Marriage out of Community of Property:
Previously, and more specifically before 1 November 1984, marriages out of Community of Property meant, “what’s yours is yours and what’s mine is mine”. This is often referred to as the “old order” of marriage out of Community of Property. Because this often lead to situations where certain spouses were left financially destitute after divorce, where such spouse had contributed to the marriage and estate by means other than in financial terms, the law was amended to include the system of the inclusion of accrual.
Marriage out of Community of Property, including accrual:
This marital regime implies that, what each spouse walks into the marriage with (in terms of assets and liabilities) remains specifically theirs. However, after the date of conclusion of the said marriage, the wealth by which each individual spouse’s estate grows is taken into consideration in determining how the estate should be equally distributed if the marriage is dissolved thereafter. The short of it is that whichever of the spouse’s estates grew more financially, that spouse will be liable to pay to the other spouse half of the improved difference of the accrual by which their estates grew.
Where the accrual system is included, the Antenuptial Contract which is drafted to govern the specific marriage of each couple married out of Community of Property (which contract is registered at the Deeds Office governing the jurisdiction of such couple), a beginning value and list of assets for each spouse is stated in the Antenuptial Contract.
An example of how the estate would be distributed on dissolution of the marriage would be calculated as follows: –
- A accrues R500,000.00 since the date of the conclusion of the marriage;
- B accrues R100,000.00 since the date of the conclusion of the marriage;
- A’s estate has accrued by R400,000.00 more than B (i.e. R500,000.00 – R100,000.00);
- The result is that A is liable to pay B half of this (i.e. R200,000.00) on dissolution of the marriage; this to make recompense of previously disadvantage spouses by operation of the “old order” marriage out of Community of Property system, as aforementioned.
It must be remembered that in terms of Section 2 of the Matrimonial Property Act, the exclusion of accrual must be expressly stipulated, otherwise the marriage shall include the Accrual System.
Marriage out of Community of Property, excluding accrual:
This marital regime is really the “old order” system of marriage out of Community of Property that existed prior to the amendment of the law (i.e. before 1 November 1984), to include the Accrual System. In this system, the assets of each spouse from before and during the marriage remain part of each individual spouse’s estate. In this case, it is good to keep a record of who purchases what and hence one’s accounting requires more detailed control.