Financial Implications of Living Together

All romantic partnerships and marriage regimes discussed:


This article was first published in the fourth-quarter 2013 edition of Personal Finance magazine.

Living with a partner in a permanent relationship in which you share resources and expenses can take various forms under the law, depending on what steps you have taken to formalise the relationship.

Sharing comes naturally in any close human relationship, so for most couples the question of who owns what is not important while their partnership endures. It’s when the partnership ends, through either death or separation, that its legal form ultimately matters, because it determines how the partners’ assets are divided and, in the case of separation, whether one partner has any ongoing financial obligations to the other.

Perhaps you and your partner are looking at the various ways to cement your commitment to each other or to ensure that your partnership has legal recognition. What are the different regimes under which you can live together in South Africa, and what happens in each case if you separate or when one of you dies? This article begins by looking at the most formal types of partnership – marriages and civil unions – and moves on to less formal partnerships, legal grey areas within those, and pending legislation concerning them.

The Matrimonial Property Act of 1984 provides for three types of marriage under South African law: marriage in community of property and two forms of marriage out of community of property, governed by antenuptial contract: one with accrual and one without accrual. If no antenuptial contract is signed, the marriage is, by default, in community of property.

A few points you should note before we continue. First, besides the issue of property ownership, the law places obligations on couples in their day-to-day life together. Nthabiseng Monareng, who specialises in family law and is the author of A Simple Guide to South African Family Law (Siber Ink), says that, according to the Maintenance Act of 1998, “when a couple get married, they have a duty to support each other. This duty includes providing accommodation, clothing, food, medical services and other necessities.

“The duty to support each other is the responsibility of both partners. This means that if, for example, a husband does not have the financial means to support himself, the wife has a legal obligation to support him, and vice versa.”

Second, in the case of marriage, mere separation is not recognised by law. A couple must be divorced for the dissolution of the marriage to be recognised and the ensuing division of assets to take place.

Marriage in community of property

Under the Matrimonial Property Act, partners married in community of property have equal legal status (the Act abolished the common-law rule that gave a husband “marital power over the person and property of his wife”, which, in effect, reduced her status to that of a minor.)

Apart from some exclusions, all property is shared by the couple in a joint estate. Monareng explains: “The couple become joint owners of all the assets (property and money) and liabilities (debts and claims) they acquired before they got married and those acquired during the marriage.”

Let’s say, as an example, that the man you are going to marry has a car worth R120 000, on which he owes R80 000, which he is paying off monthly. When you marry him, you will become a joint owner of the car, but will also shoulder joint liability for the debt of R80 000.

Monareng says the main exclusions to communal ownership are:

* Assets excluded from the joint estate in a prenuptial agreement. Before tying the knot, partners can sign an agreement in which they specify assets they don’t want to be included in the joint estate.

* Assets excluded by a will. If you inherit property through someone leaving it to you in his or her will, it is excluded from your joint estate only if the will specifically states it is to be excluded.

* Gifts and donations. These are assets that partners give to each other, including those given during their engagement.

The partners have an equal say in financial transactions that affect the joint estate, to the extent that, in important transactions, mutual consent must be in writing. Monareng says transactions that require the written consent of both partners include buying or selling large assets that are part of the joint estate, such as a house; taking out a mortgage bond; entering into a credit agreement; and ceding insurance policies or investments. (Note that some transactions that require written consent also require the signatures of two witnesses.)

Verbal consent between partners is required for transactions such as the sale or disposal of household goods and access to a partner’s remuneration.

A major disadvantage of having a joint estate is that if one of you gets deeply into debt and is declared insolvent, both of you are equally affected – in other words, your joint estate becomes insolvent. And before that dire scenario transpires, creditors can come after not only all the assets in the joint estate, but also the assets excluded from it, such as an inherited property.

What happens on divorce?

On divorce, the joint estate is split equally between the separating partners, even if one partner has contributed the bulk of the assets by, for example, being the sole breadwinner. The excluded assets remain in the names of the separated partners. However, the terms of the marital regime can be overridden (see “Marriage contract can be overruled”, below). The courts can also order a breadwinner to pay spousal maintenance to his or her former spouse (see “Maintenance of a spouse on divorce”, below).

