The politics of marriage

2013-10-20 14:00

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Chloe Webb is getting married in December. She asked City Press for advice on the different types of marriage contracts. Both she and her fiancé have built up their assets and are managing their own investment portfolios. Soré Cloete, senior legal manager at Old Mutual, outlines three basic types of marital regimes: in community of property, out of community of property (with accrual) and out of community of property (without accrual)

In community of property

If you do not have an antenuptial contract drawn up before your wedding, your marriage is in community of property by default. This means that you and your partner are considered to have 50-50 shares in everything you own. Legally, this includes all your assets and even any businesses that either one of you may have started up before the marriage.

Legal implications:

» If one of you dies, then both your assets – for example, your bank accounts – will be frozen, even if you had separate bank accounts.

“You should ask the nominated executor to get the will of the deceased partner lodged with the Master of the High Court as soon as possible. The reason is that although the will nominates an executor, that executor appointment has to be authorised by the Master of the High Court. The executor then has the power to ‘unfreeze’ the bank account of the surviving spouse,” Cloete says.

Legally, the death of a person who leaves property or a will must be reported to the Master within two weeks of the death.

» If your spouse becomes bankrupt or racks up huge debts, your spouse’s creditors can legally attach your assets in order to recover the money owed to them.

» On entering any legal contracts, you will require the signature of both spouses. For example, you cannot nominate your child as a beneficiary on a life insurance policy without the written consent of both spouses.

Antenuptial contract

As more couples choose to get married in their mid- to late 30s, they often find they have significant assets to their name.

They obviously would want to protect these assets in case there is a divorce at a later date. For example, by the time you are in your late 30s, you may have already purchased a flat or possibly even two properties, with one earning a rental income. You may also have opened a business.

An antenuptial contract stipulates that assets you already owned before the marriage and assets that you build up after the marriage will remain your assets, and will not be split up on divorce. Chloe and her fiancé have decided to get married out of community of property with no accrual.

“This contract makes the most sense for us since we’ve both already built up our own assets and I plan to continue to actively manage my own investment portfolio. It will help simplify our individual budgeting process.

“I also want to ensure that I’m never one of those women who loses touch with her financial situation. Any big-ticket purchases, such as a house or property, will be done as a joint purchase,” she explains.

Legal implications:

» Your assets are protected in the event of your spouse becoming bankrupt or accruing high debt, where creditors want to attach assets to recover the money they are owed.

» Any bequests or inheritances are automatically excluded.

Antenuptial (with accrual)

If you want to get married out of community of property, you need to decide whether the accrual system will be applicable or not.

This type of marital contract has the same advantages as marriage in community of property.

The difference is that the growth in all assets acquired during the marriage will be shared.

With the accrual system, both of you keep ownership of your precontract assets, but on death or divorce, the spouse with the smaller accrual of assets acquires a claim against the spouse with the bigger accrual of assets.

Such a claim is equal to half of the difference in the accrual of the respective estates.

The accrual system will apply by default, unless you specifically exclude it in the antenuptial contract.

Cloete points out that an antenuptial with accrual marital contract typically offers protection for the nonworking spouse.

Legal implications:

» If one of you dies, you must understand who has the accrual claim and the extent of the claim.

The spouse with the greater accrual and who owns more assets will have to take the accrual claim into account before you can determine what can be left to other beneficiaries such as children.

» “We had a case once where a woman who stayed home opted to leave everything she had to her children. However, she died before her husband. This meant the accrual claim became due to her estate in terms of their marital contract.

The claim was now an asset in her estate, which she had bequeathed to her children. Her husband was forced to sell his assets to meet the terms of the will, despite the fact that both children were minors and still under his protection,” says Cloete.

If you are unsure about your rights, speak to an adviser, who will be able to assist you in planning your finances wisely.

Domestic partnership bill

“Couples who live together can look forward to clearer financial rights in future.

“The proposed Domestic Partnership Bill, once introduced into law, will regulate the legal status of people who are in a domestic partnership, but have not yet tied the knot.” says Cloete.

“And this law will apply to opposite-sex and same-sex couples.”

The bill provides rights and obligations to domestic partners who are not concerned with registering any form of partnership.

It has identified all the important and relevant aspects of an unregistered domestic partnership, such as dividing a property, maintenance and intestate matters (where a person dies without a will). It is not clear when this will become law.

Tips to consider when registering a civil union

»?Both parties must be 18 years of age or older.

»?You must have valid South African identity documents.

»?If one of you is a foreign citizen, a valid passport is required.

»?If one or both of you are divorced or a widow/widower, proof of the divorce order or death certificate of the deceased spouse will be required.

»?Neither of you may be already married in terms of any other act or civil union.

Living together

As relationships in South Africa become more complex as couples cross racial, cultural and religious borders, more and more couples are opting to live together rather than tie the knot.

“Live-in couples, their immediate families and their wills have been a recipe for much grief,” says Cloete.

Common law marriages are not recognised. This means you are not automatically regarded as your partner’s spouse, even though you may have been living together for years. It also means unless you are specifically recorded as an heir or beneficiary, you won’t be able to inherit from your partner.

You can register a live-in relationship under the Civil Union Act and decide what form of marriage contract you wish to sign. But to end a registered civil union, you have to request a court to terminate it and it will be handled just like a divorce.

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