Historically, women are not expected to be financially independent in their relationships. It’s often a taboo that they would have an amount of money kept away for themselves and be able to exclude it  from a relationship, especially when married in community of property.

Can partners that are in common law and/or married in community of property enter into a separate agreement to have a purse at their disposal that is officially agreed upon to leave out of community property? When building a life with a partner, is the collaboration that is united by love a detriment to the financial growth of women, in the world were the legal parameters seem to perpetuate and maintain the patriarchal status quo? What are the options available for women to keep a purse, that is been excluded from a pre-existing nuptial agreement?

To answer these questions, we reached out to Law Firm, Ulrich Roux and Associates and these are the insights they shared:

Q. Can you unpack the different marriage contracts and how they impact women financially?

There are three types of matrimonial property regimes in South Africa, namely: 

1. Marriage in community of property.

A marriage in community of property is made up of a joint estate containing both the assets and liabilities of the respective spouses. Thus, a woman is entitled to a half share of their property and cannot be left completely. Parties do not have to enter into a special contract before getting married and if one spouse is financially weak, the other spouse can offer financial support. 

A woman in community of property will likely be placed in a more financially compromised position if they are more financially weak than their spouse and removes the element of financial independence in the marriage relationship. 

2. Marriage out of community of property with the accrual.

A marriage out of community of property with the accrual is the separation of estates of spouses when they enter a marriage and do not share profits and losses for the duration of the marriage. In the drawing up of an ante-nuptial contract, both spouses need to specifically mention that they wish for the inclusion of the accrual system. The spouses will share assets acquired from the commencement of the marriage based on a particular calculation when the marriage is terminated. 

A woman in the marriage will not be affected by the debts and liabilities of her spouse but will share in the increase of the joint wealth in the marriage. Should one spouse have a smaller accrual than other, he or she will then have a claim against the difference between the two amounts. The claimed amount may only be obtained by means of divorce or death. Any inheritances, legacies, donations, gifts, compensation from injury, pain and suffering or defamation, which is received by either spouse in the marriage are excluded from the accrual.

3. Marriage out of community of property without the accrual.

The marriage out of community of property without the accrual means that a woman and her spouse will retain their own assets and liabilities and when the marriage is dissolved, each party will retain their own estate plus all growth that was accrued in their own estate during the marriage. 

Q. If you’re married in community of property, in most cases, you cannot enter any transaction without the consent of your spouse. Are there any loopholes that women can use to keep some of their money separate? How can women build their wealth separate from their spouse?

Marriage affects one’s finances in various ways such as building wealth, planning for retirement etc. 

To separate one’s wealth in community of property is extremely difficult as most transactions require spousal consent. An instance where a person can enter into an agreement without the consent of their spouse is with: 

• a lease agreement or a notarial lease agreement;
• forming a company or trust; 
• Entering into a transaction on the stock exchange;
• Performing or entering into transactions in the usual course of their business, trade or profession;
• Selling certain immovable assets; and 
• Making donations to third parties. 

In the instance of divorce, an exception to the division of assets for marriages in community of property can occur with an application in terms of section 9(1) of the Divorce Act. The application permits a spouse to claim forfeiture of patrimonial benefits on the grounds that the other spouse has benefitted unduly from the community of property. 

Q. Can partners that are in common law and/or married in community of property enter into a separate agreement to have a purse at their disposal that is officially agreed upon to leave out of community property?

There is no common law marriage in South Africa. However, one may refer to the cohabitation of an unmarried couple which would resemble that of a marriage. Cohabitation is not regulated by law and a cohabitation agreement may be entered into to protect the interests of each party. 

 The agreement may contain their rights and obligations and may specifically include provisions to exclude assets and liabilities from their joint property. 

Being married in community of property results in separate estates of spouses being combined and each spouse has the right to dispose of assets as they wish. The only asset that can be excluded from the joint estate is an inheritance. 

Q. Why should having a grip on personal finances and personal financial goals need to be the top priority for every woman, within the legal context?

The financial security of a woman in the context of male-dominated industries is crucial for one to be in a stable position to be financially independent. The context of the gender gap in salaries undermine the combination of qualifications, expertise, and skills of a woman in the workplace, which would affect their generation of income to support their families. The balance of financial responsibilities between a woman and her spouse prevents the limitation on the control of finances with the event of death, divorce, or a disability, where a woman is likely to be placed in a vulnerable position if she solely relies on her spouse for financial security. 

Before getting married, a woman must fully understand her partner’s financial position. If the partner has debt, steps must be taken to ensure that she does not take on the debt personally. 

To be aware of one’s own financial position ensures that there is better strategy with investment and budgeting and setting out measurable goals to ensure that they can enjoy their financial freedom responsibly.

Q. When building a life with a partner, is the collaboration that is united by love a detriment to the financial growth of women, in the world were the legal parameters seem to perpetuate and maintain the patriarchal status quo?

The legal parameters have always upheld the patriarchal status quo in allowing men’s’ interests to supersede those of women in society. Often, values in matrimonial bonds have shaped the law where the standing has been to benefit men as breadwinners and consider women as being confined as caregivers in a domestic space. 

But the law is transformative with the recognition of women as economic key players and the removal of the idea of being vulnerable and dependant on their male counterparts.  

In light of our Constitutional dispensation, the law is slowly shifting into a space where the rights of women and children are being prioritised in matrimonial spaces and upholds the notion of economic stability and independency for women. 

Q. What are the options available for women to keep a purse, that is been excluded from a pre-existing nuptial agreement?

 The protection of assets from a pre-existing nuptial agreement can be done with the agreement of separate accounts instead of a joint account, property being registered in separate names and keeping diligent records of one’s financial status.

Ladies, being financially independent goes beyond the amount of zeros in our bank accounts. It’s about constantly educating ourselves and having the confidence to be firm in our decisions and take control of our personal finances. It’s up to us to be part of the drive for gender equality and be intentional about influencing positive change to future generations. 

Look out for Part 2 of this conversation, on next week’s #WomenomicsThursday.