What happens if a partner dies?

You may be under the mistaken impression that on the death of a partner the joint estate simply passes to the surviving partner, without the need for executors. Unfortunately, life is not so simple. On the death of either partner, the joint assets in the name of the deceased partner are frozen, which can leave the surviving partner without immediate access to funds in the estate.

On finalisation of the joint estate, the surviving partner automatically gets his or her half. The other half is distributed according to the will of the deceased partner. If no will has been drawn up, the deceased’s half of the estate is distributed in terms of the laws that govern intestate succession.

Who would benefit from this type of marriage?

According to a brochure on marriage regimes published by the Law Society of South Africa, “this system rests on a sound principle: namely, that marriage is a partnership and as such [marriage in community of property] can be conducive to a harmonious marriage relationship. It promotes both legal and economic equality of the spouses.”

Regarding the disadvantages, the brochure states: “Where a risk of insolvency exists, it is not the recommended system. [Also], the system of equal powers could, in cases where the temperament of one or both marriage partners is not collaborative, lead to conflict in the marriage.”

Monareng says: “A lot of couples, especially black people, enter into community of property.

This is because of the belief that if they marry out of community, they are not really committed to each other. There is also lack of knowledge and awareness regarding the signing of antenuptial contracts.”

Antenuptial contract with accrual

Before 1984, when the Matrimonial Property Act came into force, couples getting married could draw up an antenuptial contract to keep their estates separate. The 1984 Act established a middle path between full sharing and no sharing by introducing the accrual system, which allows for the sharing of assets that couples acquire during their marriage.

Under the accrual system, before getting married, each partner presents the attorney (notary public) who draws up the antenuptial contract with a list of his or her assets and liabilities. These form the basis for the accrual, providing what is known as the commencement value of each estate. If neither partner has any assets to speak of, the commencement value of the accrual can be set at zero.

So if, as in the scenario above, your future husband has a R120 000 car on which he owes R80 000, his estate will show an asset of a car worth R120 000 and a liability (debt) of R80 000. When you marry him, you will not be liable for his debt, nor will you have any claim on his car.

Monareng says: “During the marriage, each spouse controls his or her assets and is responsible for his or her own debts. On dissolution of the marriage, by death or divorce, the value of each spouse’s estate is calculated, and the spouse whose estate has grown less than the other’s estate during the marriage will get half the difference between the growths in the respective estates.”

The big advantage over marriage in community of property is that if your partner gets into debt, his or her creditors can’t touch your estate. If your partner is declared insolvent, your estate will not be affected.

According to the Matrimonial Property Act, some assets are excluded from accrual. These include donations or inheritances received by a partner from a third party (unless the partners have agreed otherwise in their antenuptial contract) and donations between partners.

What happens on divorce?

On divorce, the values of the separate estates are calculated, taking into account inflation on the commencement values.

In his recently published book, Everyone’s Guide to Divorce and Separation (Zebra Press), Cape Town divorce attorney Bertus Preller says that each estate’s accrual is determined as follows:

* Draft a list of assets obtained during the marriage at present-day values;

* Deduct the assets that were excluded in the antenuptial contract as well as assets acquired by virtue of possession of the excluded assets;

* Deduct exclusions such as inheritances and donations, as well as assets acquired by virtue of possession of the inheritances or donations;

* Deduct present debts and liabilities; and

* Deduct the commencement value as stated in the antenuptial contract and adjusted for inflation.

Once the values have been calculated, the larger estate must transfer half the difference to the smaller estate. As is apparent in the example (see link at the end of the article), in the case of a partner who has debt, both estates are affected, because the debt will affect the accrual calculation and will reduce the amount to be transferred. If, in the example, John had paid off the mortgage bond and had no debt, Joan would have received R705 500 instead of R505 500.

