How to Change your Marital Regime
Couples sometimes rush into marriage and before they realise 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. Couples can choose to amend their marital regime to one of Out of Community of Property – with or without the accrual system. This will depend on which accrual option is most suited to the parties’ circumstances.
In terms of South African law, if you do not properly execute an antenuptial contract prior to marriage you are by default married in community of property. More and more couples are realising the implications of being married in community of property, and by not seeking correct legal advice prior to the marriage, many couples only become aware of the consequences only after they are married.
Although by law you are not allowed execute an antenuptial contract after marriage, the good news is that it is possible to change your matrimonial property regime from in community of property to out of community of property by registration of a Postnuptial Contract by virtue of Section 21(1) of the Matrimonial Property Act with the permission of the High Court.
If you married in community of property and now want to change your marital regime, you can draw up a post-nuptial contact (ANC). It is becoming more and more common for couples planning marriage to draw up an ANC in which they define the division of property in the event of divorce. Generally, marriages involving an ANC are out of community of property, that is, each party retains the right of possession of property owned prior to the marriage. Any increases in value of the property after the marriage may accrue to both parties or may remain the property of the original owner, depending on whether the marriage is with or without accrual
Once again, if there is no ANC, the marriage is automatically in community of property. In essence, all assets, whether brought to the marriage or acquired afterwards, are the joint property of both spouses and are divided equally in the event of divorce. Traditionally, this afforded women a degree of financial protection.
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.
Should a couple decide to change their marital regime, which can be based on a variety of reasons. The most common being that no ANC was drawn up before the wedding, and at a later date the couple chooses to change the regime to out of community of property. This may be because of subsequent independent business interests of one or both parties or simply because the couple married some time ago when ANCs were less prevalent.
The estimated time in preparing your application, your post-nuptial contract and ultimately obtaining consent from the High Court is about 4 weeks. This is also dependent on whether or not the High Court is sitting within 4 weeks after the drafting of your application. If the High Court is in recess, a few extra weeks may apply. The Court may also want a report from the Registrar of Deeds which could cause delays.
Once your application is successful and the High Court, therefore, gave consent, you will usually have 3 (three) months to register the postnuptial contract. So once consent is granted, you need to see a Notary Public before whom you will sign your post-nuptial contract and then have it registered. This, therefore, needs to be done within the three months of obtaining the consent of the High Court
The costs involved:
The cost of drafting the Postnuptial Contract should be the same as the cost of an antenuptial contract entered into as if the parties were not married before. However, since an application must be made to the High it is more costly since it includes legal fees, notice to the Registrar of Deeds and costs of the publishing notices in two newspapers as well as the Government Gazette. Unfortunately, the application is expensive in that you and your spouse have to apply to the High Court on notice to the Registrar of Deeds and all known creditors, to be granted leave to sign a Notarial Contract having the effect of a postnuptial contract which, after registration, will regulate your new matrimonial property system.
As stated, you have to approach the High Court for consent to change your matrimonial property regime. There, therefore, would be the costs of an attorney who may instruct and advocate, and further costs in drafting and registration of the postnuptial contract. Furthermore, there is advertisement cost involved as you would have to give notice in the Government Gazette and in one or two local newspapers. You would further have to serve your application on the Registrar of Deeds and give notice to your creditors via registered mail. The total costs can range from R 15 000 – 00 should your matter be straight forward, to R 20 000 – 00 should it be more complicated.
Complicated would mean the joint estate has many creditors. Furthermore, there may be many assets in the joint estate that needs to be divided, especially if they are not easily describable. The above-mentioned fee is obviously dependent on your application not being opposed by any interested party.
One reason for opposing the application could be that the Joint Estate is deeply indebted to a creditor, and she feels that her claim would be prejudiced by the proposed change.
Should your application be opposed for any reason, many more hours will be spent fighting for the success of your application which could costs you a small fortune and you may even be ultimately unsuccessful. Therefore, you would need to advise your legal team of all relevant facts before the application is madeThe procedure for such is as follows:
Amending your marital regime is provided for in the Matrimonial Property Act No. 88 of 1984
. More specifically, Section 21 (1) of the Act provides that a married couple may jointly apply to court in order to amend the existing matrimonial property regime.
