Divorce Attorney Cape Town

Hiding assets in a divorce.


In a recent matter before the Supreme Court of Appeal in the case of DEB v MGB 2014 ZASCA 137, the court expressed its disapproval of parties in divorce proceedings who does not properly disclose their assets. The attitude of many husbands, particularly in relation to money claims where they control the money and assets, can be characterized as “catch me if you can”.

They set themselves up as immovable objects in the hopes that they will wear down the other party. They use every means to do so. They fail to discover and disclose properly, fail to provide any particulars of assets within their peculiar knowledge and generally delay and obfuscate in the hope that they will not be “caught” and have to disgorge what is in law due to the other party.

In this matter the husband clearly failed to comply with the provisions of s 7 of the Act. He delayed providing what were obviously relevant documents until the last minute and then did not discover them. He declined to provide any documents concerning the financial position of one of his businesses. He did not provide documents which could be used to trace assets derived from the excluded assets. He did not prove that documents relating to another business were furnished timeously or at all pursuant to a subpoena issued after initially claiming that he could not furnish these without the consent of his co-trustees. He inexplicably did not testify and then took a technical point concerning documentary proof.

The court stated that the approach of the husband deserved censure and may have warranted a punitive costs order at the trial.

In this matter the husband was ordered to pay the wife an amount of R 6.4 million and to transfer half of a loan account of approximately R 11 million to her. The husband was also ordered to pay the costs of the appeal.

Compiled by Bertus Preller – Family Law and Divorce Attorney

http://www.divorceattorney.co.za

Think before you get married


Political Marriage

The short-lived “marriage” between the DA’s Helen Zille and Agang SA’s Mamphela Ramphele might be old news for some but a marriage without the existence of an Antenuptial contract or “ANC” can have devastated consequences for the parties involved not only during the course of the marriage but also in the unlikely event of a divorce. Therefore if you do get married make sure your paperwork is in order before the big day otherwise the damage may be substantial. Unfortunately, as in the case in question parties focus so much on the marriage ceremony itself that they completely forget the implications of neglecting to make an informed decision regarding the marriage regime, in the unlikely event that they do divorce.

In accordance with the Matrimonial Property Act 88 of 1984, which came into operation on 1 November 1984, there are three forms of matrimonial property regimes in South Africa, namely:

Marriages in community of property
Marriages out of community of property without accrual
Marriages out of community of property with accrual

Marriages in community of property

Marriage in community of property is undoubtedly the cheapest and most popular form of all the matrimonial regimes, although deeply flawed. No ANC is required, so if you marry without an antenuptial contract, you will by default be married in community of property. In this form of marriage, the spouses’ estates (what they own/assets and any debt/liabilities) are joined together and each has the right of disposal over the assets; they are equal concurrent managers of the joint estate. Each has an undivided or indivisible half share of the joint or communal estate.

Advantages of marriage in community of property

You don’t have to enter into a special contract before being able to get married.
When you are the financially weaker spouse, you get to share in the assets of your spouse.

Disadvantages of marriage in community of property

When you are the economically stronger spouse, you have to share your assets with your spouse.
You are jointly liable for each other’s debts. This is particularly problematic on insolvency.
The joint administration of the estate is rather complicated.
When a marriage starts to fail, it can become difficult to obtain joint consent.

One of the most devastating consequences of a marriage in community of property is that when one spouse becomes insolvent (cannot pay his/her debts), both spouses will be declared insolvent, because there is one communal estate. If there is a court order against either one of the spouses, the communal estate can be lost.

The consequences of divorce when married in community of property

Upon divorce, the assets of the joint estate as at the date of divorce will be divided equally between the parties, unless a spouse claims forfeiture and the court grants such a forfeiture order.

Marriages out of community of property

This matrimonial property regime involves an ANC (i.e. an agreement entered into before the marriage) where community of property and profit and loss are excluded. There is no joining of the spouses’ estates into one joint estate. Each spouse has his/her own separate estate, consisting of his/her premarital assets and debts, and all the assets and debts he/she acquires during the marriage. They each administer their own separate estates and have full and exclusive control over their own property. By marrying out of community of property, the spouses choose to keep their estates separate and whatever assets and liabilities they individually had before the date of marriage will remain part of their separate estates. The spouses can, however, agree to include the accrual between them so that both spouses will share equally in the growth during the marriage of each other’s separate estates.

