October 2023 | Family Law
Media reports of the recent Constitutional Court decision holding a section of the Divorce Act unconstitutional and giving Parliament 24 months to remedy that haven’t always been clear about who needs to be aware of this, and who doesn’t.
Firstly, understand the three “marital regimes” available to you
Legally, marriage amounts to a binding contract, and you have the right to choose between three possible “regimes” –
- Marriage in community of property: All of your assets and liabilities are merged into one “joint estate” in which each of you has an undivided half share. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage or contributed to it thereafter. This is the “default” regime – so you will automatically be married in community of property if you don’t specify otherwise in an ANC (ante-nuptial contract) executed before you marry.
- Marriage out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish. Note here that the “accrual system” (see option 3 below) will apply to you unless your ANC specifically excludes it.
- Marriage out of community of property with the accrual system: As with the previous option, your own assets and liabilities remain solely yours. On divorce or death however you also share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage.
Secondly, what’s the new ruling all about?
If you were married out of community of property (a) without the accrual system (option 2 above) after (b) 1 November 1984, you previously could not ask the court for a “redistribution order” – a reallocation of assets between spouses to ensure a fair split. Your marriage could end (be it through divorce or death) with one of you in a strong financial position and the other in a dire financial position, with a court having no discretion to help the spouse with less or no assets. You could literally be left destitute after possibly decades of marriage, with no redress and no claim against your spouse’s assets.
A 2021 High Court order (now confirmed in a Constitutional Court decision) declared unconstitutional the section of the Divorce Act which led to that unhappy state of affairs, so that you can now ask the court for a redistribution order no matter when you were married.
What does it mean in practice?
About to marry?
Which all confirms the importance of making the correct legal choices before you marry to avoid uncertainty, heartache and dispute down the line. Take professional advice on which option is best for you!
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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September 2023 | Family Law
“Dementia is the plague of our time, the disease of the century” (Unattributed)
Dementia is a widespread medical condition that affects people of all ages but particularly the elderly, and includes conditions like Alzheimer’s. One of the most significant challenges of dementia is the loss of mental capacity, making it difficult for individuals to make crucial decisions, including those related to their legal affairs, finances and care. This can be particularly problematic when family members are unprepared or unaware of the practical and legal implications.
Beware the Power of Attorney myth
One common misconception is that a signed Power of Attorney (PoA) can authorise a family member to take control of the individual’s financial affairs in perpetuity. In fact, a PoA is only valid as long as the person who granted it maintains “legal capacity”, in other words an understanding of its implications. If and when dementia kicks in, the PoA automatically becomes invalid.
Enduring Powers of Attorney, which continue even after someone loses legal capacity, are valid in some countries but are unfortunately not yet recognised in South Africa.
So, what are your legal alternatives for dealing with dementia?
You will typically have three legal options available –
- Curatorship: This involves appointing a curator bonis through a High Court order to manage the financial affairs of the person with dementia (a curator ad personam may in rare cases also be needed to manage the person’s personal affairs). This process can be complex and expensive, but in some cases it may be the only viable option available.
- Administration: Similar to curatorship but less complex, less expensive, and quicker, this involves an application to the Master of the High Court for the appointment of an Administrator.It is only available when your family member is a “mentally ill person or person with severe or profound intellectual disability”, which excludes cases of purely physical frailty or disability, and suggests that in cases of mild dementia or mild cognitive impairment only curatorship is an option – but take legal advice on your specific circumstances. An extra element of cost and delay applies in larger estates, in that the Master must commission an investigation into any application where the assets involved are over R200,000 and the annual income is over R24,000 p.a.
- Special Trust: An alternative option is to consider a trust or special trust, which can be established if your family member suffers from an early onset of dementia but is still lucid and has legal capacity. All trusts have advantages in that they allow individuals the freedom to choose upfront who the trustees will be and what powers and duties they will have, whilst special trusts come with significant tax benefits over ordinary trusts. Individualised professional advice is essential here.
Understanding the available legal avenues can help you navigate this difficult journey, and with proper planning, personalised legal advice and early action, you can ensure that your family member’s legal and financial well-being is protected at all times.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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July 2023 | Family Law
“So often, a party in a divorce is so aggrieved and upset by their spouse’s behaviour during the marriage, and rightfully so, that they cannot fathom having to give up an asset or let their spouse benefit in any way, upon divorce. We have had numerous spouses wanting us to apply forfeiture of the benefits of the marriage based on the other spouse’s bad behaviour during the marriage.” (Extract from one of the High Court judgments below)
Divorce all too often involves high levels of stress, antagonism, dispute and desire for revenge. So, when it comes to splitting up the marital assets, the thoughts of one (or both) of them may well turn to something like “It’s their fault, I want more than just my share, in fact I want everything”.
