Marriage OUT OF Community OF Property PDF

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The Matrimonial Property Regime system of marriage out of community of property. How the assets are regulated....

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Marriage out of community of property 1. Marriages out of community of property: A marriage will only be considered as being out of community of property if it falls into one of the following categories: Where the parties, prior to conclusion of the marriage, entered into a valid antenuptial contract, whereby community of property is excluded.  Where, after the conclusion of the marriage, the parties agree, with the permission of the court, to enter into a valid post-nuptial contract whereby community of property is excluded.  Where persons classified as black persons were married before 2 nd December 1988 without entering into an antenuptial contract or making the required statement.  Where the legal system of the marriage domicile directs that the marriage is out of community of property. 2. General legal nature of a marriage out of community of property

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The 2 main characteristics are: 

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That after the conclusion of the marriage the 2 spouses retain their own separate estates and normally no joint estate is formed, in other words, no merging of estates takes place and Each spouse manages his or her own estate independently.

After entering into the marriage each spouse retains the assets eh or she had prior to the marriage and the assets required after the conclusion of the marriage fall into the separate estate of the spouse who has acquired them. However, it is possible for spouses to be co-owners of certain assets such as the house. Each spouse has full capacity to act- there are no juristic acts that require consent. One spouse cannot alienate the assets of the other spouse without consent and should it happen the spouse can reclaim from the 3rd party. Spouses can contract independently and they can also enter into contracts with each other. Spouses are not liable for each other’s delicts. Spouses can institute delictual claims against each other & spouse can bring an application for the sequestration of the estate of the other spouses. Contracts concluded by one of the spouses only bind the estate of that spouse. One spouse cannot be held responsible for the debts incurred by each other. Necessities= both are liable for the debt. Creditor can claim from one or from both. Where one of the spouses is held responsible for the entire amount he or she may in opposite circumstances have a right of recourse against the other spouse upon the dissolution of the marriage. 3. The antenuptial contract 3.1 name and purpose of the ANC: Prospective spouses reach agreement, prior to entering into the marriage, on certain aspects regulating the invariable consequences of marriage. They can, for instance, decide that community of property will be excluded or that the accrual system will not apply to their marriage. Other patrimonial aspects of the marriage, like a post-nuptial

donation, arrangements about succession or the setting up of a trust, can also be included in the antenuptial contract. The term ANC may be misleading because we are not dealing with a normal contract creating obligations between the contracting parties. The main purpose of an ANC is not to create contractual obligations but rather to regulate the patrimonial consequences of the marriage. 3.2 Requirements for an enforceable antenuptial contract: Section 87 of the Deeds Register Act 47 of 1937 prescribes the formalities that must be adhered to in order for an antenuptial contract to be valid and enforceable against 3rd parties. Possible to enter into valid ANC without fulfilling section 87. Informal agreement will however only have inter partes application and as far as the relationship between spouses and 3 rd parties is concerned, the spouses will be regarded as married in community of property. S86 directs that unless ANC is registered in accordance with s97 it would have no legal validity. Can only be enforced if it was afforded publicity- this level of publicity is attained by registering the antenuptial contract in the deeds registry. According to section 87 of the Deeds Registry Act, the antenuptial contract must comply with the following formal requirements before it will be binding on third parties: 1. It must be attested by a notary; and 2. If it is executed in SA, it must be registered in the deeds registry within three months after the date of its execution. Section 88 of the Deedsz Registry Act provides for the possibility that spouses may agree on the terms of their antenuptial contract prior to entering marriage, but only comply with the formal requirements set out by section 87 after the conclusion of marriage. The court can upon application grant permission for the post-nuptial notarial contract execution and registration of an antenuptial contract, provided that the terms of the contract were agreed upon prior to the conclusion of the marriage. The application can be brought by one or both spouses, or even by a third party, for example the beneficiary of a testamentary provision. When applying section 88, the following must be met: 1. The parties must provide the court with good reasons why they had omitted to comply with the formal requirements; and 2. The application for post-nuptial registration must be brought within a reasonable period from the time that the spouses became aware of the omission. 3.3 Termination of and amendment to the antenuptial contract An antenuptial contract is not terminated by the dissolution of the marriage whether it be divorce or death of one of the spouses. Contract is only terminated if: 

All terms have been fulfilled, or

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The terms have become irrelevant or impossible, or The antenuptial contract is terminated by an order of court.