Antenuptial contracts (ANC)

A marriage out of community of property is achieved by drawing up an ANC. The ANC will be the most important contract that a married couple will sign in their lifetime. Entered into before marriage, the purpose of the contract is to change some or all of the automatic financial consequences of marriage.

The ANC allows the husband and wife to tailor-make their very own matrimonial property regime. They can include any provisions they like in their ANC, as long as the provisions are not against the law, good morals or the nature of marriage. ANC’s are problematic to change as they dictate the financial and proprietary consequences of the couple’s future and can affect the rights of the couple’s creditors.

Couples may enter into one of two types of ANC:

an ANC that excludes community of property, community of profit and loss, and the accrual system; or
an ANC that excludes community of property and community of profit and loss, but includes the accrual system.

The ‘accrual’ is the extent to which the husband and wife have become richer by the end of the marriage, in other words, the amount by which the spouses’ joint wealth has increased over the period of the marriage. When married according to the accrual system, each spouse acquires a certain right to the other’s property on divorce. Neither system is superior to the other. The marital property regime chosen (i.e. with or without accrual) must suit the couple’s relationship dynamic and specific needs. Note that the ANC is a normal contract, so all the rules as to fraud, duress and mistake apply.

The consequences of divorce when married out of community of property without the accrual after 1 November 1984

In a marriage out of community of property without the accrual contracted after 1 November 1984, there can be no claim for a transfer of assets. The argument is that there are now three matrimonial property regimes to choose from, and if the parties willingly decided to marry out of community of property and without the accrual system, one of the parties cannot later request a redistribution of assets. In such a regime, upon divorce, each party will retain their separate estates, i.e. what they had upon marriage and including all growth to the separate estate that occurred during the marriage, minus any losses that may have been sustained. For example, if the husband came into the marriage with R10 000, he would leave with R10 000 + profits ˗ losses.

A spouse who contributed to the other spouse’s estate, whether in cash or otherwise, will have a difficult time proving that he/she is entitled to anything from their ex’s estate on divorce as contributions play no role if the parties are married without the accrual. If, for example, the wife stays home to raise the children and does not contribute financially towards the marriage and the other spouse works and accumulates assets, the wife may find herself with nothing and no claim to her husband’s assets.

Advantages of marriage out of community of property without the accrual

Each spouse keeps his/her own assets and is free to deal with his/her own estate as he/she likes.
Spouses are generally not liable for each other’s debts. Thus, if one spouse becomes insolvent, creditors cannot touch the assets of the other spouse.
The financially stronger spouse does not have to share his/her estate with the weaker spouse. This is subject to judicial discretion and forfeiture of benefits.

Disadvantages of marriage out of community of property without the accrual

The economically weaker spouse, traditionally the woman, does not get to share in the estate of the stronger spouse, even though she may have indirectly contributed to the estate by running the household and looking after the children. This is subject to judicial discretion and forfeiture of benefits.
An ANC has to be entered into in order to marry out of community of property. This costs money, and the parties must pay the fees of a notary and costs of registration.

Marriages out of community of property with the accrual

After 1984, anyone entering into an ANC that excludes community of property and community of profit and loss is automatically married under the accrual system. Spouses may, however, exclude the accrual system in their ANC, but if they do not do so expressly, the accrual applies. When the accrual is included, a spouse will be entitled to share in the growth of the two estates at divorce.

This is surely the most appropriate and ideal way to marry. All the assets that each party owns prior to the marriage can either be excluded or included in the accrual. If no assets are excluded in the ANC, the value of each party’s estate at the commencement of the marriage is deemed to be nil.

The consequences of divorce when married out of community of property with the accrual

Accrual is a way to ensure that both spouses in a marriage gain a fair share of the estate once the marriage comes to an end. The accrual system does not apply automatically to all marriages out of community of property. For the accrual system to apply, the ANC must be drafted in a certain way. The accrual system incorporates a calculation that is applied when the marriage is dissolved by divorce. The spouses will share the assets during the course of their marriage based on a particular calculation when the marriage is terminated.

The term ‘accrual’ is used to denote the net increase in value of a spouse’s estate since the date of marriage. In other words, what was yours before the marriage remains yours, and what you have earned during the marriage belongs to both of you. Because the right to share in accrual is exercisable only upon dissolution of the marriage, such a right is not transferable and cannot be attached by creditors during the subsistence of the marriage.

