Foreign affairs
In estate planning involving married couples, the aspect of the couple’s marital regime plays a crucial role.
If SA law applies to a couple’s marriage (more on that later) then they are deemed to be married “in community of property”, unless they entered into an antenuptial contract prior to the marriage. If they executed an “ANC”, then the marriage is termed “out of community of property” and the parties could in the contract have elected to include or exclude the “accrual system”, a system of deferred sharing of the future increases in the value of their respective estates.
The couple’s marital regime is crucial in that if a couple are married in community of property, then on the death of either (or both) it is their “joint estate” that is wound up. This means all the assets the spouses are included in the deceased estate and, after payment of debts and costs, the reside (balance) of the joint estate is divided equally be-tween the spouses, with the deceased spouse’s half-share being awarded his or her heirs, either in terms of a Will or by the laws of intestate succession.
But there are cases where SA law does not apply to a couple’s
marriage; this is in cases where foreign marriage laws apply to the marriage.
The crucial question is thus: which country’s laws apply to a marriage? The answer can make a huge difference to both spouses – if South African law applies, a person will be married in community of property unless he or she contracts otherwise, whilst in other countries a whole host of different rules, requirements and regimes apply.
So whose law applies? According to SA law, the legal and property consequences of a marriage will, unless the spouses expressly agree otherwise, be governed by the law of the country where the husband is domiciled at the time of the marriage. One’s “domicile” is broadly speaking the country where the husband lives and has “the intention to settle or remain permanently”). Determining “domicile” involves trying to determine mental state or “intention” – never an exact science at the best of times. Citizenship is not the issue. Moreover, the concept that only the domicile of the “husband” should count is outdated and may yet be tested in the Constitutional Court on the grounds of gender inequality.
Here is an example:
In 2000, a British male, then residing permanently in the UK marries a South African woman then living and working in the UK;
The marriage is concluded in South Africa and no antenuptial contract is executed;
After the wedding the couple returns to and resides in the UK;
In 2010 the couple sells up in the UK and relocates to SA with the intention of living permanently;
The husband dies in 2015, and in an unforeseen twist, leaves his entire estate in his Will to his child from a previous marriage.
In this example, the marital regime must be determined by the laws of the country in which the husband was domiciled at the date of marriage: the UK. UK law does not recognise marriages as being in community of property, nor does it recognise “the accrual system”. Thus the deceased husband’s estate will be wound up as though the couple were – in South African terms – “married out of community of property, without the accrual system”. This is despite the fact that they married in SA without an antenuptial contract. This outcome would have severe consequences for the wife, as she would have no claim to half the estate, or an accrual claim.