What happens to my property in the event of my relationship souring and we end up in divorce?
The first thing to actually consider is, are you an owner of the property? If you're married in community of property, which is a default way of getting married, there are no agreements. Basically, the point is that you just get married. Effectively, you and your spouse each own half of the property, and the property will always be registered in both of your names.
In the event of divorce with this type of marriage regime, you own half of the property. Upon your divorce, you're entitled to 50% of the property or the mid-proceeds of the property if it's going to be sold.
In the event that you're married with an ante-nuptial contract, that means what's yours is yours, what is your spouse's is your spouse's. And if you're married ANC with accrual, what accrues during the course of the marriage is going to be split equally, other than assets that are particularly excluded in your ante-nuptial contract. So time to go and scratch that document out and see what it says. But pretty much if you're ANC with no accrual, it means whatever is your spouses is your spouse's.
They're entitled to the property if it's registered in their name. So be cautious in the event that you are living in a property or you presume you have title to a property, your divorce may result in you being evicted in the event of the separation. Alternatively, the property may be sold and you will not get any of the proceeds. To ensure you understand what your rights are, relative to this property that you live in with your spouse. To ensure that in the event of divorce, you know exactly what's going to transpire.
Of course, that's what would happen in the normal course. In many divorces, there are settlement agreements. And even though you may not be the owner of the property, you may find that you are going to actually be getting the property or taking transfer of that property through a settlement agreement in the event of divorce. But that could be after a lot of acrimonious hostile boxing with your attorneys in the high courts. So before you go down that road, make sure you know exactly where you are in terms of ownership.
If you made an ANC with accrual, again, you are not in a position where you automatically are the co-owner of the property. So if your spouse has acquired the property in their name, it may only entitle you to half of the growth. So the ANC with the accrual system pretty much works like this. On the death or the divorce of the parties, the accrual kicks in and the party whose estate has increased by more than the other must give the other 50%.
So taking the property in isolation, if you bought for X grand and it's appreciated to Y grand, you're entitled to the differential of the net proceeds. But of course, there are issues like mortgages to consider, is it the right time to sell, there could be capital gains taxes.
ANC with accrual, you're not automatically entitled to 50%. So, make sure that you are fully cognisant of the ownership aspect if you want to ensure your rights on the property are secured.