The following assets are not taken into account when determining the accrual (are not included in the net value of the estate):

Any asset excluded from the accrual system under the ANC, as well as any other asset that the spouse acquired by virtue of his/her possession or former possession of such asset.
Any inheritance, legacy, trust or donation received by a spouse during the marriage from any third party, as well as any other asset that the spouse has acquired by virtue of his/her possession or former possession of the inheritance, legacy, trust or donation, unless the spouses have agreed otherwise in their ANC or the testator/trix or donor has stipulated otherwise.
Any donation between the spouses.
Any amount that accrued to a spouse by way of damages (e.g. slander), other than damages for patrimonial loss or the proceeds of an insurance policy in respect of a dread disease.

Commencement values and accruals

Where parties wish to enter into an ANC with the accrual system, they must make sure that the commencement values of their respective estates (i.e. how much their estates are worth at the time of marriage) have been verified and accepted by both parties. It often happens in divorce matters that one party will allege that the other’s commencement value was inflated or completely inaccurate.

Upon the dissolution of the marriage by divorce, the net estate value (assets less liabilities less excluded assets and/or commencement values) of each estate is determined separately. The larger estate must then transfer half of the difference to the smaller estate. Putting it another way, the smaller estate must claim for an amount equal to half of the difference between the accruals of the respective estates. The right to share in the accrual only commences upon dissolution of the marriage by divorce.

The commencement value to be subtracted from the current value of the estate must be adjusted with the consumer price index (CPI) to make provision for any change in the value of money. To calculate the adjustment, go to http://www.statssa.gov.za and click on ‘Historical CPI’ and then on ‘Key indicators’. The factor by which the commencement value must be multiplied to get to the adapted value is calculated by dividing the value for the month of the dissolution of the marriage by the value for the month in which the parties were married.

Advantages of marriage out of community of property with the accrual

The spouses share the increase in their assets accumulated during the marriage and the economically weaker spouse benefits.
The spouses do not share their assets acquired before their marriage (but only if excluded in the ANC or included in the commencement values of the parties’ estates). The accrual system appeals to people who are already wealthy at the time of marriage.
During the course of the marriage, each spouse manages his/her estate at will. There is no complex joint or equal administration.
The spouses are not liable for each other’s debts. All that they share is their net assets. Thus, if one spouse becomes insolvent, the other spouse is protected against creditors.

Disadvantages of marriage out of community of property with the accrual

The economically stronger spouse has to share the profits that he/she made during the marriage.
One has to enter into an ANC in order for the accrual system to apply.
The calculation of accrual at the end of the marriage can be a bit complex.

Compiled by Bertus Preller

Family Law and Divorce Attorney and author of Everyone’s Guide to Divorce and Separation – Random House.

Twitter: bertuspreller

Websites:  http://www.divorcelaws.co.za or http://www.divorceattorney.co.za

Facebook: http://www.facebook.com/divorceattorneys

Book review on Everyone’s Guide to Divorce and Separation


Deur Jaco Barnard-Naudé is professor in regsfilosofie aan die Universiteit van Kaapstad.

Book

Ons leef vandag in ‘n wêreld van toenemende vloeibaarheid en pluraliteit op die vlak van persoonlike verhoudings. Die een dag besluit jy en jou beste vriend nog om lewenskoste te beperk deur ‘n woonstel te deel en die volgende dag word die platoniese vriendskap iets meer en julle woon voortaan saam as man en vrou. Of man en man. ‘n Paar jaar later besluit julle om te trou. As julle ‘n eendersgeslagtelike verhouding bedryf, moet julle deur die hekke van die Wet op Burgerlike Verbintenisse, 2006, toegang verkry tot die twyfelagtige groener gras van die huwelik. Heteroseksuele saamwoners het ‘n addisionele (en meer konvensionele) wet beskikbaar waarvolgens hulle in die huwelik kan tree – die Huwelikswet van die Jaar van Onse Heer 1961. As julle byvoorbeeld in Tamboerskloof saamwoon en besluit die huwelik is nie wat julle en ander eende van julle dam wil hê nie, hoef julle nie te trou om die verbintenis regtens erken te kry nie: die 2006-Wet maak voorsiening vir ‘n burgerlike vennootskap wat presies dieselfde gevolge as ‘n huwelik het.

