Article by: Umhlanga Attorney - Fawzia Khan
Marriages out of community of property after 1 November 1984 (being the date of commencement of the Matrimonial Property Act) are either with or without the accrual system. This means the parties can decide whether or not to allow for a determination to be made of the value of the assets which accrued whilst they are married. If you were married out of community of property, prior to 1 November 1984 there was no accrual option available. Hence unless there’s a divorce settlement agreement to the contrary, the estates of spouses married out of community of property each retain their separate estates and there is no sharing of assets on divorce.
However, if such a person is now in the process of getting divorce, you can, notwithstanding the fact that the estates of you and your spouse are separate, still claim a share in your spouse’s estate. How is that possible you may ask? Well it’s done through a “redistribution of assets” and is specific to older marriages before 1 November 1984.
The court will only grant a redistribution of assets order in terms of Section 7(3) of the Divorce Act. This section of the Act allows a court to make a division of the assets of the parties, even though they are married out of community of property. The marriage must be out of community of property without accrual. It must have been entered into before the commencement of the Matrimonial Property Act.
It is not automatic and it’s made on application by one of the spouses (usually the wife) and the court can then order that such assets be transferred to the other spouse. The court must be satisfied that it would be just and equitable that such a division or transfer of assets is done. Assets include pension interest. The rationale for this provision was that a redistribution of assets was necessary in order to redress some of the financial imbalance usually suffered by the wife. In deciding whether or not to allow for a redistribution of assets, the court will also look at what contribution a spouse may have made either directly or indirectly in enhancing the value of the estate of the other spouse. These may also include the domestic and household duties fulfilled by the wife, (whose role should not be viewed in any lesser light than what income her husband generated. The means and needs of the parties would also be considered.
If a spouse has assets in a trust, the court can still take those assets into account, if that spouse had control of the trust and it’s found to be just and equitable to do so.
Our courts have also held that even if a person is married without accrual and proceeds to transfer assets to a trust, in order to avoid accrual of assets, and continues to control that trust, then he is seen as the alter ego of the trust. This can allow a creditor to lodge a claim in the trust property. Similarly, if a spouse starts to remove assets in a joint estate (in community of property) pending divorce, the other spouse may bring an anti-dissipatory interdict to prevent him or her from such conduct.
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