What’s mine is yours, or is it? a simple guide to the matrimonial property systems in South Africa

 

Getting Married in South Africa? Here’s What You Need to Know About Your Finances

One of the main reasons divorces become bitter is disagreements over dividing up the couple’s property and debts. This includes assets such as houses, cars, savings, and investments, as well as liabilities like loans and credit card debt. The conflict usually arises because both partners want a fair share, but they may have very different ideas of what “fair” means, especially when the property was acquired at different times, some before the marriage and some during the marriage.

When you get married, you aren't just starting a life together; you are also creating a financial partnership. How your assets and debts are managed during your marriage, and, more importantly, how they are divided if the marriage ends, is determined by your "matrimonial property system." In South Africa, couples have the power to choose the system that best suits them, but this choice must be made before the wedding day.

Understanding these options is one of the most critical financial decisions you will make. This guide breaks down the three matrimonial property systems to help you protect your financial future.

The Three Matrimonial Property Systems Explained

South African law provides three ways to manage property within a marriage. If you don't actively choose one by signing a contract, the law automatically places you into the default system.

In Community of Property: The Default "All-In" System

If a couple marries without signing an Antenuptial Contract (ANC), they are automatically married in community of property.

• What it means: Think of it as putting all of your and your partner’s assets and debts into one big pot. Everything you owned before the marriage and everything you both acquire during the marriage becomes part of this joint estate.
• How it works: When the marriage ends (either through divorce or death), the entire "pot" is divided equally, 50/50. This includes property, savings, investments, and, crucially, all debts.
• The Risk: This system is built on complete sharing, but it carries significant risks. You become equally responsible for your spouse's debts, even those you knew nothing about. If your partner runs into financial trouble, creditors can claim against the joint estate, putting your assets at risk.

Out of Community of Property without Accrual: The "What's Mine is Mine" System

To avoid the default system, a couple can sign an ANC and choose to marry out of community of property. The simplest version of this excludes the "accrual" system.

• What it means: This creates complete financial separation. Each spouse maintains their own individual estate. What's yours remains yours, and what's theirs remains theirs.
• How it works: You are not responsible for your spouse's debts, and they have no claim to your assets. Upon divorce or death, you each walk away with what is legally yours, and there is no sharing of assets.
• The Downside: While this offers total independence, it can be deeply unfair, especially if one spouse's career is put on hold to raise children or manage the home. The stay-at-home parent may accumulate very few assets, while the earning spouse builds significant wealth. At divorce, the non-earning spouse could be left with less than they are entitled to.

Out of Community of Property with Accrual: The Hybrid System

This is often seen as the most balanced option. It requires an ANC and combines the independence of separate estates with the fairness of sharing the wealth created during the marriage.

• What it means: You are married out of community of property, so your estates remain separate during the marriage. However, you agree to share the growth (the accrual) that your estates have seen during the marriage.
• How it works: At the start of the marriage, you declare the value of your respective estates. When the marriage ends, you calculate the growth of each estate. The spouse whose estate grew less has a claim against the spouse whose estate grew more for half the difference in the growth.
• Example:
• Spouse A starts with R100,000 and ends with R1,000,000 (Growth = R900,000).
• Spouse B starts with R50,000 and ends with R150,000 (Growth = R100,000).
• The difference in growth is R800,000 (R900,000 - R100,000).
• Spouse B is entitled to a claim of R400,000 (half the difference).

This system protects each spouse from the other's debts while ensuring that both partners, including a non-earning spouse, benefit from the wealth accumulated during the partnership.

Conclusion: Make an Informed Choice

Whether you are married by civil union, or in terms of customary law, couples have the choice and a duty to choose which matrimonial property system best suits them and their lifestyle.

Choosing your matrimonial property system is a foundational step in planning your life together. It is not about a lack of trust; it is about financial planning and clarity. The default system of "in community of property" has serious financial risks that many couples are unaware of. By proactively signing an Antenuptial Contract, you can choose a system that fosters both independence and fairness, protecting both you and your partner in the long run.