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Changing Your Matrimonial Regime to Out of Community of Property
Couples sometimes rush into marriage and before they realize it, they are bound by South Africa’s default marital regime, which is that of In Community of Property. This means that one joint estate belongs to both spouses in equal undivided shares. This is usually because many people are unaware of the different matrimonial property regimes that are available, nor do they understand the legal consequences thereof. The type of marriage you have; either in community of property or out of community of property, with or without accrual, is what will be referred to as your marital regime.
It may be only after the conclusion of the marriage that they become aware of their options and would then want to change their marital regime. Section 21 of the Matrimonial Property Act, 88 of 1984 (MPA) allows couples to make a joint application to a High Court requesting to change their matrimonial property regime if certain requirements are met.
Requirements The decision in the Lourens et Uxor 1986 (2) SA 291 (C) case confirmed the guiding principles that the court follow regarding applications in terms of section 21(1) of the Matrimonial Property Act, 88 of 1984.
For the parties to change their matrimonial property system, the Act mentions the following requirements and as laid out by the case as well:
Notice of the applications must be given to the Registrar of Deeds in terms of s 97 (1) of the Deeds Registries Act 47 of 1937.
The draft notarial contract which it is proposed to register must be annexed to the application.
Notice of intention to make the application must also be published in the Government Gazette and one English and one Afrikaans newspaper at least two weeks before the date on which the application will be heard.
The date upon which the application will be heard must be specified in the published notice, setting out what steps an objector to the order sought must take and where the application and draft contract can be inspected.
In addition, at least two weeks' prior notice of the application must be given by certified post to all creditors, whether actual or contingent. A list of such creditors, verified by affidavit, shall be included in the application and proof that such notice has been given to them must be provided by an affidavit to which are annexed the relevant certificates of posting.
Sufficient information regarding the assets and liabilities of the couple concerned must be set out in the application to enable the Court to judge whether there are sound reasons for the proposed change and whether any other person will be prejudiced by the proposed change.
It should also be stated whether either of the applicants has been sequestrated in the past and, if so, when, and in what circumstances. The case number of any rehabilitation application must be furnished.
It should also be stated whether there are any pending legal proceedings in which any creditor is seeking to recover payment of any alleged debt due by the couple or either of them.
Care must be taken to motivate fully the proposed change in the existing matrimonial property system. Applicants must explain why no other person will be prejudiced by the proposed change. In any event, the order sought, and the contract which it is proposed to register, shall contain a provision which preserves the rights of pre-existing creditors.
The application must disclose where the parties are domiciled and, if they are not resident there when the application is made, where they are resident. If there has been a recent change in domicile or residence it should be disclosed so that the court can consider whether the application has been brought in the appropriate forum and/or whether additional notice of the application should be given.
The court where the application is brought (the High Court) must be satisfied that no other person will be prejudiced by the future change. The court must be satisfied that the rights of creditors of the parties must be preserved in the planned contract so the application must contain adequate information about the parties’ assets and liabilities to allow the court to determine whether there are good reasons for the intended change and whether any other person will be prejudiced by such amendment.
When the court is satisfied that the requirements have been met, it will order that the existing matrimonial property regime no longer applies to the marriage and authorize the couple to enter an ANC by which their future matrimonial property regime will be regulated.
Couples intending to get married in South Africa have an option of choosing the matrimonial property regime that they wish to govern their marriage. The matrimonial property regime of a married couple will have an effect of how the couple may contract with third parties and it can also influence how each couple’s property will be distributed at the end of the marriage either through divorce or death.
The default matrimonial system in South Africa is in-community of property. If couples do not want their matrimonial property regime to be in-community of property, the couple will have to conclude an antenuptial contract (ANC) before the conclusion of their marriage stating that they want their matrimonial property regime to be out of community of property with accrual or out of community of property excluding accrual.
This application is usually long and expensive. It is advised that couples obtain legal advice from family law attorneys like Rudolf Buys & Associates Attorneys before the solemnization of their marriage.
Can couples change their marital property regime without going to court?
In AM v HM [2020] ZACC 9, the courts had to briefly consider the question of whether parties could change their marital property regime without following the processes set out in section 21 of the MPA.
The facts of the case were that Mrs. AM (Applicant) and Mr. HM (Respondent) had been married out of community of property with the exclusion of accrual in 1993. The ANC was duly registered in terms of the MPA. In 2014, the Applicant drafted a document that purported to be a postnuptial agreement. In terms of this agreement, the Applicant would be entitled to half of the Respondent’s estate and that the Respondent would pay for her maintenance. The Applicant had on numerous occasions asked the Respondent to sign the document, however the Respondent refused to do so. The Respondent finally signed the document on the evening of 10 November 2014 after an argument between the Applicant and the Respondent had allegedly escalated into aggression.
At the end of November, it came to the Applicant’s attention that the Respondent was engaged in an extramarital affair and that the Respondent had approached an attorney for the purposes of instituting divorce proceedings. In court, Mrs. AM contended that the agreement concluded between herself and the Respondent was valid and that it constituted an amendment to their antenuptial agreement or that it was an agreement concluded in contemplation of divorce as contemplated in section 7(1) of the Divorce Act, 70 of 1979 (Divorce Act). The Supreme Court of Appeal (SCA) accepted that the parties had concluded a valid agreement, however, the SCA held that since the parties had not approached a court in terms of section 21(1) of the MPA to sanction a change of the antenuptial contract, the central issue that had to be determined was whether the agreement was made in contemplation of a divorce. The SCA held that the agreement was not made in contemplation of a divorce because divorce had not been discussed by the parties when the document had been signed. The Applicant’s appeal was dismissed.
Leave to appeal to the Constitutional Court was granted to the Applicant. In the Constitutional Court the Applicant submitted that the SCA’s interpretation of section 21(1) of the MPA militates against married couples’ contractual freedom and allegedly infringes upon their constitutional rights to freedom, dignity, and non-discrimination. The Constitutional Court found that the Applicant’s attack on the judgment of the SCA was misplaced in that a proper interpretation and analysis of the judgment reveals that the SCA did not prescribe a bar on all agreements between spouses married out of community of property. The finding by the SCA only related to the Applicant’s and the Respondent’s agreement, whose terms appeared to have the effect of changing the parties’ matrimonial regime without being sanctioned by a court order. It did not affect the parties’ capacity to contract in respect of other agreements. Based on this and other reasons, the appeal was dismissed.
The above highlights the fact that proper process needs to be followed by parties should they want to change their marital property regime. Married couples who would like to change their marital property regime should follow due process and apply to a court to change their marital property regime. Spence Attorneys can assist with preparing antenuptial agreements, as well as postnuptial agreements through an application to High Court.
Documents needed:
In order for us to prepare your documentation, the initial documents and information that we will require includes the following:
copies of identity documents or passports for both the parties;
copy of marriage certificate;
the reason an antenuptial contract was not registered prior to your marriage;
the reasons that you wish to now execute a postnuptial contract;
copies of proof of address for both the parties;
income tax numbers for both parties (if applicable);
occupations / job descriptions for both parties;
the full names and date of birth of your children (if applicable);
the full particulars of assets that both of you currently own (including movables, immovables, investments, and cash); and
full details of all existing creditors (together with supporting documentation such as most recent statements, etc.)
As is evident from the above-mentioned it is possible to change your matrimonial property regime after you have entered the marriage.
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