What is an out of community of property marriage?
“Out of community of Property” commonly refers to a South African Matrimonial Property System where the estates of two individuals remain separate entities after these individuals enter into a marriage.
Prospective spouses have an option to choose between two different variants of this system namely either “Out of Comunity of property with the inclusion of the Accrual System” or “Out of Community of Property with the exclusion of the Accrual System”
Both these systems require the conclusion and registration of an antenuptial agreement which is also sometimes referred to as a prenuptial agreement or A.N.C.
During the existence of the marriage, the same principles will apply to this Matrimonial Property System as that applicable to a Marriage out of community of Property (with the exclusion of the accrual system). Both spouses will retain full control and ownership over their respective estates and creditors of one spouse will not be entitled to attach and sell the assets of the other spouse in collecting debts owing by such spouse.
What happens when the marriage ends?
At the dissolution of the marriage, whether by divorce or death, the parties will however have claims against each other for any benefit that accrued to their respective estates since entering into the marriage.
The general principle of this Marital Property System is that spouses will retain the assets they brought into the marriage, but will share equally in any accrual after the date of marriage. It is important to note that spouses will not have any claim against the other during the marriage.
Spouses will also be able to bequeath their assets to any person in terms of a valid last will and testament.
To illustrate by way of example. Betty’s net estate is valued at R100,000 at the time of entering into her marriage with Clive. At the time of divorce, her estate is valued at R200,000 and has subsequently increased in value to R100,000. Clive’s estate, on the other hand, was valued at R200,000 at the time of their marriage and R400,000 at the time of divorce. Clive’s estate has subsequently increased in value by R200,000. The total accrual amounts to R300,000 being the R100,000 from Betty’s estate plus the R200,000 from Clive’s estate. Each spouse will subsequently be entitled to retain their initial contribution plus half of the accrual being R150,000. As Betty is already in possession of R100,000 of this accrual, Clive’s estate will owe R50,000 to Betty’s estate.
What is included or excluded?
Spouses should note that their interest in any pension fund or provident fund will be included in the calculation of any accrual.
An inheritance, a legacy or a donation which accrues to a spouse during the subsistence of his or her marriage, as well as any other asset which he or she acquired by virtue of his/her possession or former possession of such inheritance, legacy, or donation, does not form part of the accrual of his/her estate
It should be noted that this system does not prevent any spouse from claiming maintenance from the other or his or her estate after the death of such spouse.
The court may, during divorce proceedings declare any accrual to be forfeited by any spouse, whether wholly or in part.
We highly recommend that you consult your family attorney before entering into marriage even if you intend to get married “in community of Property”