Which is where the concept of “forfeiture of benefits” (sometimes referred to as “forfeiture of assets”) comes in. It’s an old concept in our law and is increasingly being applied for in our courts, as evidenced in several recent cases which have received wide media coverage. But what exactly does a forfeiture order entail?
What is a forfeiture of benefits order?
The court in granting a divorce has a discretion, in appropriate cases, to order that one party forfeits either all the assets of the marriage, or a specific asset or assets. This overrides both the effect of the “marital regime” of the marriage (in community of property, out of community of property with accrual, out of community of property without accrual) and anything agreed to by the parties in their ANC (ante-nuptial contract).
When will a court order forfeiture?
Forfeiture orders are the exception not the rule, and the onus is firmly on the party claiming forfeiture to establish the basis and amount of their entitlement to it.
The Divorce Act provides that, where a divorce is granted on the grounds of irretrievable breakdown of the marriage, the court may order forfeiture if it is satisfied that one party will otherwise be “unduly benefitted” in relation to the other (the party claiming forfeiture will have to establish the “nature and extent” of that undue benefit). The court will take into account –
- The duration of the marriage,
- The circumstances that caused the marital breakdown, and
- “Any substantial misconduct on the part of either of the parties”.
That gives the court a wide discretion, and every case will be different, but let’s have a look at three recent High Court decisions to illustrate some typical scenarios in which forfeiture was successfully applied for –
- A cheating husband loses his share of accrual
A couple were married out of community of property with accrual. On divorce, that would normally result in a balancing between the parties of the asset accrual during the marriage, but in this case, in granting the wife a divorce from her husband after 12 years, the High Court ordered that the husband “forfeits the patrimonial benefits of the accrual system in total”, including his interest in the wife’s business.
The Court’s decision followed its findings that the husband was guilty of “shockingly egregious” misconduct during most of the marriage, including living away from home, failing to “contribute to the common home financially, emotionally, or in any other manner”, engaging in a long string of extra-marital affairs and attempting, whilst employed in his wife’s successful business, firstly to fraudulently extort money from it and secondly to hijack the business.
- A short marriage ends, and the wife gets nothing
Here, the High Court ordered that a wife forfeit her share of the joint estate assets (with “in community of property” marriages a joint estate is formed, which in the normal course would be divided 50/50 on divorce) after accepting the husband’s evidence that she had “married him to secure financial wealth for herself, advance herself in [the] political arena by using his influence and to benefit from his estate.”
Relevant factors considered by the Court – the short duration of the marriage (14 months from marriage to separation), the 39-year age gap between them, her lack of love or respect for him and embarrassment at being seen in public with him, and her desire to live an extravagant lifestyle beyond his means.
- A husband’s substantial misconduct costs him his share of a joint estate
In this matter the Court ordered the husband to forfeit his share of another “in community of property” joint estate, including an immovable property and a share in his wife’s pension interest. The husband’s conduct, held the Court, had been tantamount to “substantial misconduct”, including failure to contribute to household expenses, failure to pay his child’s maintenance until forced to do so by the Maintenance Court, extra-marital affairs and physical, financial and emotional abuse.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
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May 2023 | Family Law
More and more couples are opting to live together as permanent life partners rather than enter into a formal marriage. The risk for such couples is that whilst our law is steadily (if slowly and cautiously) extending many of the protections of formal marriage to unmarried life partners, that process is not by any means complete yet.
A recent High Court decision, refusing a life partner’s claim for interim maintenance after her relationship broke down, illustrates.
A “permanent romantic relationship” and a failed maintenance claim
- An opposite-sex couple had lived together in a “romantic” relationship for 8 or 9 years, having three young children and splitting when one partner left the common home.
- That partner then sued her ex-partner for (amongst other things) personal maintenance for herself for ten years or until her “death or remarriage”. She based that claim on her request for a declaration that she and her partner had lived as “partners in a permanent opposite-sex life-partnership in which the partners had undertaken reciprocal duties of support”. That main action is being defended by the ex-partner and is yet to come to trial.
- In the meantime, having successfully obtained interim maintenance orders for her children, she then asked the High Court to likewise order interim maintenance for herself as well. She asked for R56,000 per month plus payment of medical, motor and other expenses, together with a R1m initial contribution to costs.