Note that forfeiture of patrimonial benefits is also a possibility under this regime if the court decides that the accrual calculation unfairly benefits one party (see “Marriage contract can be overruled”, below).

What happens on death?

The values of the estates are calculated in the same way as on divorce. On the winding up of the deceased partner’s estate, the following happens, depending on which estate has the greater accrual:

* If the deceased partner’s estate accrued more than that of the surviving partner, the surviving partner has a claim for his or her balance of half the accrued assets from the deceased estate; or

* If the deceased partner’s estate accrued less than that of the surviving partner, the deceased estate has a claim for its balance of half the accrued assets from the surviving partner.

The remainder of the deceased partner’s estate is distributed according to his or her will (which is likely to include the surviving partner). If no will has been drawn up, the estate is distributed in terms of the laws governing intestate succession.

Who would benefit from this type of marriage?

The Law Society’s brochure says: “The accrual system is a modern, equitable system and may be conducive to a harmonious marriage relationship.” It affords financial independence to each party while also ensuring the parties benefit from what they have accumulated as a couple. It benefits individuals who bring substantial assets into the marriage, as well as those who bring very little in the way of assets.

The brochure points out that partners do not share in each other’s debts, but they also do not share in each other’s creditworthiness. Another disadvantage, Preller says, is that the calculation of the accrual on dissolution of the marriage can be somewhat complex. On dissolution, as in a marriage in community of property, a transfer of assets must take place, and for the transfer to be equitable, illiquid assets may have to be sold.

Antenuptial contract without accrual

Note that, for couples signing an antenuptial contract, the accrual system is the default. Accrual must be expressly excluded from the contract for it not to apply.

If you marry under antenuptial contract without accrual, you and your partner’s finances are kept entirely separate, with no sharing of assets on dissolution of the marriage. Your debts would not affect the estate of your partner, and vice versa, and nor would the insolvency of either partner.

What happens on divorce?

Preller notes that the Divorce Act of 1979, as amended, treats couples married under antenuptial contract before 1984 (when the accrual system was introduced) differently from those married after 1984.

* In the case of the divorce of couples married out of community of property before 1984, the courts may grant a redistribution order in deserving cases where one partner (normally the wife) stands to be left virtually destitute and has few prospects of becoming employed or receiving a social grant. This would entail a redistribution of assets, not unlike a forfeiture of patrimonial benefits, where it is found that the disadvantaged partner has contributed, directly or indirectly, to his or her partner’s estate, during the course of the marriage.

Preller says that, in the past, courts have:

– Considered the historical gender imbalance in the job market;

– Acknowledged that a wife’s household duties should not be viewed as of less value than the husband’s employment duties;

– Noted that the term “contribution” in the Divorce Act can cover the ordinary duties of a wife; and

– Found that it is enough to prove that the disadvantaged partner has made a contribution to the other partner’s estate without having to show specific assets.

* In the case of couples married without accrual since 1984, Preller says, there can be no claim for a transfer of assets on divorce.

“The argument is that there are now three matrimonial property regimes to choose from, and if the parties have willingly decided to marry out of community of property and without the accrual system, one of the parties cannot later request a redistribution of assets,” he says.

What happens on death?

On the death of one partner, the estate of that partner is frozen, and the estate is distributed according to his or her will. If no will has been drawn up, the estate is distributed according to the laws of intestate succession.

Who would benefit from this type of marriage?

The Law Society’s brochure on marriage regimes says such a contract is recommended where:

* Both parties are business people who earn high incomes where they plan not to have children;

* Widowed people get married for companionship; and

* The interests of children from a previous marriage may be involved.

Civil union

The Civil Union Act, which came into effect in November 2006, gave same-gender couples the right to formalise their partnerships and enjoy the same legal rights as people married under the Marriage Act, which applies only to heterosexual couples. Note that the Civil Union Act is not specifically directed at same-gender couples; it can accommodate any couple. Under the Act, a couple can enter into a civil union, which can be either a marriage or a legalised partnership. The latter choice, according to Preller, is for people “who do not wish to marry but nevertheless wish to ensure that their relationship has legal recognition”.

