Couples should consider the financial consequences of their marriage on their assets.
With Valentine’s Day just around the corner, it is safe to say that the month of February will as usual be filled with weddings. Two people coming together for a lifelong of bliss together. But how often do the couple properly consider the financial consequences of their marriage on their bank accounts and on properties they may own, whether their marriage endures or in the event of death or divorce.
While the hospitality, entertainment and other industries across South Africa gear themselves up for the big day and month, couples taking the big plunge are faced with the question of which matrimonial regime to select to govern the financial consequences of their marriage.
Alan Levy of Alan Levy Attorneys Notaries and Conveyancers has been consulting with couples about to get married for almost 20 years, all this while running a thriving Property Law practice in Sandton. He had this to say,
“In today’s fast moving and stressed filled times and with divorce, on the rampant rise it is important for a couple to properly consider their financial position, to take stock of their assets and properties owned by them and to obtain experienced advice, in considering which matrimonial regime is best suited to their circumstances”
Since the introduction of the Matrimonial Property Act in 1984, three property matrimonial regimes are available to soon to be newlyweds, each having certain consequences for the couple, whether in respect of each other or creditors or whether in respect of certain situations which may arise.
In community of property
This means that the assets and liabilities of the couple are merged on marriage and on death or divorce are divided equally between the parties.
Out of Community of Property
This means that the parties assets and liabilities are kept separate and on death or divorce each one retains what is theirs.
Out of Community of Property - with the Accrual System
This means that the parties each keep their assets and liabilities separate from one another during their lives. On death or divorce, the spouse who accrues the lesser growth in financial worth during the course of the marriage gets a claim against the spouse who accrues the greater worth, for half of the difference of the accrual of their estates.
If you are newlyweds taking the big step this month then the advice to you would be to consider all your options and make an informed decision. Alan Levy adds
“While most couples choose their marriage to be out of community of property with the accrual system, in certain circumstances this is not the best approach to follow. Seek advice from an experienced attorney, be thorough and protect yourselves from early on!”