Property matters and marriage

Marriage is undeniably a life-changing event, but because it is contractual it also affects property ownership – and should be discussed before the romantic side of “I do” is finalised, says Tim Johnson, sales director and licensee for Seeff Dolphin Coast.

Home ownership is not always shared equally between spouses. It depends on the marital contract, and ownership can be affected by whether the purchase was made before or after the marriage occurred.

With more and more couples waiting until later in life to get married, it is not uncommon for one or both parties to already own property before the wedding takes place. Couples may even share ownership of a property if they have been cohabiting and have a contract in place to define their ownership rights and responsibilities. However, these pre-existing contracts may be superseded by a marriage contract.

Rather than assuming that the same agreement will carry through once they tie the knot, it is important to check the contract to determine how the ownership of assets is assigned to each spouse during the marriage and in the event of either death or divorce.

In South Africa the default marital contract is in community of property. However, most couples now choose to draw up ante nuptial contracts before the wedding. This contract will govern the marriage. If a contract is not drawn up, the couple marries in community of property, meaning they agree to share all marital and premarital assets equally. This means both spouses will be equal and joint owners of any property bought before or after the marriage, regardless of whose name is on the title deed. They will also both need to consent to any future property sales or purchases.

When choosing to be married with an ante nuptial contract, this contract will stipulate either with or without accrual. The term ‘accrual’ basically means anything bought or earned during the marriage, otherwise known as a marital asset, will be divided equally between the spouses should the marriage end for any reason. Any property bought after the marriage will be considered jointly owned in the event of death or divorce, unless it has been specifically excluded in the contract. Assets bought or earned before the marriage, including property, will belong to the original owner alone.

If a couple jointly owns a property before marriage, the original ownership division should be specified in the ante nuptial agreement. By doing this, if the marriage should end each spouse retains the shares agreed upon when they made the purchase.

Marriages by ante nuptial contract without accrual do not share ownership of any marital or premarital assets. In this case, whoever bought the property owns the property. However, it can get complicated if both spouses contribute to the cost of ownership.

Marriages by ante nuptial contract, whether with or without accrual, do not require consent from both spouses for property purchases or sales. This is because all property remains individually owned until the dissolution of the marriage, at which point the assets are divided according to the agreement in place.

There is no one right way to handle property ownership when you marry. It is therefore something that all partners should discuss to find what is the best solution for them.

“In the midst of the ‘better’ one still has to keep in mind the potential ‘worse’ – it is exceptionally important to make sure you understand how your property/or properties will be affected if a death or divorce possibly occurs,” says Johnson.

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