Couples need to register their union under the Act and can choose among the three property regimes open to those in a traditional marriage: in community of property, out of community of property with accrual or out of community of property without accrual.

Statistics SA reports that in 2007, the year after the Act was introduced, 80 civil unions were registered in South Africa. This increased to 888 in 2010 and decreased slightly to 867 in 2011, suggesting a levelling off of demand. The statistics do not reveal how many of these were same-gender unions, although it would be fair to say that most of them probably were.

On the dissolution of civil unions, Coenraad Kukkuk, a Pretoria family law attorney who specialises in same-gender unions, writes: “South Africa experienced its first gay divorce as early as March 2007 (as reported in the Mail & Guardian) after a marriage that lasted only a couple of weeks. According to the newspaper, one Richard Thornton, 52, filed for divorce from 20-year-old Andries Jacobs. Having married on January 5, 2007, young Jacobs ‘packed his bags in the dead of night a matter of weeks into the marriage and, according to Thornton, moved in with another man in the same neighbourhood in the town of Krugersdorp’. And with that alleged act, Mr Jacobs dragged gay South Africans into the divorce arena as equals to their heterosexual counterparts for the first time.

“Since then, many gay couples have divorced, or dissolved or deregistered their civil union. The difference is actually semantic, as the dissolution of a gay marriage or civil union is treated the same way as any divorce between heterosexuals is handled.

“Regarding the division of assets, the most important fact to ascertain is whether the couple entered into an antenuptial contract or not.”

Customary and religious marriages

People married under traditional African custom were not regarded as officially married (unless they had also married legally) until November 15, 2000, when the Recognition of Customary Marriages Act became law.

One of the main consequences of the Act is that it made polygamous marriages legal in South Africa under certain conditions.

Monareng says the requirements for people marrying under this Act are:

* They must be at least 18 years of age.

* They must agree to marry each other under indigenous African customary marriage law.

* They must enter into the marriage in terms of custom. This means that the wedding ceremony must involve customary rituals and, importantly, there must be the payment of lobola (see “What the terms mean”, below).

* The couple have three months from the date of the ceremony in which to register their marriage at the Department of Home Affairs. If they fail to register the marriage, the marriage is still legally recognised, but it makes it harder to prove the marriage and, without a registration certificate, a partner cannot file for divorce.

* If a married man wants to take another wife (women can’t have more than one husband), he must apply to the High Court. The application must be made before the wedding takes place and must include a contract that governs property ownership in the marriages. The purpose is to establish how the wives will benefit under the property regime, and whether any of the wives will be prejudiced financially by the marriage.

The Recognition of Customary Marriages Act applies only to African customary marriages. People married according to other religions or customs are not catered for and, unless they have also taken steps to legalise their partnership, their marriages are not recognised under South African law.

For Muslims, the Muslim Marriages Bill, which aims to recognise couples married under Muslim laws, is some way yet from becoming law.

Alta van der Walt, state law adviser in the Department of Justice and Constitutional Development, says: “The bill was submitted for comments. Substantial comments were received and are in the process of being evaluated. Due to the comments received, it is very likely that some of the current draft provisions will have to be amended, and it is unlikely that the bill will serve before Parliament [in 2013].”

Unmarried couples

So you and your partner have been living together for several years and you think that, given the length of your cohabitation, the law would recognise your partnership as a common-law marriage? Well, you would be wrong; there is no such thing as a common-law marriage under South African law. Even if you had been together for 30 years, bought a house together, and your neighbours knew you as Mr and Mrs, your relationship would not be legally recognised, and if you separated, you would have a difficult time claiming anything from your former partner that wasn’t in your name.

There are plans afoot to remedy this situation, and there is one legal channel through which you may currently have recourse (see “Universal partnership”, below). But it is advisable that if you are in such a relationship and want it to be recognised in law, you at least act on the one further option open to you: draw up a cohabitation agreement.

