married out of community of profit and loss with inclusion of the accrual system, or being married out of community of profit and loss with exclusion of the accrual system.
The accrual system explained: The accrual system can be thought of as a deferred community of gains (HR Hahlo The South African Law of Husband and Wife 5ed (Cape Town: Juta 1985) at 304). ‘During the subsistence of the marriage, it is out of community of property and community of profit and loss. Each spouse retains and controls his or her estate, but on dissolution of the marriage the spouses share equally in the accrual or growth their estates have shown during the subsistence of the marriage’ (J Heaton South African Family Law 3ed (Durban: LexisNexis 2010) at 94). The practical implication of the accrual system is outlined in s 3(1) of the Act, which provides that ‘[a]t the dissolution of a marriage subject to the accrual system, by divorce or by the death of one or both of the spouses, the spouse whose estate shows no accrual or a smaller accrual than the estate of the other spouse, or his estate if he is deceased, acquires a claim against the other spouse or his estate for an amount equal to half of the difference’.
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