How is a deceased’s estate administered?

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A2BThe administering of a deceased estate is regulated by the Administration of Estates Act No 66 of 1965 (as amended) and divided according to a valid will or the Intestate Succession Act No 81 of 1987 (as amended) or a combination of both acts.

Various other acts and regulations may, however, also be applicable, like those applicable to income tax (with due allowance for VAT and CGT), Estate duty and Donations tax, and support of surviving spouse.

After a death

When someone dies, his/her estate must be reported to the Master of the High Court as soon as possible, and certain report documents, together with the original will, where applicable, should be delivered to the Master.

In the case of estates with a gross value of less than R250 000 the Master may dispense with an official appointment of an Executor to execute the required administering process. In all other cases, an Executor will be appointed by the Master, who will issue an Executor’s letter to the appointed Executor.

The Executor

As soon as the Executor’s letter has been issued the formal administering of the estate, which the Executor has to follow, will commence. One of the Executor’s first tasks would be to announce to the creditors, acquire details regarding estate assets and have it valued if necessary, and recover certain assets. Known and filed liabilities should be investigated and attention must be paid to income tax.

The Executor is now compelled to submit a liquidation and distribution account (statement of assets and liabilities) to the Master of the High Court within six months after being issued with the Executor’s letter, or ask for a formal postponement. This estate account will indicate all assets and liabilities, distribution of heirs and details of assets outside the estate which are directly payable to beneficiaries.

The Master will check the estate account and then issue a questionnaire to the Executor. As soon as the Master has granted approval the Executor may proceed to announce the account as being open for inspection for 21 days at the Master and the nearest Magistrate’s Office.

Should any written challenges be submitted, it should be dealt with according to the regulations in the Administration of Estates Act. Should there be no challenges, or when the Executor has disposed of all challenges, the Executor may proceed to make payments to heirs and carry over any other assets to the beneficiaries.

Administering obstacles

In most cases the administering process should not be complicated, therefore it would be possible to finalise within a fair period of time (approximately six to nine months). There are, however, many obstacles which may slow down this process and even bring the administering process to a virtual standstill. Some of the most well-known and general obstacles are poor service from government and private institutions, invalid and unpractical wills, shortage of cash, quarrels and disputes among family members and beneficiaries, lack of information, disorder in the tax and other affairs of the deceased, lawsuits before and after death, and legal post-mortems in case of an unnatural death, which may sometimes be required before policies can be paid out.

Conclusion

The administering of an estate is a specialised environment which should be left to capable people with knowledge of the Administration of Estates Act and years of experience. Ignorance regarding the run of events as well as errors of judgement may eventually cost you dearly if you don’t make use of the available expertise.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Implications of estate duty

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Estate duty is charged on the dutiable value of the estate in terms of the Estate Duty Act. The general rule is that if the taxpayer is ordinarily resident in South Africa at the time of death, all of his/her assets (including deemed property), wherever they are situated, will be included in the gross value of his/her estate for the determination of duty payable thereon.

The current estate duty rate is 20% of the dutiable value of the estate. Foreigners/non-residents also pay estate duty on their South African property.

To minimise the effects of estate duty you need to understand the calculation thereof. The following provisions apply in determining your liability:

  • Which property is to be included.
  • Which property constitutes “deemed property”.
  • Allowable deductions: the possible deductions that are allowed when calculating estate duty.

Property includes all property, or any right to property, including immovable or movable, corporeal or incorporeal – registered in the deceased’s name at the time of his/her death. It also includes certain types of annuities, and options to purchase land or shares, goodwill, and intellectual property.

Deemed property

Insurance policies

  • Includes proceeds of domestic insurance policies (payable in South Africa in South African currency [ZAR]), taken out on the life of the deceased, irrespective of who the owner (beneficiary) is.
  • The proceeds of such a policy are subject to estate duty, however this can be reduced by the amount of the premiums, plus interest at 6% per annum, to the extent that the premiums were paid by a third person (the beneficiary) entitled to the proceeds of the policy. Premiums paid by the deceased himself/herself are not deductible from the proceeds for estate duty purposes.
  • If the proceeds of a policy are payable to the surviving spouse or a child of the deceased in terms of a properly registered antenuptial contract (i.e. registered with the Deeds Office) the policy will be totally exempt from estate duty.
  • Where a policy is taken out on each other’s lives by business partners, and certain criteria are met, the proceeds are exempt from estate duty.

