Divorce, moneys lent and advanced to the other spouse
It is not uncommon for parties in a marriage to advance to advance to the other spouse amounts of money from time to time. Between the two spouses this would normally be regarded as a transaction of borrowing money or lending, but the legal implications might be otherwise depending on the matrimonial system (married in community or out of community of property) applicable to the marriage.
Where the spouses are married to each other in community of property, the joint estate is divided on the date of divorce as it exists on date of divorce, including all the assets and liabilities. Parties who are married in community of property obtain an undivided half share in all the assets which constitute the joint estate and in most instances become jointly liable for all debts incurred. So if the spouses were married in community of property and enter into an agreement in terms whereof the one party lends an amount of money to the other, the right to claim such an amount is an asset of the joint estate and the liability to pay the amount is a liability of the joint estate. It therefore follows that it is impossible to enforce such a claim on divorce as a result of the fact that the parties are married in community of property.
Where spouses are married out of community of property it is possible to claim as a result of the fact that the parties are married out of community of property and does not share in the profit or loss. The right to claim such an amount would be an asset for purposes of determining the value of a spouse’s estate. Where parties’ were married before 1 November 1984 a claim in respect of moneys lent will form a basis of a claim to claim a transfer of assets in terms of section 7 (3) of the Divorce Act. Where parties married after 1 November 1984 a claim to recoup moneys advanced would be simple if proved.
It is also interesting to note that a claim for moneys advanced where the parties married out of community of property, cannot prescribe in terms of the Prescription Act 68 of 1969.
It is therefore important to note that where a party is married in community of property and that party advanced moneys to the other spouse that a claim cannot be instituted for the recovery thereof.