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SA's No 1 Insurance Blog

So you’ve finally met the person of your dreams. Everything you’ve ever wanted in a man or woman has finally arrived.

In the beginning it was all champagne and romance. But then things started getting complicated…
The discussion turned to planning a future together. Both of you agreed that a commitment needed to be made. So inevitably, the topic of marriage came up.

Let’s start off with the definition of marriage:

Marriage is the legally or formally recognised union of two people as partners in a personal relationship

Now the one scary word in that whole definition is the term ‘legally’. Our experience with anything ‘legal’ has usually involved the separation of ourselves from our money, so you might want to pay close attention every time you hear the word ‘legal’.

 Marriage involves asking yourself three questions:

  1. Do I really want to be with this person for the rest of my life?
  2. How much do I really know about this person?
  3. Which of us has the most to lose if the marriage doesn’t work out?

Answering the first question is fairly obvious. Even if both of you have nothing to lose financially, making a mistake here removes the right to be called ‘single’ and replaces it with the term ‘divorcee’. For the ladies, it’s no more ‘Miss’ but ‘Ms’. And we haven’t even touched on the loss of your maiden name.

The second question is more important from a financial perspective.

  • How much do you really know about their spending patterns?
  • Are they in debt up to their eyeballs?
  • Do they owe thousands of Rands on their credit cards?
  • Are they blacklisted by any chance?
  • Do they have any savings or investments?
  • Are they gainfully employed or will you be viewed as their source of income?

Now if you aren’t comfortable asking these questions, then maybe it’s time to ask question one again?
A divorce ten years down the road could set you back permanently, which brings us to the last question – Who, between the two of you,  has the most to lose?
If both of you are each contributing their fair share, then fine; but what if you – or your partner – has the most to lose financially?

The trouble comes in when the answers to these three questions are:

  1. Yes, I want to be with them for the rest of my life
  2. No, I don’t know too much about their finances, and
  3. I own a paid off property while they own a financed car

At this point it might help to investigate the various matrimonial regimes.

The Matrimonial Property Act

This Act requires both of you to decide beforehand on whether you wish to enter into an antenuptial (ANC) contract or not.

The three matrimonial options:

  1. Marriages without an antenuptial contract. In other words, marriage in community of property.
  2. Marriages with an antenuptial contract including the accrual system, and
  3. Marriages with an antenuptial contract excluding the accrual system.

Marriages are automatically in community of property (COP) unless an antenuptial is entered into.

The pros and cons of marriage in community of property

Another name for Community of Property is Community of Profit and Loss. Basically what this means, is that all the assets of the spouses at the date of marriage are joined together in one community estate and each partner then has a 50% claim against them.
All assets bought during the marriage also from part of that community and are shared equally.

But surely the estates are separated at death?

No, it’s still a joint estate but the good news is that only half of the joint estate is subject to estate duty.

A joint estate creates a problem if the deceased spouse decides to leave a car to someone other than their partner. Remember that the deceased only owned 50% of that car. The other 50% belongs to their surviving partner.

What your spouse can, and cannot do…

Your spouse may not without your written permission:

  • Mortgage your joint property
  • Sell off joint assets such as shares, life insurance, or fixed deposits
  • Withdraw money from an account held in the name of the other spouse
  • Cede life insurance to a third party
  • Enter into a credit agreement
  • Bind themselves as surety
  • Donate joint assets to other persons
  • Open legal proceedings against another person

Can anything be excluded from the community of property?

If certain assets are to be excluded from the community of property, then this must be done via an ANC before getting married.
However, any gifts or inheritances from other persons may be excluded in terms of a separate antenuptial contract.

What if your spouse files bankruptcy?

Remember question two about not knowing their financial history? Well guess what; there is only one joint estate between the two of you – If he is declared insolvent then so are you.
And if this happens it means that those assets excluded from the joint estate, are now attachable.

And what if you’re married under customary law?

These marriages fall under the Recognition of Customary Marriages Act (RCMA). All customary marriages entered into before the 15th of November 2000 are recognised by this Act.

People married under customary law must register their marriage in order for it to be recognised.

For those married before the 15th of November 2000, they were asked to do so within twelve months of the Act coming into being. This is especially important when it comes to protecting the rights of women and children.
Why? Because it’s difficult to prove the marriage once your partner is deceased unless the marriage was registered.

Customary marriages occurring after the 15th of November 2000 must be registered within three months of the date of marriage.

All customary marriages where there is one husband and one wife are seen as marriage in community of property unless they establish an antenuptial contract. If a second spouse is to be taken, then a contract needs to be entered into. This must first be approved by the courts.

Conclusion

On the one hand, we have a situation of: “If you love me you’ll marry me based on ‘Till death do us part, and for better or for worse’.” On the other hand, we have the frightening divorce statistics in our country. None of us can say what will happen tomorrow, never mind ten years from now.

If both of you are financially independent of each other – with each having their own assets – then consider an antenuptial agreement.
And don’t let the cost of drawing up an antenuptial contract scare you off. We often mention legal insurance on this site. Two of the benefits usually on offer are:

  • Antenuptial contracts, and
  • Last Will and Testaments

And the cost of legal insurance is minuscule compared to the cost of having an attorney draw one up.

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