An application is made to the High Court by both parties, to ask the Court to grant the parties leave to sign a Notarial Contract (having the effect of a postnuptial contract (ANC)), which after registration will regulate their new matrimonial property system.
In order for the parties to change their matrimonial property system, the Act provides the following requirements:
Steps to take under the Matrimonial Property Act:
The decision in Lourens et Uxor 1986(2) SA 291 (C) sets out guidelines that the courts follow with regard to applications in terms of Section 21(1) of the Matrimonial Property Act.
The Act further provides various requirements that have to be met in order to qualify for the amendment such as:
As a means of formality, the creditors need to be given the right to refuse the change of the couple’s matrimonial property regime. These rights need to be preserved in the proposed contract.
There must be sound reasons for the proposed change. According to South African Law, the parties who wish to become married out of community of property must enter into an antenuptial contract prior to the marriage ceremony being concluded. If they fail to do so they are automatically married in community of property. Of course, many people are unaware of this provision and should be able to satisfy the court that it should change their matrimonial property system if it was their express intention that they intended to be married out of community of property.
Notice of the intention to amend must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the application will be heard, and must be given by certified post to all known creditors. The Act requires that notice of the parties’ intention to change their matrimonial property regime must be given to the Registrar of Deeds, must be published in the Government Gazette and two local newspapers at least two weeks prior to the date on which the application will be heard, and must be given by certified post to all the known creditors of the spouses. Moreover, the draft Notarial Contract that the parties propose to register must be annexed to their application.
Draft notarial contract, which the parties propose to register, which must also be annexed to their application. 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
Rights of creditors must be preserved in the proposed contract. 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.
Confirmation that no other person will be prejudiced by the proposed change. The court must be satisfied that the rights of creditors of the parties must be preserved in the proposed contract. The application must therefore contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change, and whether or not any particular person will be prejudiced by such change.
Once the court is satisfied that the requirements have been met it may order that the existing matrimonial property system may no longer apply to their marriage, and authorise the parties to enter into a Notarial Contract by which their future matrimonial property system is to be regulated on such conditions as the court may deem fit.
The application must contain sufficient information about the parties’ assets and liabilities to enable the court to ascertain whether or not there are sound reasons for the proposed change and whether or not any particular person will be prejudiced by the change.
If either of the applicants have filed for bankruptcy in the past then this will need to be stated along with the circumstances, and then rehabilitation application will need to be provided.
If the creditors of either party are seeking legal action so as to recover payments outstanding on debts which are due, then this should be stated. This is so if the debts outstanding are by either an individual or by the couple as a whole.
- The domicile of the parties involved needs to be disclosed of in the application, and if not a resident then they should state where they are resident. 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. If there is a recent change in domicile or residence then this should be disclosed so that the Court can consider whether the application has been brought in the appropriate forum and/or whether or not additional notice of the application should be given. Ordinarily the application should be brought in the Court in whose area of jurisdiction the parties are domiciled and ordinarily resident.
It should also be stated whether or not either of the applicants has been sequestrated in the past and, if so, when, and under what circumstances. The case number of any rehabilitation application must be furnished. It further needs to be stated whether or not 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.
Once the court is satisfied that the requirements have been met, it may order that the existing matrimonial property system may no longer apply to their marriage and authorise them to enter into a Notarial contract by which their future matrimonial property system is to be regulated on such conditions as the court may think fit.
Once such an order is granted by the court, the postnuptial contract is executed and thereafter registered in the Deeds Office.
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 why 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 into the marriage. However, it is important to note that it can be costly as a change to the marriage regime affects a person’s status, such change cannot be effected without an order of the High Court. It is therefore advisable to speak to an attorney prior to your marriage to be fully informed of the different marital regimes, the consequences associated therewith and to timeously execute and register a valid antenuptial agreement, should they so prefer.