Donations at date of death

Donations where the donee will not benefit until the death of the donor and where the donation only materialises if the donor dies, are not subject to donations tax. These have to be included as an asset in the deceased estate and are subject to estate duty.

Claims in terms of the Matrimonial Property Act (accrual claim)

An accrual claim that the estate of a deceased has against the surviving spouse is property deemed to be property in the deceased estate.

Property that the deceased was competent to dispose of immediately prior to his/her death (Section 3(3)(d) of the Estate Duty Act), like donating an asset to a trust, may be included as deemed property.

Deductions

Some of the most important allowable deductions are:

  • The cost of funeral, tombstone and deathbed expenses.
  • Debts due at date of death to persons who have their ordinary residence in South Africa.
  • The extent to which these debts are to be settled from property included in the estate. This includes the deceased’s income tax liability (which includes capital gains tax) for the period up to the date of death.

Foreign assets and rights: 

  • The general rule is that foreign assets and rights of a South African resident, wherever situated, are included in his/her estate as assets.
  • However, the value thereof can be deducted for estate duty purposes where such foreign property was acquired before the deceased became ordinarily resident in South Africa for the first time, or was acquired by way of donation or inheritance from a non-resident, after the donee became ordinarily resident in South Africa for the first time (provided that the donor or testator was not ordinarily resident in South Africa at the time of the donation or death). The amount of any profits or proceeds of any such property is also deductible.

Debts and liabilities due to non-residents: 

  • Debts and liabilities due to non-residents are deductible but only to the extent that such debts exceed the value of the deceased’s assets situated outside South Africa which have not been included in the dutiable estate.

Bequests to certain public benefit organisations:

  • Where property is bequeathed to a public benefit organisation or public welfare organisation which is exempt from income tax, or to the State or any local authority within South Africa, the value of such property will be able to be deducted for estate duty purposes.

Property accruing to a surviving spouse [Section 4(q)]:

  • This includes that much of the value of any property included in the estate that has not already been allowed as a deduction and accrues to a surviving spouse.
  • Note that proceeds of a policy payable to the surviving spouse are required to be included in the estate for estate duty purposes (as deemed property), but that this is deductible in terms of Section 4(q).
  • Section 4(q) deductions will not be granted where the property inherited is subject to a bequest price.
  • Section 4(q) deductions will not be granted where the bequest is to a trust established by the deceased for the benefit of the surviving spouse, if the trustee(s) has/have discretion to allocate such property or any income out of it to any person other than the surviving spouse (a discretionary trust). Where the trustee(s) has/have no discretion as regards both the income and capital of the trust, the Section 4(q) deduction may be granted (a vested trust).

Portable R3.5 million deduction between spouses

The Act allows for the R3.5 million deduction from estate duty to roll over from the deceased to a surviving spouse so that the surviving spouse can use a R7 million deduction amount on his/her death.

Life assurance for estate duty

Estate duty will also normally be leviable on these assurance proceeds.

Reference:

  • Source: Moore Stephens’ Estate Planning Guide.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Why is an independent trustee important?

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cm_11_a1A well-known court case, Land Bank of South Africa vs JL Parker and Two Others (the Parker case) irrevocably changed the requirements for independent trustees to be appointed and placed renewed focus on the duties and responsibilities of all trustees.

What is an independent trustee?
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As a result of the Parker case, most Masters of the High Court now require an independent trustee to be appointed in addition to the trustees who are beneficiaries of the trust, and therefore, will not issue a Letter of Appointment without at least one independent trustee being appointed. An independent trustee will be a person who is not related to the founder, the other trustees or the beneficiaries.