Ek het al hierdie dinge geweet voordat ek hierdie uiters leesbare en akkurate boek onder die oë gehad het, omdat ek vir ‘n regsfakulteit werk en self betrokke was by die totstandkoming van die 2006-Wet. Vir diegene wat tans in ‘n saamwonery van een of ander aard verkeer, dit oorweeg om een of ander Groot Stap (insluitend skeiding van tafel en bed) te doen en nié in die regsberoep werk of betroubare vriende daarin (skaars spesie) het nie, kan ekEveryone’s Guide to Divorce and Separation aanbeveel.

Die titel is ondeurdag. Hoewel die regstema van geregtelike skeiding prominent daarin bespreek word, soos die titel aandui, handel groot gedeeltes daarvan oor die regsgevolge van die totstandkoming van ‘n huwelik of ander permanente saamwoonverhouding. Selfs die gevolge van die totstandkoming van die ouwêreldse “verlowing” (en wat die lô sê oor die verloofring wanneer jy dit in sy gesig terugsmyt) word met erns bespreek. En as lobola deel was van jou huweliksonderhandelinge en jy is getroud ingevolge die Wet op Erkenning van Gewoonteregtelike Huwelike, sal jy interessante dinge lees oor hoe om te verhoed dat jou man se aanhoudende trouery jou nie finansieel benadeel nie.

‘n Groot gedeelte van die boek handel oor die onwillekeurige partye tot ‘n saamwoonverhouding: die kinders. Daar is ‘n omvattende bespreking van wat die verantwoordelikhede teenoor kinders in ‘n gesin is – veral wanneer die ouers se saamwoonverhouding tot ‘n einde kom en ook in gevalle waar Ma en Pa eens saamgewoon, of ten minste saam verkeer, het, maar by geboorte van die kind reeds aanbeweeg het. Die boek stel dit in hierdie konteks direk en duidelik: die kind(ers) sit met die gebakte pere van julle mislukte verhouding sonder dat hulle daarvoor gevra het. Die allerminste wat julle kan doen, is alles in julle vermoë ten einde te verseker dat hulle so onbeskadig as moontlik uit die puin van julle verhouding tree.

Bostaande is maar een rede waarom die skrywer (‘n prokureur) daarvoor pleit dat egskeidings nie in litigasie behoort te eindig nie. Daar is merendeels slegs verloorders in ‘n bestrede egskeiding, en té dikwels, waar kinders betrokke is, is dit húlle wat as pionne in die vuilspel gebruik word en die meeste verloor.

Benewens ‘n omvattende verduideliking van die egskeidingsproses bevat die boek ook heelwat praktiese wenke vir mense wat deur so ‘n proses moet gaan (waartydens gesinsgeweld nie uitgesluit word nie, daarom die hoofstuk oor laasgenoemde). Dit het my lank geneem om die bul by die horings te pak en hierdie boek te lees, want egskeiding is nooit ‘n aangename onderwerp om oor te dink of te lees nie – ons dink veel eerder aan die feeste van die huweliksdag. Maar as jy jou in ‘n skeidingsituasie bevind (en nie in die regsberoep werk of daarin bevriend is nie), moet jy jou, soos vir enige stryd, hoe gemoedelik ook al, bewapen. En Preller se boek is ‘n sterk wapen. Kry dit.

divorce and separation

 

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Original article at: http://www.litnet.co.za/Article/2013-everyones-guide-to-divorce-and-separation-bertus-preller

Media interview with Divorce Law and Family Law Specialist Bertus Preller


Family Law and Divorce Law Attorney Bertus Preller
Family Law and Divorce Law Attorney Bertus Preller

Bertus Preller, was recently interviewed in connection with his book “Everyone’s Guide to Divorce and Separation” published by Random House Struik (Zebra Press – 2013). So that you can get to know Bertus better, we have included excerpts from that interview.

How long have you been involved in law?

I was admitted as an attorney in 1989 and have almost 25 years’ experience of the law.

What are some examples of the types of cases that you handle?

I represent people in divorce, both in local and international divorce cases, care and contact (custody) disputes, access (visitation) / parental disputes, parenting plans, unmarried father’s rights, paternity cases, grandparents’ rights,  step-parent and non-parent care and contact cases, international child abduction (Hague Convention) cases, relocation disputes, division of property, spousal maintenance and child maintenance matters, domestic violence and protection orders, child abuse cases, enforcement actions (where a person is seeking to enforce a court order), same-sex cases, cohabitation agreements, antenuptial agreements,  family law mediation and collaborative divorce law,  and other family law related matters. It also includes Mediation. In addition to being a litigator, I have also acted as a Mediator for many years.

Did you always want to be an attorney?

