What assets are excluded from the joint estate in SA?

In South Africa, under the matrimonial property regime of community of property, most assets and liabilities acquired by either spouse before or during the marriage are included in the joint estate. However, there are specific exclusions that are not considered part of the joint estate.

The assets which are excluded from the joint estate are the following:

1. Inheritances, Legacies, and Donations: Assets or money inherited, received as a legacy, or donated to one spouse explicitly excluded from the community of property by the terms of the inheritance or donation are not part of the joint estate.
2. Specific Exclusions in Antenuptial Contracts: If the spouses are married out of community of property and have an antenuptial contract with accrual, the contract may specify certain assets as excluded. These assets remain separate and are not shared upon dissolution of the marriage either by death or divorce.
3. Insurance Payouts: Certain insurance payouts that are explicitly designated for one spouse can be excluded from the joint estate, particularly if the insurance policy specifies that the payout is not to be included in the communal property.
4. Compensation for Personal Injury: Awards or settlements for personal injury claims (e.g., damages for pain and suffering or medical expenses) received by one spouse are typically not included in the joint estate.
5. Personal Effects: Generally, personal effects such as clothes and personal gifts that are not part of the household may be excluded from the joint estate, especially if they were intended solely for the personal use of one spouse.

These exclusions are designed to ensure that personal gifts, inheritances, and personal compensation do not automatically become communal property, protecting the personal nature of these assets. It’s important for spouses to understand these exceptions, as they can significantly impact financial planning and asset management within the marriage.

7 Legal Facts

Here are seven legal facts to consider regarding assets excluded from the joint estate in South African matrimonial law:

1. Pre-marital Assets: Assets acquired by either spouse before the marriage are excluded from the joint estate if the couple is married under the regime of community of property, provided these assets remain separate and identifiable.
2. Explicit Exclusion Clause: Assets acquired through inheritance or donation during the marriage can be excluded from the joint estate only if there is an explicit clause in the will or donation document stating that they are to be excluded from the community of property.
3. Antenuptial Contracts: Couples married out of community of property with accrual can specify in their antenuptial contract which assets they want to exclude from the accrual calculation, effectively keeping them out of the joint estate calculation upon divorce or death.
4. Business Interests: If one spouse owned a business before the marriage and it was not included in the joint estate through an antenuptial contract, it remains an excluded asset. This can have significant implications for the division of assets upon dissolution of the marriage.
5. Damages for Personal Injury: Any compensation received by one spouse for personal injury is not part of the joint estate. However, compensation for loss of earnings, which could benefit the household, may not be excluded.
6. Pension and Retirement Benefits: In community of property marriages, pension interests accrued during the marriage are considered part of the joint estate. However, retirement benefits accrued before the marriage are excluded.
7. Liabilities and Debts: Specific liabilities or debts incurred by one spouse for non-household purposes or through reckless or fraudulent behavior can be excluded from the joint estate. This protection ensures that one spouse is not unfairly burdened by the irresponsible financial behavior of the other.

These legal nuances highlight the importance of understanding how matrimonial property regimes in South Africa impact the management and division of assets within a marriage. Each couple’s circumstances can significantly affect how assets and liabilities are treated, making it advisable to consult with a legal expert, especially when drafting prenuptial agreements or planning significant financial changes.