This independent trustee does not necessarily have to be a professional person but it must be someone who fully realises the responsibilities he or she is accepting when agreeing to act as a trustee. They should also be qualified in the view of the Master of the High Court to act as a trustee.

Responsibilities

All trustees (independent or not) are charged with the responsibility to ensure that the trust functions properly to the greatest benefit of the beneficiaries. These responsibilities include, but are not limited to:

1. ensuring compliance with the provisions of the trust deed;
2. ensuring compliance with all statutory requirements;
3. conducting of proper trustee meetings;
4. recording of proper minutes of all meetings and decisions by the trustees;
5. proper maintenance and safekeeping of minute books.

It is clear that a person who is appointed as an independent trustee must have the necessary experience and expertise to properly execute these duties as well as to add value to the trust. In many cases, the trustees who are not independent do not have sufficient knowledge of and experience in the proper administration of trusts. Furthermore, they might also lack expertise in utilising the vehicle of the trust in order to maximise the benefit for the beneficiaries.

The expertise includes negotiating and entering into business contracts, holistic tax and succession planning, and ensuring the optimal growth of the trust assets. It is in the best interest of the trust that this person also has sufficient knowledge of the impact of statutory requirements, such as compliance with relevant tax law and the effect of changes in legislation on the trust.

All trustees assume significant responsibility when accepting an appointment as a trustee and careful consideration must be given before accepting such an appointment. Any breach of fiduciary duties by any trustee, including the independent trustee, will result in significant exposure for the trustees. Furthermore, any action taken by the trustees on behalf of the trust while the proper number of trustees is not appointed by the Master of the High Court will be null and void.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

When must you consult the Family Advocate?

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cm_11_a2You may consult the Family Advocate if you have a dispute relating to either the best interests of a child and/or parental responsibilities and rights. Other circumstances under which the family advocate may be consulted include:

1..When parties require assistance in drafting parental responsibilities and rights agreements and to register such with the Family Advocate or to amend, and/or terminate the said agreements registered with him or her.

2. When parties require assistance in drafting parenting plans and to amend or terminate such parenting plans registered with him or her.

3. An application to define contact.

4. A custody, access or guardianship dispute arising from the dissolution of a customary or religious marriage.

5. Domestic Violence and Maintenance cases referred to the Family Advocate in terms of the Judicial Matters Second Amendment Act (Act 55 of 2003).

6. Fathers of children born out of wedlock may request mediation of their parental rights and responsibilities (in terms of the Children’s Act).

7. Parental child abduction to and from South Africa.

If there is a dispute regarding the contact, guardianship or care (parental responsibilities and rights) of a minor child, the Office of the Family Advocate would be requested to investigate the welfare and best interest of the minor child involved. Often, they provide a report which is handed to the relevant Court for consideration. The Office of the Family Advocate is not employed by the parties involved. They work for the State ensuring that they are objective in their investigation and only have the child’s best interests at heart.

Steps involved

1. Contact your nearest Family Advocate to request an enquiry or, mediation of your legal dispute.

2. Upon receipt of the request, the Family Advocate institutes an inquiry during which he or she interviews you and the parties involved to determine your personal circumstances and the background of the matter. Where mediation is requested the Family Advocate will be the mediator.

3. The Family Counsellor then interviews the children separately, so as to enable such children to exercise their statutory right to be heard and to enable the Family Advocate to convey their views to the Court.

4. The Family Advocate will communicate whatever decision taken, which significantly affects the welfare of the child, to such child.

5. Upon completion of the enquiry or mediation process the Family Advocate will file a report for the Court and furnish copies to the parties or their lawyers.

In a typical custody dispute, a Family Advocate and social worker would be appointed to a case and investigate it. The social worker and the Family Advocate would consult with the parents (or parties involved in the dispute), visit their homes if necessary and obtain information from relevant parties etc. The Family Advocate and social worker would also speak to the child and may want to observe the child’s interaction with the parents. If there are other professionals, for example, a social worker or a psychologist who assessed the situation and provided a report, the Office of the Family Advocate would consider those documents as well and even consult with those experts before handing in their report.