- The Court dismissed this interim application, and whilst its analysis of our current law on the subject, with all the constitutional law ramifications, will be of great use and interest to lawyers, the practical result is what life partners should take note of.
What you must prove to get a maintenance order
Holding that “a ‘permanent romantic relationship’ is not synonymous with a permanent life partnership wherein the parties undertook reciprocal duties of support to one another within the context of a familial setting”, the Court found that the applicant “must first prove facts establishing that the duty of support existed, and that it existed in a familial setting.” (Emphasis added)
She could prove all that, said the Court, in the pending court case. For the moment she must live on her own means, without interim maintenance, until her main action comes to trial.
Practically, if you find yourself in a similar situation you have four choices if you want to claim personal maintenance for yourself (note that maintenance for children is an entirely separate issue, not subject to these limitations) –
- As regards interim maintenance, you can hope that a court will assist you despite the outcome in this case, the Court here stating that “In reaching these conclusions we make it clear that they pertain only to the particular case presented to us by the applicant. Our conclusions are most certainly not intended to be of some broader implication or consequence. It thus of course remains open to anyone to approach court for declaratory relief of the nature which the applicant has sought in this matter and it is hoped that, should that occur, this judgment may provide assistance as to the manner in which such an approach should be made.”; or
- You can try to prove at the full trial that your relationship was more than a “permanent romantic relationship” and was in fact a permanent life partnership with an undertaking of mutual support; or
- You can hope for a change in the law creating an automatic duty of support between you. New legislation on the matter has been pending for many years but appears to be currently stalled. In addition, if this particular case proceeds to trial it may be that something further will emerge from that; or
- Clearly the safest solution – you can put the matter beyond all doubt by signing a full “cohabitation agreement” as soon as your relationship becomes a permanent one.
What should be in your cohabitation agreement?
Although everyone’s own situation and needs will be unique, make sure that your cohabitation agreement (also sometimes called a “domestic partnership agreement”) sets out clearly your respective legal rights and financial arrangements both during your relationship and in the event of separation.
Cover questions such as –
- How will your various assets be divided?
- Do you undertake a reciprocal duty of support and on separation will each or both of you be entitled to personal maintenance and other financial support?
- What provisions are made for your children’s support and maintenance?
- Will there be any financial adjustment between you? What happens for example if only one of you works? Or if you paid for an extension to your life partner’s house or have been paying the bond? Or if one of you brought more into the relationship than the other?
- Who will take over ongoing liabilities and contracts such as leases, bonds, medical and life policies, monthly accounts and so on?
- What else that will need to be regulated in your particular circumstances?
Also make wills!
Supplement your cohabitation agreement with a valid will (“Last Will and Testament”) or perhaps a joint will. That’s the document that will count when you die and it’s the only safe way of ensuring that your last wishes are carried out, and that the loved ones you leave behind are properly looked after once you’re gone. Your cohabitation agreement and your wills are separate and essential documents, so have your lawyer draw them all for you at the same time.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
April 2023 | Family Law, Wills and Estate Planning
“It has long been a foundational principle of our common law and the legislation that has governed the law of testamentary succession that a will, properly executed, is the document that authoritatively reflects the genuine and voluntary dispositions of a testatrix.” (Extract from judgment below)
Most people when making wills and estate plans will lean toward leaving all or most of their estate to a spouse in one form or another.
But if things fall apart and divorce looms it is easy in all the stress and hurly burly of the break-up to forget all about your will. Now it may be that you are quite happy to leave things as they are, but it’s far more likely you will want to make changes – big changes.
Either way, it is important to have on your break-up To Do list a big note “Review and change my will”. If you don’t, our law makes your decisions for you – better than nothing perhaps but far from ideal.
The risks of leaving your will unchanged
In terms of our Wills Act, your ex-spouse is excluded from inheriting under your pre-divorce will for a period of 3 months, unless (a very unlikely scenario) your will makes it clear that you wanted your ex-spouse still to benefit despite the divorce.
After 3 months, if you haven’t made a new will your ex-spouse can inherit again because you are assumed to have wanted him/her to remain an heir. In practical terms, you have 3 months to get your act together and make a new will reflecting your new wishes.
But rather than do nothing for 3 months, leave nothing to chance and make your new will as soon as you can. If you do nothing, your preferred heirs (your children perhaps, or other loved ones) are at risk –
- If you die within the 3-month period, your family could find itself in a bitter fight over your will and how you intended your estate to be distributed. Witness the Supreme Court of Appeal (SCA) case we discuss below.
