{"id":5230,"date":"2022-05-26T13:14:47","date_gmt":"2022-05-26T11:14:47","guid":{"rendered":"https:\/\/dotnewsconnect.co.za\/law\/?p=5230"},"modified":"2022-05-26T13:14:49","modified_gmt":"2022-05-26T11:14:49","slug":"new-ruling-on-divorce-assets-how-does-it-affect-you","status":"publish","type":"post","link":"https:\/\/dotnewsconnect.co.za\/law\/2022\/new-ruling-on-divorce-assets-how-does-it-affect-you\/","title":{"rendered":"New Ruling on Divorce Assets: How Does it Affect You?"},"content":{"rendered":"\n

\u201c\u2026the inequality at hand is caused when, after the conclusion of the marriage, a distortion is caused by the fact that one spouse contributes directly or indirectly to the other’s maintenance or the increase of the other’s estate without any quid pro quo.\u201d (Extract from judgment below)<\/p><\/blockquote>\n\n\n\n

You may have read of the recent High Court decision declaring a section of the Divorce Act invalid.<\/p>\n\n\n\n

To understand the importance of this new ruling for many couples about to divorce (and for all couples about to marry), let\u2019s start at the beginning –<\/strong><\/p>\n\n\n\n

A recap – your 3 choices of \u201cmarital regime\u201d on marriage<\/h6>\n\n\n\n
  1. You can marry in community of property:<\/strong>\u00a0All of your assets and liabilities are merged into one \u201cjoint estate\u201d in which each of you has an undivided half share. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage or contributed to it thereafter. This by the way is the \u201cdefault\u201d regime – so you will\u00a0automatically<\/em>\u00a0be married in community of property if you don\u2019t specify otherwise in an ANC executed before you marry.<\/li>
  2. You can marry out of community of property without the accrual system:<\/strong>\u00a0Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish. Note here that the \u201caccrual system\u201d (see option 3 below) will apply to you unless your ANC (ante-nuptial contract) specifically excludes it.<\/li>
  3. You can marry out of community of property with the accrual system:<\/strong>\u00a0As with the previous option, your own assets and liabilities remain solely yours. On divorce or death you share equally in the \u201caccrual\u201d (growth) of your assets (with a few exceptions) during the marriage.<\/li><\/ol>\n\n\n\n

    Before we move on to the altogether less happy subject of divorce – if you are about to marry, take full advice on which of these options is best for you before<\/em> you tie the knot!<\/strong><\/p>\n\n\n\n

    Does this new ruling apply to your marriage?<\/h6>\n\n\n\n

    This ruling does not<\/strong> apply to you if your marriage was terminated by death or divorce prior to the judgment (which was handed down on 11 May 2022).<\/p>\n\n\n\n

    It does<\/strong> apply to you if \u2013<\/p>\n\n\n\n

    1. Your marriage is still in existence,\u00a0and<\/strong><\/li>
    2. You chose Option 2 above, in other words if you are married out of community of property without accrual,\u00a0and<\/strong><\/li>
    3. Your marriage was concluded after 1 November 1984. Why that 1984 cut-off date? Well, what this High Court case was really all about was the fact that where a marriage was concluded before 1 November 1984 (that\u2019s when the new \u201cMatrimonial Property Act\u201d took effect), courts had a discretion to make a \u201credistribution order\u201d transferring assets between the divorcing spouses. But (until now) courts have had no such discretion for marriages concluded after the cut-off date.<\/li><\/ol>\n\n\n\n
      The constitutional invalidity<\/h6>\n\n\n\n

      That time bar \u2013 the 1 November 1984 cut-off \u2013 is set by a section of the Divorce Act. And that, held the Court, is unconstitutional because it discriminates between couples based solely on the date of their marriage.<\/p>\n\n\n\n

      It deprives couples married after the cut-off date of the opportunity to ask a court for a share of benefits acquired during the marriage, based on their respective contributions (direct and indirect) \u201cto the other’s maintenance and estate growth during the subsistence of the marriage\u201d. In practice (until now), a spouse could be left destitute after spending decades contributing to a marriage and to the other spouse\u2019s wealth.<\/p>\n\n\n\n

      The Court\u2019s declaration of constitutional invalidity, whilst it must still be confirmed by the Constitutional Court, changes all that.<\/p>\n\n\n\n

      The practical effect of the ruling<\/h6>\n\n\n\n
      • Courts now have a very wide discretion to order a \u201credistribution\u201d of assets between you and your spouse, ordering a transfer of assets and money from one spouse to another, regardless of what your ANC provides.<\/li>
      • That gives you the right to claim compensation for your contributions to the marriage, in other words to claim a fair share of wealth accrued during the marriage (assets brought into the marriage aren\u2019t affected). You will have to prove your case, show what you contributed, and convince the court that a redistribution in your favour is warranted.<\/li>
      • The practical effect of such a redistribution order \u201cis that the party who contributed to the other’s gain is compensated for its contribution to the extent that a court finds just and equitable.\u00a0To this end, the court is cloaked with a wide discretion taking into account an infinite variety of factors<\/strong>.\u201d Factors likely to be considered are each spouse\u2019s respective contributions of time, services, savings of expenses, their current financial positions, what was agreed in the ANC, and the like \u2013 each case will be different.<\/li>
      • Note that\u00a0this is not the same as accrual<\/strong>\u00a0(Option 3 above). With accrual, the spouse with less asset growth (accrual) during the marriage has an automatic claim against the other for half the difference. But with a \u201credistribution order\u201d, there is nothing automatic or 50\/50 about it \u2013 instead the court exercises its discretion as to what (if anything) to award to who.<\/li><\/ul>\n\n\n\n

        The aim here is not to put the spouses into equal financial positions, the aim is to redress an unfair financial imbalance.<\/strong><\/p>\n\n\n\n

        Disclaimer:<\/strong> The information provided herein should not be used or relied on as 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 professional adviser for specific and detailed advice.<\/p>\n\n\n\n

        \u00a9 LawDotNews<\/p>\n","protected":false},"excerpt":{"rendered":"

        \u201c\u2026the inequality at hand is caused when, after the conclusion of the marriage, a distortion is caused by the fact that one spouse contributes directly or indirectly to the other’s maintenance or the increase of the other’s estate without any quid pro quo.\u201d (Extract from judgment below) You may have read of the recent High […]<\/p>\n","protected":false},"author":101014,"featured_media":5231,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[25],"tags":[],"class_list":["post-5230","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-law"],"yoast_head":"\nNew Ruling on Divorce Assets: How Does it Affect You? • LawDotNews<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/dotnewsconnect.co.za\/law\/2022\/new-ruling-on-divorce-assets-how-does-it-affect-you\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"New Ruling on Divorce Assets: How Does it Affect You? 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