Cohabitation agreement

A cohabitation agreement is a legal contract drawn up between partners in which, much like in an antenuptial contract, they spell out what must happen to their assets on the dissolution of the relationship. The agreement, which may be as flexible or as binding as the partners want it to be, may include the financial obligations of the parties towards each other during the course of their relationship, and may even require one of them to provide for maintenance of the other if it ends in separation.

Kukkuk says: “The law basically views the cohabitation agreement as a business partnership … These agreements have no binding power towards third parties, such as creditors, and do not establish immediate rights of intestate inheritance – they are binding only between the partners.”

Universal partnership

Although unmarried partners without a cohabitation agreement cannot expect the law automatically to protect them, some have had success in convincing the courts to acknowledge the existence of a “universal partnership”, whereby each partner contributed to and benefited from the relationship.

A universal partnership is a concept in common law and is essentially a business agreement that may be tacit or expressed.

The requirements for a universal partnership set out in the judgment in the case Ponelat versus Schrepfer (2012) were confirmed in a Supreme Court of Appeal judgment in March last year, in the case Butters versus Mncora. In that case, the parties were not married but had lived together as husband and wife for almost 20 years. The requirements, which may prove difficult to satisfy, are:

* Each of the partners brings something into the partnership.

* The business is carried on for the joint benefit of the parties.

* The object of the partnership should be to make a profit. (A pure profit motive is not required; the achievement of a material gain, such as each partner doing what he or she can to save on living costs, will suffice.)

* The contract should be a legitimate one.

Once the court has established that such a relationship existed, it may order a redistribution of assets, though not necessarily on a 50-50 basis.

Take note that this route would probably be a protracted and expensive one, and there is no certainty that the court would recognise the existence of such a partnership.

Domestic Partnerships Bill

On January 14, 2008, the Domestic Partnerships Bill was published in the Government Gazette. It is specifically designed to deal with the legal grey area faced by unmarried cohabitants.

Kukkuk says: “The history of this bill is quite interesting. It first saw the light as ‘Chapter Three’ in the Civil Union Bill, but was removed in total, due to, presumably, time constraints. The Constitutional Court gave Parliament a cut-off date to enact new legislation to enable gay people to marry … There was just not enough time to incorporate domestic partnerships into the Civil Union Bill. Chapter Three then re-appeared in 2008 as a bill on its own. But this bill has never been voted on by Parliament and is still not yet law.”

Kukkuk says the bill distinguishes between registered and unregistered domestic partnerships. Partners can choose to register their domestic partnership, but the bill does accord rights to those in unregistered partnerships.

There is no general community of property, Kukkuk says, but the parties may conclude a partnership agreement, which is legally binding between the parties themselves, in much the same way as an antenuptial contract. If the partnership ends, one or both parties may apply to court for a maintenance order, an intestate succession order (inheritance where there is no will) or a property division order.

The bill states that the court must have regard to all the circumstances of the relationship, including factors such as its duration and nature, the degree of financial dependence or interdependence, and the degree of mutual commitment to a shared life.

“Under the bill, unregistered partners are not liable to maintain each other, and neither party is entitled to claim maintenance, except where the court finds that it is just and equitable that maintenance be paid. In the case of death, the surviving partner may apply for maintenance from the deceased partner’s estate or apply to inherit an intestate estate,” he says.

When the bill is likely to become law is anybody’s guess. No comments on its progress had been received from the Department of Home Affairs at the time of going to print.


Antenuptial contract: A contract drawn up by a couple before they marry, usually signifying a marriage out of community of property. The contract governs the partners’ financial obligations to each other during their marriage and the treatment of their separate estates on dissolution of the marriage.

Commencement value: The value of a partner’s estate (assets less liabilities) before getting married, as set down in the antenuptial contract. It forms the basis for the accrual.

Uncontested divorce: A divorce in which the separating partners reach a settlement before the case goes to court.

Patrimonial benefits: Inheritable assets in an estate.

Intestate succession (laws of): Rules that govern who benefits in the case of someone dying intestate. These are laid down in the Intestate Succession Act of 1987.

Lobola: Dowry, in African culture.


