03 March 2021 - Blog Article #02

Marriage
Contract/Cohabitation
Agreement

– Last Will and Testament

Large and expensive marriage celebrations are traditional through out the world. A lot of time, effort and discussion is put into the celebrations but often the lasting legal ramifications are not considered. Long after the celebrations are forgotten the legal ramifications become evident. 

What are the legal ramifications for the purchase of a family home, a family car or the acquisition of other investments? What happens to the assets when the marriage is dissolved through death or divorce? What happens if debts can’t be paid and a creditor appears to attach the family’s assets to liquidate the debt?

The legal ramifications will depend on what marital regime the couple is married under, ie in or out of community of property and also with or without the accrual. Further ramifications will depend on whether the spouses have a last will and testament. 

Often people living in a life partnership do not consider these legal aspects in consequence thereof they do not have a cohabitation agreement or a last will and testament. The consequences thereof are often not what the parties presumed or expected.

The following explanations are not intended to be conclusive of all the rights and responsibilities of the individual spouse/party nor the possible consequences thereof. This brief explanation is for South African law and not necessary the same in other countries. 

 

Marriage contracts

Many spouses live their life in a partnership scenario, ie they pool their resources by sharing their personal resources such as time, expertise, salary etc. Notwithstanding this a marriage contract is imperative for financial protection, future estate planning, tax planning etc.

If a couple is married without a contract they will be married in community of property. This means that the couple’s estates are joined at the time of marriage resulting in a joint estate. A joint estate means that both parties assets and liabilities are joined, the parties being joint administrators of the estate. Either couple can act alone in the administration of the estate on a few non consequential aspects of the joint estate but there are many times that both parties must agree verbally or in writing in entering into a binding agreement.

Being married in community of property may at times result in a favourable outcome however there are many times that unintended outcomes occur such as there is no protection from the spouses creditors or even on death the join estate is wound up which increases the administration costs.

 

 

A couple prior to solemnising the marriage can enter into a Ante-Nuptial contract. There are many clauses that can be placed in the contract but generally it will provide for the spouses to have  separate estates. This provides for the spouses, amongst other things, to protect their estate against the creditors of the other spouse.

 

Cohabitation agreements

Until late 2020 an unmarried couple living in an opposite-sex life partnership would have no rights nor responsibilities against each other unless they provided for them in a cohabitation agreement and a last will and testament. The law views them as 2 separate parties.

A High Court decision (Bwanya v Master of the High Court, Cape Town and Others [2020] ZAWCHC 111) has possibly changed this scenario. Until then, if one partner died intestate ie without making a will, then the other partner could not inherit nor could the surviving life partner claim maintenance from the deceased estate

The Court held that the relevant legislation was unconstitutional and invalid. This finding however must still be confirmed by the Constitutional Court, hence it is possible that the scenario has changed.

To be safe, a couple living in a life partnership needs to enter into a cohabitation and execute a last will and testament in order to clarify their situation and to protect themselves and their estates.

 

Last Will and Testaments

A will is a document in which a person sets out what will happen when they die which includes aspects such as who inherits their estate (assets, belongings, property), how their liabilities should be dealt with, who will be their minor children’s guardians and/or caregiver, who gets maintenance and so forth. 

The will importantly provides for who, on death administers the estate, meaning who will collect or take control of all the assets of the deceased, to pay the debts which the deceased left at date of death, and then to pay the balance left for distribution to the rightful heirs of the deceased as determined in the will, or if there is no will, to the heirs as determined in terms of the rules of intestate succession.

Many spouses presume that they automatically inherit their deceased’s spouses estate, but this is not always true.  One such example is that without a will the spouse and children could share in the estate.

Be smart and ensure you have applied your mind to what marital regime you will be married under, if living in a life partnership have a cohabitation agreement and execute a last will and testament.