Ever since I can remember, I have always loved the idea of fighting for people who need help and helping the underdog. It was my goal, since being at high school in Grey College, to become an attorney.

How stressful is your work?

Being a family law attorney can be stressful. Our entire legal system is based on adversity and on two sides negotiating, or fighting in court, to achieve a resolution to their disputes. These negotiations, court appearances, and dealing with clients, judges and other attorneys are not exactly pleasant all the time. These relations require one to be tough, emotionally detached and sometimes even heartless. It is not fun, not glamorous and sometimes it does get ugly. The stress has a lot to do with the fact that almost everything you do is urgent and can have serious financial implications  if you mess up in court, there are going to be major implications for your client. Having said this, I love to make a difference in people’s lives, especially where children are involved.

How do you spend your day/week?

My job duties include appearing in court on behalf of clients, drafting legal documents, communicating by letter and email, conducting consultations, performing legal research, reviewing financial documents, interviewing clients, talking to attorneys, and working with psychologists, and other experts. My day is varied, with no two days being exactly alike. The largest percentage of my work-week consists of writing letters and emails, talking on the telephone, reviewing emails and correspondence, consulting with clients, drafting pleadings, reviewing financial records, and preparing for court hearings – not the kind of stuff you see on TV shows or in the movies.

Do you have celebrity clients?

Due to the nature of my work I am not able to disclose the identities of my clients, but yes, I have clients who appeared on Survivor Africa, Master Chef South Africa, actors, actresses, politicians, television personalities and some high net worth individuals.

 Do you have a “profile” of the ideal family law attorney?

In my opinion, there is no such thing as an “ideal” family law attorney. Each person has his/her own unique strengths. In appointing an attorney, I would look for someone with honesty and integrity, someone with a good work ethic, who is persuasive and communicates well, both verbally and in writing, someone who is empathetic, with excellent people-skills and a passion for helping others and practicing family law.

What is your approach to handling cases?

I believe that it is the duty of an attorney to work with his/her client as part of a team approach. Too many attorneys have a “give me the ball and I’ll run with it” philosophy, and they fail to communicate with the client during the course of the case. I take a completely different approach. After all, it is the client’s case. My job, is to communicate with my client, help determine the proper objectives, formulate a game-plan, and work hard to make sure that the client’s needs are effectively met. I understand that my client is going through what is probably the most difficult and stressful time in her/his life and need someone who will look for logical, peaceful solutions but will also be willing to aggressively fight for his/her rights if that becomes at all necessary.

Does dealing with other people’s failed relationships make you feel cynical about love at all?

I believe in marriage. It would be naive to think that dealing with divorce and separation (and all the trauma and distress that goes with it) on a daily basis, will not make one sceptical about marriage to a certain extent. I think the problem does not lie in the institution of marriage or that relationships that end in divorce were never meant to be. It is my view that the reason for many problems that we experience in relationships stems from the fact that people are fickle and that our circumstances and life experiences change and shape us every day. A healthy relationship is an evolving relationship and each partner should learn and grow through the relationship, and often through the conflicts. Marriage can be described as a series of peaks and troughs and as long as the peaks outweigh the troughs then you will be okay.

What have bad divorces taught you about what goes into a happy marriage?

There is not one universal key that unlocks the door to a happy and healthy marriage or relationship. There is a saying that a relationship is not a place where you go to take, it is a place where you go to give. Marriage for many of us will undoubtedly be the biggest financial and personal transaction of your entire life. You need to look at your partner and realize that you are not going to change him or her. Ask yourself this: “Does my partner have the basic qualities that matter to me, characteristics that are not going to change over time?” Remember that it is not all about the wedding cake, the wedding ceremony, the wedding gifts or the wedding dress. It takes a lot of work and effort to make it work. Lack of communication tops the list of the reasons for divorce. There is the cliché that women want men to know what they want and what they are thinking without ever having to tell them, but the reality is that couples need to talk and express their feelings and fears to their spouse. It is when spouses only start thinking about their own wants and needs and no longer function as a “team”, that things start to fall apart. Unfortunately in many instances our ability to learn about relationships shuts down at the point when the marriage begins to get tough and just because couples develop disagreements, I am sure that many marriages could have been saved if the couples persevered just a little more. Conflict should be seen as an inevitable part of relationships. One of the secrets to a good marriage is to find your equal partner, not a partner who is going to dominate or control you or who you can dominate or control. Any relationship  for it to work must be based on mutual respect, common purpose and of course trust. When a couple start to lose one of those ingredients, the wheels come off.