References:

  • http://www.ourlawyer.co.za/family_advocate_cape_town.htm
  • http://www.justice.gov.za/services/consult-fam-adv.html

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What to do after a car accident?

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cm_11_a3If a driver of a vehicle, at the time when the vehicle is involved in or contributes to any accident in which any person is killed or injured or suffers damage in respect of any property, including a vehicle, or animal, must report the accident to a police or traffic officer at the scene of the accident as soon as possible, unless he or she is incapable of doing so by reason of injuries sustained by him or her in the accident. In the case where a person is killed or injured, it must be within 24 hours after the occurrence of the accident, or in any other case on the first working day after the accident.

What must a person do after a motor vehicle accident (“accident”)?

1. Call the police or report the accident at the nearest police station within 24 hours if a person is killed or injured; or on the first working day after the accident if no person was killed or injured.

2. Write down the name of the police officer spoken to and the accident report’s reference number.

3. Co-operate with all emergency personnel and police who respond to the accident.

4. Get the details of all other motor vehicles involved in the accident, such as the driver’s names, identity numbers, addresses, telephone numbers, description of the motor vehicles, the registration numbers, and any relevant details from the licence discs; the date, time and address of the accident; the weather and road conditions when the accident occurred; and any other information that may be relevant.

5. If an employee is driving a motor vehicle on behalf of his/her employer, then the details of the driver and the employer must be taken.

6. Write down the names, addresses, and phone numbers of all potential witnesses of the accident.

7. Take photographs or a video of the following: the scene of the accident, from all angles; the surrounding area; the injuries; and any damage to property.

8. Draw a sketch plan of the scene of the accident and make sure that it contains a fixed point so that it can easily be traced. Also make a statement about how the accident happened. This sketch and statement will remind a person of all the details relating to the accident at a later stage.

9. If a person has been injured, a doctor must be consulted immediately, even if the injury is not serious.

10. If the person is insured, that person has to notify his/her insurance or broker as soon as possible. Write down the name of the person spoken to at the insurance and the reference number of the claim.

What must a person NOT do after an accident?

1. Move his/her motor vehicle; unless it is necessary for safety or required by law.

2. Subject himself/herself to further injury by standing or waiting in an area near traffic or other safety hazards.

3. Leave the scene of an accident until the police tell him/her to do so.

4. Throw away any potential evidence, such as defective products, important documents, or torn or blood-stained clothing.

5. Engage in discussions of fault with anyone as that can be considered evidence in court – do not admit liability.

6. Agree to settlement terms without discussing the matter with an attorney.

Although involvement in a motor accident is always a traumatic experience, try to remember that nearly all accidents have legal consequences. For instance, a criminal charge of driving without a licence, drunken driving or culpable homicide may follow. Civil consequences may include claims for damage to property, or for personal injury, and may arise whether there is a criminal charge or not.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Getting child contact for divorced parents

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cm_11_a4Contact refers to maintaining a personal relationship with a child. It entitles a person to see, spend time with (visit or be visited) or communicate (through post, by telephone or any form of electronic communication) with a child who does not live with that person. The child’s parent/s or a person other than the child’s parent/s (such as grandparent) can obtain the right to contact a child, provided that the contact would serve in the child’s best interests.

What will the court consider when granting an order in respect of contact?

1. The best interests of the child.

2. The nature of the personal relationship between the child and his/her parent/s.

3. The degree of commitment the parent/s has shown towards the child.

4. The extent to which the parent/s has contributed towards the expenses in connection with the birth and maintenance of the child.

5. The likely effect on the child of any change in the child’s circumstances, including the effect of being separated from the parent/s or brothers/sisters with whom the child has been living.

6. Any family violence involving the child or a family member of the child.

7. The need to protect the child from any physical or psychological harm that may be caused by subjecting or exposing the child to maltreatment, abuse, neglect, degradation, violence or harmful behaviour.