- If you survive beyond the 3 months, you may have just left everything by mistake to an ex-spouse from whom you are totally estranged.
A case in point
- Shortly before her marriage a wife made a will leaving everything to her husband. She failed to revoke or amend that will after their divorce and committed suicide within the 3-month period.
- Excluded by the Wills Act from inheriting (as set out above) the ex-husband applied to the High Court to have that provision of the Act declared unconstitutional. The High Court ruled against him and he appealed to the SCA.
- The SCA upheld the constitutional validity of the Wills Act provision, and whilst the Court’s detailed reasoning for reaching that conclusion will be of great interest to lawyers, from a lay point of view what really counts is –
- The two risk factors set out above remain in place
- The case serves as a clear warning that not reviewing your will on divorce can easily lead to protracted and bitter litigation, to everyone’s detriment.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
October 2022 | Family Law
“Marriage is a matter of more worth / Than to be dealt in by attorneyship” (Shakespeare)
Wedding Season is well and truly upon us, and if you (or anyone near and dear to you) is busy planning for marriage (note that we are talking “civil marriage” here, “customary marriages” and “civil unions” are beyond the scope of this article), you will have a long “To Do” List to work through. Venue, invites, catering, flowers, service, this, that, the other. The list goes on, and on…
But no matter how long or complicated your Wedding Plan may get, make sure that “Get All the Boring Legal Bits Sorted” is high on your priority list. Yes, this is the not-fun part of all this, and getting to grips with all the legal niceties is a chore.
But whilst we can all agree with Shakespeare’s observation that “Marriage is a matter of more worth / Than to be dealt in by attorneyship”, understanding and managing the legal consequences of marriage remains absolutely vital.
So, where to start? Ask your lawyer three questions –
1. “Do we need an ANC?”
Whether you need an ANC (antenuptial contract), and if so, what should be in it, will depend in part on which “marital regime” you choose.
This is a critical decision. Which regime you choose now (and you must choose before you marry) will affect you and your family long after the ink dries on your marriage certificate. It will affect all of you throughout your marriage, and it will affect everyone when your marriage eventually comes to an end (whether by divorce or death – both grim prospects, but realities that must be faced).
Our law presents you with three alternatives, and professional assistance is essential here because your choice involves a complex mix of individual preference, circumstance, and personal and financial status –
- Marriage in community of property: All of your assets and liabilities are merged into one “joint estate” in which each of you has an undivided half share. On divorce or death the joint estate (including any profit or loss) is split equally between you, regardless of what each of you brought into the marriage or contributed to it thereafter. This is the “default” regime – so you will automatically be married in community of property if you don’t specify otherwise in an ANC executed before you marry. This regime will suit some couples, but most will be advised to rather choose one of the other options (b or c below).
- Marriage out of community of property without the accrual system: Your own assets and liabilities, both what you bring in and what you acquire during the marriage, remain exclusively yours to do with as you wish. Note here that the “accrual system” (see option c below) will apply to you unless your ANC specifically excludes it.
- Marriage out of community of property with the accrual system: As with the previous option, your own assets and liabilities remain solely yours. On divorce or death you share equally in the “accrual” (growth) of your assets (with a few exceptions) during the marriage.
P.S. Already married? As a side note, if you happen to be married already and you now want to change your marital regime – perhaps you have only now found out that you are by default married in community of property and you realise what a mistake that was in your case – you may still be able to fix things. Ask your lawyer if you might be able to enter into a postnuptial contract. You are in for an expensive court application and requirements apply, so rather make the right choice before you marry.
2. “Are our wills in order?”
Marriage is one of those life events that focuses the mind on how important it is to have valid wills (or perhaps one “joint will”) in place. Existing wills need immediate review. Of course, your will (“Last Will and Testament”) is only the first step in a full estate planning exercise, but it is the foundational step, so prioritise it.
Don’t be tempted to procrastinate on this one – as the old saying has it “Death Knocks at All Doors”, and often it knocks without warning. There’s no other way to ensure that your loved ones will be fully protected and catered for after you are gone.
3. “Can we choose new surnames?”
As a man, you can only change your surname by application to DHA (the Department of Home Affairs) but as a woman you can automatically –
- Take your husband’s surname, or
- Revert to or retain your maiden surname or any other prior surname, or
- Join your surname with your husband’s as a double-barreled surname.
Ask about the legal ramifications of your choice and tell the marriage officer upfront what your choice is so that your marriage certificate, marriage register and National Population Register all reflect your married name correctly.
Disclaimer: The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.
© LawDotNews