Is it possible to recover after a divorce?

Most individuals blame their ex-spouses. I think that if you can step back and say, “This is what I have done wrong and this is what I will change”, you have something powerful to teach others who go through the same issues. In many divorces, the problems that caused the divorce have existed in the relationship long before the marriage and were either not acknowledged or were ignored in the hope that marriage might heal the problems. But that is not what happens in life. Nobody can make you feel better about yourself. Someone wise once said that it takes two wholes to make a marriage, not two halves.

To find out more about Bertus Preller, visit his webpage at http://www.divorceattorney.co.za or follow him on Twitter @bertuspreller or on Facebook at http://www.facebook.com/divorceattorneys.

Divorce Attorney Bertus Preller Consults in Johannesburg


Family Law and Divorce Law Attorney Bertus Preller
Family Law and Divorce Law Attorney Bertus Preller

Bertus Preller  a Family, Divorce Law Attorney, Mediator at Abrahams and Gross in Cape Town, is now consulting on a weekly basis in Sandton Johannesburg. He has nearly 25 years of experience as an attorney and specializes in Family Law and Divorce Law cases across South Africa. Bertus is the author of Everyone’s Guide to Divorce and Separation, published by Random House. He has also been quoted on Family Law issues in various newspapers such as the Sunday Times and Business Times and magazines such as Noseweek, Keur, Living and Loving, Longevity, Woman and Home, Women’s Health, You, Huisgenoot and Fairlady and also appeared on the SABC television show, 3 Talk, Morning Live and on the 5FM Breakfast show with Gareth Cliff. His clients include artists, celebrities, sports people and high net worth individuals.

His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, child abduction and Hague Convention cases and domestic violence matters and international divorce law. He will consult in Sandton every Wednesday.

 

To contact Bertus for an appointment:

+27 21 422 1323
+27 83 443 9838

Abrahams and Gross Inc.
1st Floor, 56 Shortmarket Street
Cape Town, 8000

info@divorceattorney.co.za

Web: http://www.divorceattorney.co.za

Twitter: @bertuspreller

Protecting Your Assets in a Divorce


The news of Kim Kardashian divorcing her husband after 72 days of marriage, highlights why it is important for business owners to make sure that their marital regime is governed in terms of an Antenuptial contract .  An  Antenuptial contract is the most cost-efficient and reliable pre-marital contract that can protect business assets in the unlikely event of a divorce.  An Antenuptial contract is a pre-marital contract between two parties entering into a marriage which regulates what happens to a spouse’s assets at the time of a divorce.  It sets forth how marital property will be divided in the event of a divorce.

A well drafted Antenuptial contract can save you time and money on litigation costs during a divorce and prevent a battle over the ownership of a business and other assets.  The more issues covered in the Antenuptial contract, means one less issue to litigate over during a divorce.  Therefore, it is a prudent investment to make prior to getting married.  One of the most important provisions a business owner can have in a Antenuptial contract is a provision addressing the appreciation of individual pre-marital assets (assets you possess prior to entering the marriage).

For example, let’s say your business, an asset, is worth R 6 million prior to getting married.  At the end of your divorce, your asset is worth R 12 million.  Your spouse could be entitled to half or more of the R 12 million appreciation during the marriage.  However, if you have a valid and enforceable Antenuptial contract whereby you and your partner agree that pre-marital property and any growth thereon is excluded at the start of the marriage, then such assets will not be taken into account for purposes of an accrual.

Marrying in terms of an Antenuptial contract (out of community of property) can also help limit your liability for your future spouse’s debts and prevent you from inheriting this debt during the marriage and divorce.  Remember, creditors can go after marital property- i.e., your business if you are married in community of property.

Antenuptial contracts may be unenforceable if certain formalities are not followed. A common attack to a Antenuptial contract is if both spouses were represented by the same attorney or one spouse was forced into the contract and did not really know what the consequences are. It is critical for you and your spouse to have separate attorneys who are independent of one another during the drafting and negotiation of the Antenuptial contract or at least, if you do go to one attorney, make sure that the attorney explains the pro’s and con’s and give the other spouse and option to discuss the agreement with another attorney.

An Antenuptial contract or pre-nuptial agreement must be entered into before marriage through a notary public, if not the marital regime by default will be that you are married in community of property. To change your marital regime later after divorce is costly and can only be accomplished by way of a court application in the High Court.