When it comes to divorce, the terms of the marital regime are not cast in stone and can be overridden by a court – at least for couples married in community of property and those married out of community of property with accrual – or by the separating partners themselves, if they are in agreement.

* Court ruling. If a couple is, say, married in community of property and, in filing for divorce, one partner believes the 50-50 split of assets would “unduly benefit” the other party, the partner can claim a “forfeiture of patrimonial benefits”. A classic example of where this could apply is where a young man with minimal assets marries an older, wealthy woman and, in the course of a short marriage, has affairs with younger women. Hurt and humiliated, the wife sues for divorce.

In his book Everyone’s Guide to Divorce and Separation, divorce attorney Bertus Preller says that in the event of a claim, under the Divorce Act of 1979, the court will consider three things: misconduct by one or both of the parties, the duration of the marriage, and the circumstances leading up to the breakdown.

He says a partner cannot forfeit assets that he or she had before the marriage and brought into the joint estate. And in the event of the court granting forfeiture, it may be either wholly or partially in favour of the claimant.

In her book A Simple Guide to South African Family Law, Nthabiseng Monareng says that these cases tend to be exceptional – in South Africa at least, the courts are not willing to grant such an order without good reason.

* Mutual consent. The matrimonial property regime can be overridden by the couple themselves in the case of an uncontested divorce. Preller says that one form of uncontested divorce is where the parties enter into a settlement agreement, also known as a consent paper, which regulates property ownership issues arising from the termination of their marriage.

“The parties have full contractual freedom either to apply the matrimonial property regime applicable to their marriage or to draw up a settlement agreement that they find better suited to their circumstances. The settlement agreement will be made an order of the court when the decree of divorce is granted,” he says.


Our courts, at their discretion, may award maintenance to a spouse on divorce. Cape Town divorce attorney Bertus Preller says that, in practice, the majority of cases have, historically, been brought by women. He also says that no one is automatically entitled to spousal maintenance – “our law favours the ‘clean break’ principle, which basically means that after a divorce the parties should become economically independent of each other as soon as possible”.

Preller says there are three types of spousal maintenance:

* Rehabilitative maintenance. A temporary form of maintenance is often awarded to middle-age women who have devoted many years to bringing up children and need support until they can re-enter employment.

* Permanent maintenance. This is normally awarded to a spouse who is unable to support him- or herself. Maintenance would apply until the person remarries or dies.

* Token maintenance. A token amount is sometimes awarded when a party cannot afford to pay maintenance immediately – the amount can be increased later if necessary.

Maintenance must be applied for in the divorce application. Once a divorce has been granted, a former spouse cannot subsequently apply for maintenance.

In considering maintenance, Preller says, the courts will look at factors such as the events that led to the breakdown of the marriage, the couple’s standard of living, the earning capacities of each partner, the duration of the marriage and any claims for the redistribution of assets.


On the death or divorce of a contributing member of an occupational pension fund, provident fund or retirement annuity fund, the member’s pension benefits are distributed according to the Pension Funds Act and, in the case of divorce, the Divorce Act, and not necessarily according to the Matrimonial Property Act or even the contents of a will.

* On death. In allocating benefits on the death of a retirement fund member, pension fund trustees are primarily obliged to consider the dependants of the member and then named beneficiaries. Thus a dependent cohabiting partner would stand to benefit, even where no partnership agreement existed, and the member’s children would benefit, even if they were excluded from the member’s will.

* On divorce. Cape Town divorce attorney Bertus Preller devotes a chapter to pension benefits and divorce in his book Everyone’s Guide to Divorce and Separation, and Personal Finance magazine volume 49 (fourth quarter 2011) carried an article on the subject by Bruce Cameron. The article is on the Personal Finance website,, under the title “Splitting a pension on divorce”.


The above article, co-written by Coenraad Kukkuk, answers many of the questions he has received with regards to the Financial implications of:

– Marriage in or out or out with accrual;

– Divorce

– Living together

– Civil Union

– What happens upon death?

– Who would benefit from this type of marriage?

– Cohabitation agreement

– Antenuptial contract


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