The terms “in community of property “and “out of community of property” are often used when referring to the property regime of a marriage, but what do these terms mean and what are the consequences of making these choices when getting married?

Essentially, there are two broad categories to choose from:

  • Marriage IN community of property; OR
  • Marriage OUT of community of property.

Marriage IN community of property

In South Africa, all marriages default to IN Community of Property, unless the parties choose otherwise by entering into a valid ante- nuptial contract BEFORE the marriage.

If you choose this option, all property acquired by either spouse before and during the marriage is part of the joint estate, and each spouse owns a fifty percent undivided share in the communal joint estate. In addition, both spouses must consent (in writing) to certain transactions including contracting into debt or disposing (selling/ donating) of their joint assets.

One of the consequences is that if one spouse is declared insolvent, it applies to the joint estate, and effectively both spouses are now declared insolvent.

 Marriage OUT of community of property

This option has the choice of the application WITH accrual, or WITHOUT accrual

  • Marriage OUT of community of property WITH accrual

This option essential allows spouses to retain what they brought into a marriage, but share in the accumulated assets acquired during the marriage.

When the marriage dissolves (by death or divorce), the spouse’s estate which shows no growth or lesser growth acquires a claim against the other spouse for half of the difference between what has accrued to the two estates.

This means that spouses keep their assets and liabilities separate, and do not require each other’s consent when entering into certain transactions. It also protects both spouses from being declared insolvent as they would have experienced in a marriage in community of property

  • Marriage OUT of community of property WITHOUT accrual

In this option all assets and liabilities of the spouses are generally kept separate from one another (“what is mine is mine and what is yours is yours”), and spouses do not require each other’s consent when entering into certain transactions. In addition each spouse’s estate is protected from the other’s insolvency.

This option is ideal when both parties have built up considerable estates before the marriage (for example they each own businesses).

For more assistance in deciding on the ideal choice of marital property regime and creating your ante nuptial contracts, please contact Goldberg & de Villiers on 041 – 5019800.

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