Under South African law there are two types of marriage regimes which exist, namely in community of property and out of community of property. The different regimes apply to Civil Marriages, Civil Unions and Customary marriages. These regimes have a huge bearing of how a couples assets will be managed during the subsistence of the marriage and how these assets will be distributed at termination of the marriage through either divorce or death.

In community of property:

This is the default regime which applies if the couple does not conclude an ante-nuptial agreement (popularly know as prenup [American]). This regime creates a joint estate and whatever assets and debts each prospective partner gained before the marriage form part of the (one) joint estate once the partners get married. 

Out of community of property (with/without accrual):

This system applies where the parties conclude an ante-nuptial contract (ANC) before they get married. The ANC sets out the assets which each partner wishes to exclude from the marriage and sets out what should happen to the assets at the dissolution of the marriage. It is imperative that the ANC be drafted by an attorney who is a notary as this is a special agreement applicable only to marriage. The ANC is notarized and registered at the deeds office. For Black couples or interracial couples who wish to factor customary aspects into their union, it is advisable and extremely important that the couple conclude the ANC BEFORE lobola negotiations take place. Section 7(2) of the Recognition of Customary Marriages Act 120 of 1998 states that “a customary marriage entered into after the commencement of this Act which a spouse is not a partner in any other existing customary marriage, is a marriage in community of property and of profit and loss between the spouses, unless such consequences are specifically excluded by the spouses in an ante-nuptial contract which regulates the matrimonial property system of the marriage”.

With accrual:

During the marriage each partner keeps control of their own property, builds up their own estate and each is responsible for their own debts. When the couple divorce, the value of the assets obtained during the marriage (the accrual) will be shared equally. The accrual is determined by calculating the difference in the net starting value (at beginning of the marriage) and the net final value of the estate of each spouse – with the exclusion of inheritances and donations. On dissolution of the marriage the value of the difference in the accrual of the two estates, is then divided equally.

Without accrual (out and out):

Each partner walks into the marriage with their own assets and debts, manages separate estates during the marriage and at dissolution, each partner walks out with their respective estate. 

Our law recognizes two types of divorce: contested and uncontested divorce. Uncontested divorce means the parties are in agreement about how their estates will be divided and there will be no resistance from either party. These are fairly inexpensive and quick to be settled. A contested divorce is the one which comes with slightly more resistance from the parties and naturally, financial burdens as the process tends to drag indefinitely. Regardless of the regime chosen, divorce can be emotionally and financially draining. Therefore, it is advisable for a party to take a few things into consideration in order to manage the consequences of divorce. 

1. Where the parties were married in community of property, at dissolution of the marriage the court will take debts of the joint estate into consideration. This will inevitably affect the party who was not financially reckless as the joint estate will need to pay off any creditors before the estate is divided into two. The expenses will be subtracted from the assets and the balance will be divided in equal shares to each partner. Make a rough calculation to try and estimate what exactly will be left for distribution. Remember where one spouse is under debt review or facing insolvency this affects the joint estate meaning it affects the other party. 
2. Where the parties are married with the application of the accrual system, the party whose estate has shown the least growth during a marriage will be able to claim half the difference between the larger and smaller estate (ie: share in a portion of the estate which has the larger growth). Each party however retains their own debts and will face debt review or insolvency in their own capacity. It is therefore worth determining whether your estate is the smaller or the larger so you can have an indication of how accrual will be determined during the divorce proceedings 
3. Where the parties are married without accrual then the division of assets and debts is simple: each party walks away with what they have accumulated (in assets or debts) and this has no bearing on the other spouse.  
4. Consider your own finances because litigation is expensive and the more high profile or wealthy one or both parties are, the longer the proceedings are likely to take. It is no secret that people have off shore accounts or several businesses which the other spouse may want a share of. Prepare for the worst case scenario. Especially if you have children because the splitting of the two (breadwinners) will also alter their quality of life. Legal fees are not cheap and if you want to walk away in the best financial position you have to be ready to take on an indefinite duration of a (financial) battle. Save up before the divorce or be more conscious of your spending habits and adjust where necessary before and during the divorce proceedings. 
5. Where the couple owned property, during the divorce proceedings one might decide to buy the other out or the property be sold and the proceeds split. More often than not this will leave the parties needing to find a new home. Consider the expenses which come with buying or renting property post the divorce. The chances are that your lifestyle may need to downgrade until you find financial stability. The best thing to do is to buy a one bedroom flat which you can rent out during your marriage and this will ultimately be your fall back accommodation plan when things take an unexpected turn. 
6. In some instances a party may be forced to sell an asset such as a car in order to either afford legal fees or to afford house rental after a divorce. Consider expenses which will be associated with commuting while you get back on your feet. It is always a good idea that if you go into a marriage with a car you should aim to pay it off while you are married and in the event that you buy a new car do not sell the paid off one. 
7. Where children are involved consider how their expenses will be managed. Even though one parent duly pays maintenance, the parent who lives with the children on a full time basis is likely to spend more. Consider how you will manage the children’s expenses and their expectations and consider that there will be new costs associated with children traveling between their two new homes.  
8. Some divorces may be a complete lifestyle downgrade. Family vacations may not happen as frequently, entertainment may take a back seat and clothing budgets may be affected. Consider all these changes that you need to become accustomed to while you rebuild yourself after a divorce. 
9. Start working hard before a divorce – if you are in business try to secure clients on a retainer basis, if you are an employee apply for a better paying job. After the divorce you will need to work twice as hard in order to afford the lifestyle you had before the divorce. 
10. Remember: 

10. • most times a divorce affects a woman more than it affects a man. It is important to have a solid back up plan with family or friends you trust. You will need all the support you can get. Whether it be staying with someone for a month, borrowing an extra car or having someone who will babysit while you job hunt or market yourself.
    • Prioritize drafting or updating your Will once divorce proceedings start. This is admin which you do not want to leave for later because if you die 3 months after the divorce your ex may stand a chance to inherit your estate as per the current (un-updated) Will.
    • If you are unable to financially take care of yourself or your children during the divorce proceeding you should consider applying for spousal or child maintenance. 

Author: Tebello Motshwane

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