When planning one’s estate, it is important to take into account the legal effects of your marriage. If this is overlooked the consequences can be disastrous.
There are, broadly speaking, two forms of marriage in South Africa – in community of property and out of community of property. If a couple get married without entering into an ante-nuptial contract, the marriage will be in community of property. If an ante-nuptial contract is entered into, the marriage will be out of community of property and the ante-nuptial contract must state whether the accrual system will apply to the marriage or not.
Let’s briefly discuss each marital system and how it will affect your estate. In a marriage out of community of property, not subject to the accrual system, each spouse has a separate estate; in other words, what is yours is yours and mine is mine. The spouses are jointly responsible for household necessities during the marriage. On death, because our law prescribes freedom of testation, each spouse can leave his or her estate to the heirs they choose. However, a surviving spouse may have a claim for maintenance against the deceased spouse in terms of The Maintenance of Surviving Spouses Act of 1990 (this applies to all marriages). Therefore, when planning the estate of a person upon whom a spouse is reliant for maintenance, provision should be made for such maintenance to avoid unpleasant litigation if this is not done.
In a marriage out of community of property subject to the accrual system the spouse whose estate has grown less than that of the other spouse has a claim against the other spouse, or the spouse’s estate, as the case may be, for one-half of the difference in the growth of the respective estates. Inflation must be taken into account in doing the calculation. Planning for a potential accrual claim is important, especially when the spouse’s assets are largely illiquid. For instance, if the one spouse owns a farm and not sufficient other assets to cover an accrual claim, it may be necessary for the farm to be sold which could well be highly undesirable. A life policy to provide the necessary liquidity may provide a solution.
In a marriage in community of property, each spouse owns an undivided one-half share of the joint estate. An exception to this is an asset or assets inherited by a spouse subject to the stipulation that the inherited assets will be excluded from the legal effects of the heir’s marriage. Each spouse can bequeath his or her estate as he or she chooses but, once again, a possible claim for maintenance in terms of The Maintenance of Surviving Spouses Act should be kept in mind.
In our experience problems often arise when one or both spouses have been married before and have children from the previous marriage. In these situations, a carefully prepared estate plan is essential.