Another requirement for a valid and enforceable Antenuptial contract agreement includes the use of clear language in the agreement and terms that are fair. It is important both you and your future spouse have sufficient time to review, negotiate and execute the Antenuptial contract.  You and your future spouse want to avoid reviewing and signing the Antenuptial contract six hours before the wedding and while under duress.  Therefore, you should both have sufficient time to review the Antenuptial contract and formally execute it.  By undertaking these measures, you can protect your business and assets with a valid and enforceable Antenuptial contract.

Antenuptial Contracts – The most important contract in your lifetime


The Antenuptial or Prenuptial Contract is certainly one of the most important documents that any person will sign in his/her lifetime, well that is if you decide to tie the knot and get married.  Antenuptial agreements are often seen as a cold, harsh and unromantic sign that one’s partner is planning on the relationship ending in doom. Some people have no issues with them and see them as valuable protection for both parties while others might go as far as to call of their wedding if the idea surfaces.

A major problem however is that people somehow disregard the importance of the Antenuptial Contract and many embark on a marriage without due cognisance of the repercussions that might follow at a later stage, especially when the marriage end in the big D – divorce. Somehow many people merely see the Antenuptial Contract as a formality, something that needs to be signed prior to the wedding day, without realising the consequences of such an important legal instrument. The problem is that the Bride and Groom, concentrates more on the wedding ceremony, the dress, the honeymoon etc. and leaves the Antenuptial contract for that late minute meeting with an attorney just before the wedding day.

No one goes into a marriage contemplating a divorce but when you consider that the Antenuptial Contract governs what will happen to your assets and liabilities on divorce or death, it makes lots of sense that considerable thought should be given to concluding it and that its contents should be fully understood by all parties concerned. Unfortunately many people are more drawn into the eyes of their spouse prior to the marriage than to the importance of the wording of a proper Antenuptial Contract.

Marriage in Community of Property

Where you did not conclude an Ante nuptial Contract prior to your wedding day, you will automatically marry in community of property. ‘In community of property’ means that everything the couple own, and their debts, from before their marriage are put together in a joint estate. And everything they earn or buy after their marriage is also part of this joint estate. Any money or possessions belonging to either of the spouses at the time of the marriage, or acquired by them at any time thereafter, cease to be the private property of the one person and become part of a joint estate in which each of the partners has an equal, undivided share.

On termination of the marriage, the husband and wife are each entitled to a half-share of the joint estate and they are jointly liable for any liabilities. A major disadvantage is that if one partner becomes insolvent, the other is protected only if he or she owns property that does not form part of the joint estate. Everything in the joint estate will be attached and sold off to pay any creditors.

Marriage out of Community of Property

Each spouse retains his or her own assets and liabilities whether acquired before or during marriage. There is no sharing of profits and losses. Both spouses have full and independent contractual capacity. Upon death or divorce, each spouse keeps control over their own assets.

This clearly gives parties absolute independence of contractual capacity and protects the estates of each party against claims by the other party’s creditors. There is no provision for any sharing whatsoever.  A party who contributed to the other party’s estate whether in cash or otherwise would have a heavy onus to prove that he or she was entitled to anything from that party’s estate on dissolution of the marriage.

Where one party stays at home to raise children and does not contribute financially towards the marriage and the other spouse works and accumulates assets, the former may find herself with nothing and no claim to the assets of the latter.

The marriage is governed by a contract known as an ante nuptial contract which is concluded by the parties before the marriage. If the marriage occurred after 1 November 1984, the contract had to specifically exclude the system of accrual. In the absence of this exclusion the rules of accrual will automatically apply.

Marriage out of Community of Property with Inclusion of the Accrual System

In most cases the accrual system is, perhaps, the fairest marriage system for the majority of couples. Before the introduction of the accrual system in 1984, if prospective spouses chose to be married out of community of property, there was no form of sharing between them of what was built up during the marriage. The accrual system was introduced to remedy this.

The Matrimonial Property Act 88 of 1984 brought with it the “accrual” system which permits a form of sharing, consistent with a primary objective of marriage, but permitting retention of each party’s independence of contract and ability to retain their own unique separate estates.

“Accrual” means increase. The accrual system is a form of sharing of the assets that are built up during the marriage. The underlying philosophy in respect of the accrual system is that each party is entitled to take out the asset value that he or she brought into the marriage, and then they share what they have built up together. One spouse’s property cannot be sold to pay the other’s creditors if the other becomes insolvent – in contrast to the case where the parties are married in community of property.

