Popular South African celebrity couple Siya and Rachel Kolisi have mutually decided to end their marriage, but what does this mean for the properties that they own?
The Springbok captain and his wife recently took to Instagram to announce the end of their marriage.
In an Instagram post, the couple wrote: “After much reflection and open conversations, we have decided to end our marriage.“
While the couple have announced the end of their marriage, what will happen to the properties that they own?
Renier Kriek, Managing Director, Sentinel Homes said that couples need to think about the consequences of owning or buying property before they get married.
“If you own or intend to buy property for habitation, business or investment, you need to consider the implications before tying the knot,” Kriek said.
Here is a look at the different types of marriage and what you need to know to protect your assets once the fairytale ends.
In community of property
Kriek said that by law, if a couple is married without an ante-nuptial agreement, they are automatically considered to be married in community of property.
“Any properties you owned before marriage or acquired afterwards belong equally to you and your spouse. They can also be attached to pay off your spouse’s debt, and you can’t sell them or buy more without your partner’s consent,” Kriek said.
When the couple divorces, any properties and other assets will be divided equally, regardless of who paid for the property.
Kriek said: “I don’t know an attorney who would recommend this model of marriage to their clients.”
“It’s impractical to have the parties bound at the waist as neither can act commercially without the other’s consent. In addition, it’s poor risk management because all the assets are exposed to either party’s actions.”
Out of community of property without accrual
According to Kriek, SA law imposes an accrual system on marriages that are out of community of property.
If people want complete financial independence, then their ante-nuptial must explicitly state that an accrual must be excluded. This is called the “cold exclusion.”
According to Kriek, if married by the cold exclusion, all the assets that couples acquired before and during marriage remain will remain their own and cannot be attached to their spouse’s debts.
“You can also buy and sell property without their consent, and engage in commercial activity unfettered by the bonds of matrimony,” Kriek said.
At divorce, each partner will leave with all of their assets and just have to worry about disposing of jointly purchased property.
“This model is ideal for couples who want to retain their financial freedom, grow their wealth independently, and protect their assets from each other’s creditors,” Kriek said.
Keep in mind that maintenance claims are potentially open to all spouses when they divorce, even if the parties chose the cold exclusion.
Out of community of property with accrual
If there is’t an accrual exclusion clause in the ante-nuptial agreement, then the accrual system will automatically apply, according to Kriek.
Assets that are owned before and acquired after marriage, cannot be attached to pay creditors, and you are free to buy and sell property at will.
However, at divorce or death, a person can claim half of the difference between their estate and their spouse’s higher-valued estate.
In effect, it’s “in community of property” at the end without all the restrictions during the marriage.
“It ensures both come away equal, and allows for one spouse to take time off to rear the children, or for one to work to put the other one through school or university, even though they are married out of community of property,” Kriek said.
“This is because, in the end, there will be a divvying up of assets. However, it could still mean losing the property you owned separately because assets may be sold to cover the accrual payment due on the dissolution of the marriage.”
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