In, Out or Accrual? Choosing Your Matrimonial Property Regime

Few couples planning a wedding spend much time thinking about insolvency, consumer price indices or divorce courts. Yet one of the most important financial decisions most South Africans ever make is taken — or missed — before the wedding day: the choice of matrimonial property regime. It determines who owns what during the marriage, who is liable for whose debts, and how everything will be divided when the marriage ends, whether by divorce or death. In our practice we see daily how much hardship a well-considered antenuptial contract can prevent, and how costly the wrong choice can be.

One Decision, Three Options

Since the Matrimonial Property Act 88 of 1984 came into operation on 1 November 1984, South African law has recognised three matrimonial property regimes:

• Marriage in community of property — the automatic default if you do nothing;
• Marriage out of community of property with the accrual system — the default where an antenuptial contract is signed; and
• Marriage out of community of property without the accrual system — only where the accrual is expressly excluded in the antenuptial contract.

The same choices apply to civil unions under the Civil Union Act 17 of 2006. The decision must be made before you marry — changing it afterwards is possible but far more difficult and expensive.

In Community of Property: The Automatic Default

If you marry without signing an antenuptial contract, you are automatically married in community of property. Everything the two of you own and owe — before and during the marriage — merges into a single joint estate in which each spouse holds an undivided half share. When the marriage ends, the joint estate is in principle divided equally.

The pitfalls lie in the detail. Because there is one estate, your spouse's debts are effectively your debts, and if one spouse is sequestrated the whole joint estate is affected. Independence is also curtailed: section 15 of the Matrimonial Property Act requires a spouse's written consent for major transactions, including selling or mortgaging immovable property, signing as surety, and entering into credit agreements. For entrepreneurs who carry business risk, community of property is seldom wise.

Out of Community Without Accrual: Yours Stays Yours

An antenuptial contract that excludes community of property, community of profit and loss and the accrual system creates complete separation of estates. Each spouse owns and controls their own assets and is generally not liable for the other's debts — strong protection where one spouse carries business risk.

The traditional danger of this regime is that it can leave the financially weaker spouse — often the one who scaled back a career to raise children — with little to show for decades of contribution. Note, too, an important development: in 2023 the Constitutional Court held, in EB v ER; KG v Minister of Home Affairs [2023] ZACC 32, that the redistribution remedy in section 7(3) of the Divorce Act 70 of 1979 can no longer be confined to marriages concluded before 1 November 1984. A court may therefore, in appropriate circumstances, order a just transfer of assets between spouses married out of community without accrual — a complete exclusion of sharing is no longer guaranteed.

Out of Community With Accrual: Sharing the Growth

The accrual system is the modern middle road and the regime most often recommended. Under section 2 of the Matrimonial Property Act, every marriage out of community of property concluded by antenuptial contract after 1 November 1984 is automatically subject to the accrual system unless the contract expressly excludes it.

During the marriage each spouse keeps a separate estate, protected from the other's creditors. Sharing only happens when the marriage ends. In terms of section 3, the spouse whose estate grew less acquires a claim against the other for half of the difference between the growth (accrual) of the two estates. The mechanics, set out in sections 4 to 6 of the Act, work like this:

1. Each spouse's accrual is the amount by which the net value of his or her estate at dissolution exceeds its net value at the start of the marriage.
2. The commencement value is declared in the antenuptial contract (or in a notarial statement within six months of the wedding) and is adjusted for inflation using the consumer price index. If no value was declared, or liabilities exceeded assets, it is deemed to be nil.
3. Certain assets are left out of the calculation: inheritances, legacies and donations received during the marriage (unless the parties agree otherwise), damages for non-patrimonial loss, and any asset expressly excluded in the antenuptial contract.

A simple example: if one spouse's estate grew by R3 million over the marriage and the other's by R1 million, the difference is R2 million, and the spouse with the smaller accrual has a claim for R1 million. The Act also builds in safeguards — a spouse whose accrual claim is being seriously prejudiced by the other's conduct may apply under section 8 for an immediate division, and each spouse must on request furnish full particulars of their estate's value.

Why the Choice Matters at Divorce and Death

Your regime is the framework within which every divorce settlement and every deceased estate is administered. In community of property, the joint estate is halved before anything else happens — regardless of who built it up. Under the accrual system, the accrual claim operates at divorce and at death: a surviving spouse with the smaller accrual has a claim against the deceased estate, calculated before any inheritance is paid out. Married without accrual, each estate historically stood alone, but a court may now be asked to exercise the redistribution discretion referred to above. The regime also determines your exposure to a spouse's creditors — an issue that matters long before anyone contemplates divorce.

The Formalities — and Changing Your Mind Later

An antenuptial contract must be executed before a notary public before the wedding and registered in a deeds registry within three months, as required by section 87 of the Deeds Registries Act 47 of 1937. A contract never properly executed and registered binds the couple between themselves but not third parties — a trap that surfaces at the worst possible moments.

If you are already married and regret your regime, all is not lost. Section 21 of the Matrimonial Property Act allows spouses to apply jointly to the High Court for leave to change their matrimonial property system, provided there are sound reasons, all creditors have received notice, and no one else will be prejudiced. It is effective, but it involves court proceedings and cost — getting it right before the wedding is far cheaper.

Choosing a matrimonial property regime is not a formality — it is the financial constitution of your marriage. We draft and register antenuptial contracts and advise on every regime as part of our family law services. If you are getting married, or wish to understand your existing regime, contact us.