8. The child’s age, maturity, stage of development, gender, background and relevant characteristics of the child.

9. Any disability that a child may have and any chronic illness from which a child may suffer from.

A parenting plan will contain a clause setting out the reasonable contact that the parent of alternate residence shall have with the child during term time and school holidays, taking into account the child’s social, school and extra-mural activities.

There are an infinite number of possibilities available when drawing up a parenting plan. Jobs, schools and a variety of other factors must still be taken into account. The bottom line is to find a plan that works for the whole family.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Do I need an antenuptial contract before marriage?

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cm_10_a4An antenuptial contract is an important document that, under South African law, determines whether your marriage will exist in community of property or out of community of property, with or without the accrual system.

An antenuptial contract offers a number of benefits:

1. Preventing your intended marriage from automatically being in community of property

2. Offering transparency in your relationship by recording the rights, duties and consequences (legal and proprietary) of your marriage

3. Preventing unnecessary disputes with your spouse down the line

What is marriage in community of property

There is one estate between a husband and a wife. Property and debts acquired prior to or during the marriage are shared equally in undivided shares (50%). Both spouses are jointly liable to creditors.

What is an Antenuptial contract?

A contract entered into to regulate whether a marriage will be out of community of property with/without the accrual system. An antenuptial contract must be signed by the persons entering into a marriage, two witnesses and a notary public, and it must be registered in the Deeds Registries office within the prescribed time period.

The accrual system

In a marriage out of community of property WITHOUT the accrual system, the spouses have their own estates which contain property and debts acquired prior to and during the marriage (“what is mine is mine and what is yours is yours”). Each spouse is separately liable to his/her creditors. Prior to the marriage, an antenuptial contract must be entered into to indicate that the marriage will be out of community of property.

A marriage out of community of property WITH the accrual system is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. The accrual system does not automatically apply and must be included in an antenuptial contract.

Conclusion

After marriage, the terms of the antenuptial contract become irrevocable unless they are amended by an order of the Supreme Court or, in some cases, by a notarial contract which must be registered in a deeds registry.

References:

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

Important steps for the transfer of property

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cm_10_a1The transfer process can take up to three-months, sometimes longer. There are different steps involved in the transfer of a property, these include:

1. Instruction.

A conveyancer receives the instruction to transfer the property.

2. Communication.

The conveyancer communicates with the various role-players involved in the transfer process, such as the seller, purchaser, transfer and bond attorneys, municipality, bank, South African Revenue Service (SARS).

3. Collection.

Certain information and documents are required, such as the agreement of sale, deeds office search, existing deed, bond cancellation figures from the bank and so on. The conveyancer should continuously report to the various role-players about the progress being made.

4. Drafting and signing.

As soon as all the information and documents have been collected, the conveyancer will draft the transfer documents and request the seller and purchaser to sign them. These transfer documents will include a power of attorney and various affidavits.

5. Finances.

Financial arrangements include requesting an advance payment for the conveyancer’s interim account for certain expenses, requesting the bank guarantee, collecting the purchase price or deposit and so on.

6. Transfer duty.

Obtaining a transfer duty receipt from SARS, confirming that the tax relating to the transfer of the property has been paid by the purchaser.

7. Clearance certificate.

Obtaining a clearance certificate from the municipality, confirming that all amounts in respect of property have been paid for the last two years.

8. Prep.

The conveyancer prepares for lodgement (submission) of the deed of transfer and other documents necessary for registration at the deeds office.

9. Registration.

Once the deed of transfer and other documents have been lodged it, takes the deeds office about 7 – 10 working days to examine these documents. If the deeds office is satisfied that the requirement for the transfer of property has been met, the deed of property is registered. The conveyancer will notify the various role-players of the registration.

10. Accounts.

Once registered, the conveyancer makes the necessary calculations and payments relating to the sale, for example, the estate agent’s commission, purchase price and so on. The conveyancer’s final account is also drawn up and sent to the purchaser and the seller for payment.

Having an experienced and expert conveyancer is extremely important to ensure that the transfer of property takes place quickly and efficiently.

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

What should a conveyancer do?