It is of utmost importance that a party wishing to enter into an Ante Nuptial Contract must fully understand what it is they are signing. It is for this reason that a standard form contract cannot be used, that consultations cannot be held over the phone or by means of email and that, unfortunately.

The important features of an accrual marriage are in essence the following:

  • Each party retains his or her own estate. Each party may accumulate assets and incur liabilities without interference from or assistance of the other spouse.  The estate of each party is determinable separately.
  • The monetary value of the smaller estate is subtracted from the monetary value of the larger estate, the difference is split, and the party having the larger estate pays half of the difference between the two estates to the party with the smaller estate.
  • At dissolution of the marriage, the estate of each party is calculated by listing all assets, listing all liabilities, subtracting liabilities from assets and arriving at a net asset value.
  • In practical terms this amounts to a similar division to a marriage in community of property.  However there are certain crucial factors of an accrual marriage which add complexity and much more freedom of choice. When drafting the Ante Nuptial Contract, the parties can each decide to exclude certain assets.  The effect of excluding an asset will be that it does not feature on the asset statement at dissolution of the marriage and is completely excluded from the calculation. Assets which are not properly described can cause huge problems when the executor or the divorce attorney tries to decide what to do with it in calculating the net accrual value.
  • To exclude either a specific asset, or a commencement value, or both (which must be separate and not derived from the same asset), can effectively ensure that couples share only what they choose to share and keep separate any item or items, or values, which they do not believe it fair to share (for example something acquired before the relationship commenced).Parties not wishing to exclude specific assets may exclude a certain sum of money which is the agreed equivalent of assets which they do not wish to share, and which is termed a “commencement value”.

Excluded from the Accrual

Certain property belonging to either the husband or the wife may not be taken into account when the accruals are worked out:

  • Any damages awarded to either spouse for defamation or for pain and suffering;Any inheritances, legacies or gifts that either spouse has received during the marriage, unless the parties have agreed in their antenuptial contract to include these or the donor has stipulated their inclusion;
  • A donation made by one spouse to the other. This is not taken into account as part of either the giver’s or the receiver’s estate, with the result that the giver cannot recover part of what he or she gave and the receiver need not return any of it.

Calculating the Accrual

The accrual is calculated by subtracting the net asset value of his/her estate at the commencement of marriage from the net asset value of his/her estate at dissolution of the marriage.

Example:

If spouse C had a net asset value of R10 000.00 at the commencement of the marriage (his/her “initial value”) and a net asset value of R100 000.00 at dissolution of marriage (his/her “end value”) then the accrual to his/her estate is R90 000.00. If the initial value of the other spouse B was R20 000.00 and hi/her end value R200 000.00, it follows that the accrual to his/her estate is R180 000.00.

Net accrual is calculated by subtracting the “smaller” accrual from the “larger” accrual. In the above example: R180 000-00 – R90 000-00 = R90 000-00. In accordance with the Act, C (the spouse with the smaller accrual) acquires a claim against B (the spouse with the larger accrual) for one half of the net accrual, namely – R45 000.00.

If you do intend to get married, it is well worth your while to consult a reputable attorney, to discuss your particular requirements and ensure that you fully understand the application of the accrual system to your particular situation.

Conclusion

An Ante Nuptial Contract must be signed before the marriage and must be signed in the presence of a notary and two competent witnesses. The notary will then register the contract in the local registry of deeds.  If parties wish to conclude an Ante Nuptial Contract after their marriage it is necessary to launch an application to the High Court.

About the Author

Bertus Preller is a Divorce Attorney in Cape Town and has more than 20 years experience in most sectors of the law and 13 years as a practicing attorney. He specializes in Family law and Divorce Law at Abrahams and Gross Attorneys Inc. in Cape Town. Bertus is also the Family Law expert on Health24.com and on the expert panel of Law24.com and is frequently quoted on Family Law issues in newspapers such as the Sunday Times and Business Times and magazines such as Noseweek, You and Huisgenoot. His clients include artists, celebrities, sports people and high networth individuals. His areas of expertise are Divorce Law, Family Law, Divorce Mediation, Parenting Plans, Parental Responsibilities and Rights, Custody (care and contact) of children, same sex marriages, unmarried fathers rights, domestic violence matters, international divorce law, digital rights, media law and criminal law.

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