The prospective spouses are free, after they have concluded the antenuptial contract, but before they have entered into the marriage, to amend or even cancel the antenuptial contract altogether by way of an informal agreement. ANC can be amended in specific ways. Some terms and conditions concerning only the two spouses and which do not affect the interests of third parties may be amended by a mere informal post-nuptial agreement by the spouses. For instance, the spouses can agree to alter or even cancel a donation clause contained in the antenuptial agreement. An exception to this rule is that the spouses are not allowed to amend any terms relating to the accrual system although third parties apparently have no interests in such arrangements. Section 21 of Matrimonial Property Act permits spouses to apply to the High Court to cancel their antenuptial contract and thus change their matrimonial property regime. Testamentary benefits contained in the antenuptial contract can be amended under certain conditions: 1. Where the spouses have nominated each other as testamentary beneficiaries they can amend this provision through a valid joint will. It is, however, impossible for a spouse to amend a testamentary provision contained in an antenuptial contract unilaterally. 2. Where the spouses have agreed in the antenuptial contract to benefit a third party they can amend the provision by executing a joint will. If however, the third person was also a party to the antenuptial contract the consent of the third party is also required before the amendment will be valid. The consent of a third party is also required if the third party is not a party to the agreement, but has already accepted the benefit conferred on him or her by the ANC. 3.4 Contents of the antenuptial contract The general rule is that the prospective spouses are free to include any provision they want in the ANC. Only restriction is to include something contrary to the law. Not allowed to exclude invariable consequences such as consortium. Four types of clauses: 

Regulating the matrimonial property system

To exclude the normal patrimonial consequences of entering into a marriage, namely the creation of comprehensive community of property. Where the parties agree to exclude community of property they normally also agree to exclude community of profit and loss. This indicates as seen above, that pre- and post-nuptial contract assets, as well as debts, form part of the separate estates of each spouse and that no joint estate is formed. Where spouses enter into ANC whereby they exclude community of property and of profit and loss the accrual system will automatically apply. ANC= standard. Wish to exclude accrual= express terms.

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Clauses pertaining to succession:

Occasionally the spouses reach an agreement, contained in the ANC, concerning the distribution of their assets after death. Normally, spouses nominate each other as sole beneficiaries, but sometimes they agree for a third party for example a child will inherit the estate of the deceased. 

Benefits and donations:

It is possible for the spouses to include an agreement in the ANC to the effect that one spouse will make a donation to the other spouse or even that one spouse will make a donation to a third party. At the moment spouses are free to make donations to each other during the subsistence of the marriage and hence it is no longer necessary to make provision for future donations in the ANC. Donations may be subject to conditions or clauses. In the case of a condition, the donation is dependent on the occurrence of an uncertain future event- like the birth of a child or receiving an inheritance. It is also possible to include a clause stipulating that the donation can revert back to the estate of the donor. The court has ruled that the spouses are allowed to agree that a donation will revert back to the estate of the done in the case of a future divorce. 

Liability for household expenses:

The liability of spouses to provide for household expenses is currently regulated by section 23 of the Matrimonial Property Act. Spouses are compelled to contribute pro rata according to their financial means to the purchasing of household necessities. Financial means= incomes and assets. However with 3rd parties, spouses are jointly and severally liable for any expenses incurred for household necessities. Creditor can claim the full amount of the debt from either spouse, irrespective which one has incurred the debt. 

Antenuptial contracts entered into by minors

Parents do it on behalf, child must sign. Consent to marry, no consent for ANC void ANC hence married in community of property. If minor has no consent to enter marriage or ANC section 24(2), ANC is valid and enforceable. 4. The Accrual System Share gains made during the marriage. Legal nature of accrual system:     

Comes into effect at dissolution of marriage either death or divorce. Deferred community of property. Smaller estate of spouse has right against the other. Amount of claim is half of the difference between the accruals of the 2 estates. When court grants an order for division due to squandering the 50/50 can be altered.

Calculation of accrual: 1. Determine net commencement of prospective estates. 2. Determine the final net value of respective estates. 3. Determine of accrual of each spouse’s estate. 4. Calculation of accrual claim Determination of net commencement value:   

No declaration of assets rebuttable presumption of 0. Where debts>assets regarded as nil. Calculate taking inflation into account. Can agree not to use CPI on all assets but specific assets.

Determination of the net end value:  

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Excluding all unpaid debts. Exclude following assets: damage except patrimonial loss during the marriage. Non-patrimonial loss such as satisfaction or compensation for pain and suffering is disregarded. Inheritance, legacy or donation. Also proceeds from asset or replacing asset. Spouses can consent which to exclude. Donations to each other are excluded.

Determination of accrual: 

Net final value- net commencement value

Calculation of the accrual claim: 

Smallest accrual means claim against other spouse or difference....