The three matrimonial property regimes available in South African law determine what happens financially both during the marriage and when the marriage ends by death or divorce.
This will apply if you get married with no antenuptial contract (ANC). The estates of both spouses are merged into one joint estate and both spouses share equally in the assets and debts of the joint estate. This may sound very romantic, but the danger is that insolvency or even minor debts of the one spouse affect the whole of the joint estate. The assets of one spouse can be taken by persons to whom the other spouse owes debts.
If a couple signs an ANC, the automatic regime is a marriage out of community of property with the inclusion of the accrual system. In the ANC each spouse records their commencement value (i.e. the rand value of their estate at the beginning of the marriage). During the marriage each spouse keeps control over his/her own property, builds up his/her own estate and is responsible for his/her own debts. When the marriage ends by death or divorce the assets and debts of each spouse are calculated to work out the end value of each spouse's estate and the "accrual" is then calculated. The accrual is the difference between the end value of the estate of each spouse and the commencement value. (The commencement value is adjusted to take account of inflation). In calculating the end value of the estates, all inheritances, legacies (things left to you in a will), donations and awards of personal damages that the husband and wife have received during the marriage are excluded. Once the final calculations have been done, the estate with the larger accrual pays half the difference to the estate with the smaller accrual. Here is a simple example (leaving out the inflation adjustment):
Anne and Bob are married out of community of property with the accrual system in 1990. In their ANC Anne's commencement value is R10 000 and Bob's is R100 000. In 1998 they get divorced and Anne's estate has increased to R50 000 while Bobs has increased to R120 000. The accrual in Anne's estate is R40 000 while the accual in Bob's estate is only R20 000. The difference between the two accruals is R20 000 and Bob has a claim against Anne for half of this difference because her estate increased more. Anne would therefore pay Bob R10 000.
If you do not wish the accual system to govern your marriage, you still sign an ANC, but your ANC must specifically exclude the accrual system. Each spouse then has a separate estate and on the termination of the marriage neither spouse has any claim for transfer of assets against the other. At the same time as drawing up your ANC you should consider drafting new wills. In this regard see next month's column.