Marriage and Matrimonial Property

 

 

Yes, absolutely. South African law allows couples to change their regime through a High Court application and postnuptial contract without dissolving the marriage.
 

A change can significantly impact how assets are distributed upon death. If you change your regime, it's crucial to update your will and review your estate planning documents to reflect the new ownership structure.

Typically, the process takes 2 to 3 months, depending on court availability and if there are no objections.

Common reasons include marrying without an ANC, starting a business, wanting to protect personal assets, or significant changes in financial circumstances.

If a creditor or other interested party objects, the process will become more complex, time-consuming, and expensive, potentially requiring further legal arguments in court. It is crucial to disclose all relevant facts upfront to your legal team to minimize this risk.

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Matrimonial Regime Changes 

Changing Your Marital Regime in South Africa

Understanding Your Options How to Change Your Matrimonial Property Regime

In South Africa, your matrimonial property regime dictates how your assets and liabilities are owned and managed within your marriage. If you married without an antenuptial contract (ANC), you are, by default, married in community of property. However, circumstances change, and you may find that your current regime no longer suits your financial goals or needs. The good news is that South African law, specifically Section 21(1) of the Matrimonial Property Act 88 of 1984, allows married couples to change their matrimonial property regime through a High Court application and the registration of a notarial postnuptial contract.

Understanding South Africa's Marital Regimes

Before considering a change, it's essential to understand the three primary marital regimes in South Africa:

  • In Community of Property This is the default. Both spouses equally share all assets and debts, regardless of who acquired them, both before and during the marriage. This means a joint estate is formed.
  • Out of Community of Property with Accrual System Each spouse retains ownership of their assets and liabilities acquired before or during the marriage. However, any growth in the value of each spouse's separate estate during the marriage (the "accrual") is divided equally upon dissolution of the marriage (divorce or death).
  • Out of Community of Property without Accrual System Similar to the accrual system, each spouse keeps their separate assets and liabilities acquired before or during the marriage. Crucially, there is no sharing of growth (accrual) upon dissolution; each spouse retains their entire respective estate.

Why Change Your Matrimonial Property Regime?

Couples opt to change their marital regime for various reasons, often realizing the implications of their default "in community of property" status only after marriage. Common reasons include:

  • No ANC was concluded The couple married without an ANC and now wishes to move to an "out of community of property" regime.
  • Emerging Business Interests One or both spouses develop independent business ventures and seek to protect these interests from the other spouse's liabilities.
  • Protection of Assets Desire to shield individual assets from potential creditors or liabilities of the other spouse.
  • Changed Financial Circumstances Significant life events like inheritances, business success, or career advancements may necessitate a change.
  • Mutual Agreement and Benefit Both spouses mutually agree that a different regime would better serve their joint financial planning and benefit both parties.
  • Correction of an Oversight If the couple intended to marry under a different regime but failed to execute an ANC due to lack of knowledge or oversight.
  • Alignment with Current Needs The current regime no longer aligns with their present circumstances, needs, or long-term financial goals.

The Process of Changing Your Marital Regime

Changing your matrimonial property regime is a formal legal process that requires High Court approval. Here's a general overview of the steps involved:

  • Mutual Agreement: Both spouses must mutually agree to the proposed new matrimonial property regime.
  • High Court Application: A formal application is made to the High Court for permission to change the matrimonial property system.
  • Notification of Interested Parties:
    • Notice of the application must be published in the Government Gazette and two local newspapers at least two weeks before the hearing.
    • The Registrar of Deeds must be notified.
    • All known creditors must be given notice via certified mail and granted the right to object to the proposed change.
  • Drafting the Postnuptial Contract: A draft notarial contract (postnuptial agreement) outlining the new matrimonial property system must be prepared and included in the application. This contract must clearly state that the change will not prejudice any creditors.
  • Court Scrutiny and Order: The High Court will scrutinize the reasons provided for the change and ensure that all conditions are met, particularly that the change will not prejudice any creditors or other interested parties. If satisfied, the Court will grant an order authorizing the parties to enter into the notarial contract.
  • Notarization and Registration: After receiving High Court approval, the spouses must sign the notarial postnuptial contract, and it must be registered with the Deeds Office. This registration is crucial for the change to become legally binding and publicly recorded. This typically needs to occur within three months of the court order.

Timeline and Costs

The process of changing your marital regime can take approximately 2 to 3 months, depending on High Court availability and the absence of any objections.

The costs involved are higher than drafting an ANC due to the necessity of a High Court application. These costs include legal fees, fees for notifying the Registrar of Deeds, and the publication of notices in newspapers and the Government Gazette. The estimated cost assumes no interested parties will object to the application. If the application is opposed, the process can become significantly more time-consuming and expensive.

Documentation Required

To initiate the process, you will typically need the following documents and information:

  • Copies of identification documents or passports for both parties.
  • Copy of your marriage certificate.
  • Detailed reasons why an antenuptial contract was not registered before the marriage.
  • Detailed reasons for wanting to execute a postnuptial contract now.
  • Copies of proof of address for both parties.
  • Income tax numbers and occupations for both parties (if applicable).

What Happens if You Were Unaware of Your Regime?

It's common for couples to seek a change due to a misunderstanding of their initial marital property regime. Whether you were unaware of being married in community of property or mistakenly believed you were married out of community of property, Section 21 allows you to rectify this through the postnuptial agreement process.

Is Your Marital Regime Still Right For You? Understanding How to Change It

Changing your matrimonial property regime is a significant decision that allows couples to align their financial structure with their evolving needs. This process requires mutual agreement, High Court approval, and formal registration with the Deeds Office. Understanding the legal requirements and seeking expert legal counsel is crucial to ensure the process is handled correctly, safeguarding both parties' rights and interests. Contact us for a consultation.