When what’s yours is yours and mine is mine but sometimes it can also be ours?

In South African Law, there are two matrimonial regimes that apply to parties who enter into a Civil or Recognized Customary Marriage. These regimes are regulated by the Matrimonial Property Act, 84 of 1988 (‘’MPA’’).

These two regimes are:

In Community of Property

Spouses have what is referred to as a joint estate, meaning all their assets and liabilities (regardless of who acquired an asset or incurred a debt) are combined and the spouses may equally benefit from the asset and/or are equally liable for the debt. 

Being married in community of property also means that either spouse may not distribute, sell, cede any asset of the joint estate without the consent and knowledge of the other spouse. Similarly, neither spouse may encumber the joint estate with liabilities without the consent and knowledge of the other spouse.

This is the default matrimonial regime applied in our country i.e. if the future spouses do not sign an Antenuptial Contract prior to the solemnization of their marriage then the matrimonial regime applicable is automatically, in community of property. 

Out of Community of Property

Alternatively, future spouses may elect to plan for the possibility of divorce or even as a means of protecting an existing asset base by signing an Antenuptial Contract, commonly referred to as an ANC. 

The matrimonial regime applicable is then Out of Community of Property, which essentially means that you and your spouse agree to contract out of having a joint estate and in the eyes of the law your respective estates are viewed separately. 

This is especially beneficial for spouses who in the future, intend to engage in various business ventures or investments and wish to keep these ventures and investments from forming part of any divorce proceedings in the event spouses elect to go their separate ways.

This freedom to contract without the consent or even knowledge of the other spouse, also protects each spouse from the other spouse’s creditors for a debt or liability they were not a party to. Therefore, your property, investments or any assets you may hold in your name are protected from creditors and/or attachment. 

The ANC can be as simple as a ‘’straight ANC’’, meaning that you and your spouse literally agree to keep your estates separate i.e. what’s yours is yours and what’s mine is mine. This is an ANC without the Application of the Accrual System. 

Alternatively, spouses can elect to have an ANC with the Application of the Accrual System. This is often viewed as a ‘’fairer’’ version of the ANC, where spouses not only benefit from the freedom to contract and protection from each other’s creditors, in addition a spouse whose estate has not grown much over the duration of the marriage, may receive half of the difference in the growth from the spouse whose estate has grown over the duration of the marriage. 

How exactly does Accrual work?

The accrual is determined by calculating the difference in the nett commencement value and the nett termination value of the estate of each spouse. The value of the difference in the accrual of the two estates, taking inflation into account, is then divided equally.

Here’s a simple example:

Commencement Value1
Husband – R500 000.00	Wife – R1 000 000.00
Less Termination Value
Husband – R1 000 000.00	Wife – R2 000 000.00
Difference in growth of the estates over the duration of the marriage
R500 000.00	R1 000 000.00
Accrual paid by Wife to Husband is R250 000.00
Final Value
R1 250 000.00	R1 750 000.00

From this example, it is clear that the Wife’s estate has grown more than that of her Husband’s over the duration of the marriage. The difference between to the growth in their two estates is R500 000.00 and the wife must then pay over R250 000.00 to ensure that their estates end on an equal footing at the end of their marriage.

Inheritances, donations, legacies or any asset specifically referred to in the ANC are excluded from the calculation of the accrual, as well as any amount paid to a spouse for non-patrimonial damages i.e. pain and suffering. 

It is important to note that an ANC must be signed by both parties before the parties marry and in front of a Notary Public, who will then attend to the registration of the ANC at the relevant Deeds Office. If parties do not sign and ANC before they marry, then the default matrimonial regime is applicable. 

If after marrying, the spouses elect to merely sign an agreement between them, this does not change their matrimonial regime, which means it is of no force and effect against creditors and/or third parties and will only be binding between the parties (see Honey v Honey 1992 (3) SA 609 W at 612 B-D).

Parties can only change their matrimonial regime by way of a formal application to Court, in accordance with Section 21 of the Matrimonial Property Act (“MPA”). This document is then referred to as a Post Nuptial Contract. 

The importance of Section 21 has been reinforced in number of cases over the years and most recently in a judgment handed down by Judge Collis of the North Gauteng High Court on 12 February 2021, wherein the judge upheld an exception to the Plaintiff’s claim.  Specifically Judge Collis found that if the parties intended to the amend their matrimonial regime from the existing “Out of Community of Property” to that of “In Community of Property”, they should have complied with the provision of Section 21 of the MPA. In addition to the Plaintiff being unable to prove the existence of an alternative matrimonial regime, she was also ordered to pay the cost of the opposed court application. 

Although it may seem like an additional expense to consider to executing an ANC prior to the wedding, it is often the wiser course of action to be made aware of your options before the happy union takes place.

A link the Honey v Honey judgment can be found here:

https://www.fisa.net.za/wp-content/uploads/2012/03/HONEY-v-HONEY-19921.docx

A link to the recent decision by Judge Collis can be found here: http://www.saflii.org/za/cases/ZAGPPHC/2021/121.pdf