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cm_10_a2Conveyancing (or conveyance) is the legal term for the process whereby a person, company, close corporation or trust becomes the registered and legal owner of immovable property and ensures that this ownership cannot be challenged. It also covers the process of the registration of mortgages.

Conveyancing in South Africa can only be carried out by a licensed conveyancer, i.e. a lawyer who has passed the National Conveyancing Examination.

After an agreement of sale has been made, a conveyancer is appointed (normally by the seller, although the buyer will pay the fees) and instructions are sent to him by the estate agent. These include the names of both the buyer and the seller, a copy of the agreement of sale, and the passport numbers and marital status of the buyer and seller.

The conveyancer should:

1. protect the interest of his client, the Seller, at all times and these interests should outweigh all other considerations except of course issues of legality;

2. inform the seller of the conveyancing procedure and keep the seller informed of the progress of the transaction;

3. advise the seller on the content of the Offer to Purchase, especially regarding suspensive conditions;

4. advise the seller on the cancellation of his bond, any penalties, notice periods and other administrative charges which may affect the settlement figure;

5. obtain the seller’s instruction before issuing any guarantees in respect of the transaction;

6. do everything in his power to register the transaction on or as close as possible to the date agreed to in the offer to purchase;

7. advise the seller on his obligations in terms of the offer to purchase, so as to ensure that the transfer is not delayed;

8. meet with the seller to explain, as well as sign the necessary documentation in order to conclude the transaction;

9. prepare the deeds for lodgement with care, so as to minimise the risk of rejection of the documentation by the Deeds Office;

10. inform the seller of the transfer on the day of registration;

The process of selling and transferring your valued property can have many pitfalls if the correct advice is not received. This is why it is imperative to be cautious and maintain a serious regard for your own interests when choosing the right attorney to take responsibility for the transfer of ownership.

When looking for a conveyancer one must examine the following pre-requisites:

1. Is the conveyancer known?

2. Is the conveyancing firm well established?

3. Does the conveyancer have experience? Is the firm of appointed attorneys outsourcing the transaction to a conveyancing firm unknown to the seller? Not all firms have conveyancers.

4. Does the conveyancer have experience in what you require to be done?

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)

How can a person get married in South Africa?

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cm_10_a3A person can get married in terms of a civil marriage, customary marriage, civil union or religious marriage. A religious marriage is not recognised as a valid marriage, but the spouses in a religious marriage can be protected by law in certain instances.

What are the general requirements for a valid marriage?

1. Both persons to the marriage must give consent to get married and must be older than 18 years of age.

2. A person younger than 18 years of age, needs the permission of his/her parent/s or guardian/s to get married. No person younger than 18 years of age can enter into a civil union.

3. The marriage must be lawful, for example:

  • persons who are closely related (such as brother or sister, or parent and child) may not get married; or
  • a person may not have more than one marriage at a time, except for customary marriages.
  • Certain formalities must be adhered to, such as that the marriage must be concluded by a marriage officer and in the presence of two witnesses.
  • A marriage must be registered at the Department of Home Affairs.
    The difference between marriage in and out of community of property

Marriage in community of property:

There is one estate between a husband and a wife. Property and debts acquired prior to or during the marriage are shared equally in undivided shares (50%). Both spouses are jointly liable to creditors.

Marriage out of community of property without the accrual system:

The spouses have their own estates which contain property and debts acquired prior to and during the marriage (“what is mine is mine and what is yours is yours”). Each spouse is separately liable to his/her creditors. Prior to the marriage, an antenuptial contract must be entered into to indicate that the marriage will be out of community of property.

Marriage out of community of property with the accrual system:

This is identical to a “marriage out of community of property” but the accrual system will be applicable. The accrual system is a formula that is used to calculate how much the larger estate must pay the smaller estate once the marriage comes to an end through death or divorce. Only property acquired during the marriage can be considered when calculating the accrual. The accrual system does not automatically apply and must be included in an antenuptial contract.

References:

https://www.legalwise.co.za/help-yourself/quicklaw-guides/marriages/

This article is a general information sheet and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your legal adviser for specific and detailed advice. Errors and omissions excepted (E&OE)