Who gets the property when the honeymoon’s over?

All marriages end; often in divorce but definitely in death. It’s a sobering thought, especially if you’ve recently married.

“If you own or intend to buy property for habitation, business or investment, you need to consider the implications before tying the knot,” said Renier Kriek, MD at Sentinel Homes.

Let’s look at the different types of marriage and what you need to know to protect your assets:

• In community of property

By law, without an antenuptial agreement, South Africans are automatically considered to be married in community of property.

Any properties you owned before marriage or acquired afterwards belong equally to you and your spouse. They can also be attached to pay off your spouse’s debt, and you can’t sell them or buy more without your partner’s consent.

At divorce, any properties and other assets are divided equally and on death, a surviving spouse may inherit them if they are bequeathed in the deceased spouse’s will.

It also doesn’t matter who paid the bond – this form of marriage determines who gets what in the end.

Who paid for the home or other asset is irrelevant.

“I don’t know an attorney who would recommend this model of marriage to their clients,” said Kriek.

“It’s impractical to have the parties bound at the waist as neither can act commercially without the other’s consent. In addition, it’s poor risk management because all the assets are exposed to either party’s actions.”

• Out of community of property without accrual

Historically, the growth of antenuptial contracts threatened to leave financially inactive spouses with nothing at divorce. Therefore, by default, South African law imposes an accrual system on marriages out of community of property.

For total financial independence, your antenuptial must explicitly state that accrual is excluded. This is called the “cold exclusion.”

If married by the cold exclusion, all the assets you acquired before and during marriage remain yours and cannot be attached to your spouse’s debts.

You can also buy and sell property without their consent, and engage in commercial activity unfettered by the bonds of matrimony.

At divorce, you leave with all your assets and just have to worry about disposing of jointly purchased property.
On death, the surviving partner gets only what was bequeathed to them.

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This model is ideal for couples who want to retain their financial freedom, grow their wealth independently, and protect their assets from each other’s creditors.

Just remember that maintenance claims are potentially open to all spouses on the dissolution of the marriage, even if the parties chose the cold exclusion.

“For entrepreneurs and investors, it protects their business portfolio while sparing their partners the financial risks they willingly take on,” said Kriek.

• Out of community of property with accrual

Without an accrual exclusion clause in your antenuptial agreement, the accrual system automatically applies.

Assets you owned before and those acquired after marrying remain yours alone, cannot be attached to pay creditors, and you are free to buy and sell property at will.

However, at divorce or death, a person can claim half of the difference between their estate and their spouse’s higher-valued estate. In effect, it’s “in community of property” at the end without all the restrictions during the marriage

“It ensures both come away equal, and allows for one spouse to take time off to rear the children, or for one to work to put the other one through school or university, even though they are married out of community of property. This is because, in the end, there will be a divvying up of assets.

“However, it could still mean losing the property you owned separately because assets may be sold to cover the accrual payment due on the dissolution of the marriage.”

Get legal advice

Never assume there’s no such thing as a common-law spouse in South Africa. Even a life partner may gain ownership of your assets, without any formal ceremony or registration. If you are buying a property with a life partner or other romantic interest, please be sure to have a partnership agreement drawn up by an attorney.

“Do the smart thing and get advice from your attorney on the best way to proceed; a contract may seem unromantic when wedding bells are ringing but it will protect you both in the long run,” says Kriek. “It’s just the sensible thing to do.”

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