Understanding the impact of your marriage contract on divorce settlements

The way in which your assets are divided at divorce depends entirely on the nature of your marriage contract. While most people are aware that protracted, acrimonious divorces are expensive and emotionally exhausting, far fewer appreciate the profound impact their matrimonial property regime will have on the eventual settlement. If you are contemplating a divorce, understanding your marital property system and the consequences that flow from it is the first step to navigating the process wisely.

Marriage in community of property

If you are married in community of property, all assets and liabilities, whether accumulated before or during the marriage, form a joint estate. On divorce, this joint estate is divided equally between the spouses. Although this principle appears straightforward, in practice, many couples negotiate settlement agreements tailored to their circumstances. In our experience, a divorce mediator can be invaluable in facilitating these negotiations, particularly where communication has broken down. Remember, if the parties cannot reach an agreement, the court may appoint a liquidator to divide the estate, which often prolongs the process and increases costs.

Retirement savings are a further consideration in a community of property marriage. The spouse who is not a member of the retirement fund is entitled to claim up to 50% of the member spouse’s pension interest at the date of divorce. Thanks to the ‘clean break’ principle introduced in 2007, the non-member spouse no longer has to wait until the member exits the fund but can access their share immediately, once the divorce order is granted.

Marriage out of community with the accrual system

For couples married out of community of property with the accrual system, each spouse maintains a separate estate during the marriage. On divorce, however, the growth in both estates during the marriage is compared, and the spouse whose estate shows the smaller accrual has a claim for half the difference in value. Note, however, that the calculation excludes any assets specifically excluded in the ante-nuptial contract, as well as inheritances, legacies, and donations from third parties. Donations between spouses and damages awards (for example, pain and suffering or defamation) are also excluded. Importantly, retirement fund benefits are included in the accrual calculation, and a claim can be made against them as part of the divorce settlement.

The accrual system is widely regarded as more equitable because it allows both spouses to share in the wealth accumulated during the marriage, while still protecting assets acquired independently before the union.

Marriage out of community without accrual

Couples who married out of community of property before 1 November 1984 did not have the accrual system option available to them. Where a couple is married with an antenuptial contract excluding the accrual, note that each spouse retains their own estate upon dissolution of the marriage. However, in terms of Section 7(3) of the Divorce Act, the economically weaker spouse can seek a redistribution of assets if they can demonstrate that they contributed, directly or indirectly, to the maintenance or growth of their partner’s estate, bearing in mind that pension interests may be included in such redistribution orders.

While to date, no redistribution order has been available to spouses married out of community without accrual after 1 November 1984, this position has recently been the subject of constitutional challenge. In June 2023, the Constitutional Court held that this section of the Divorce Act is unconstitutional but suspended its declaration of invalidity for 24 months to allow Parliament to amend the law. This means that, while the position is unchanged for now, significant reform is on the horizon. The ruling reflects a growing recognition of the inequities faced by many women who contributed to their households but were left financially vulnerable at divorce due to the rigid application of the law.

Regardless of your marriage contract, remember that while the law provides the framework, the final outcome of divorce depends heavily on negotiation, which is where we believe mediation can save significant time and cost, while also preserving dignity in what is often a painful process. 

It is also important to acknowledge that divorce is not purely a financial event – and that the emotional toll of litigation can erode even the most carefully constructed divorce settlement. Couples who are able to approach divorce with transparency and cooperation are more likely to preserve wealth for both parties, and for their children, where applicable.

Divorce is seldom straightforward, and the division of assets can be among the most contentious aspects of the process. Whether you are married in community of property, out of community with accrual, or out of community without accrual, the consequences of your marital contract are profound. By understanding the framework provided by your matrimonial property regime, and by seeking professional guidance where necessary, you can navigate divorce with greater clarity, fairness, and financial stability.

* Odendaal is a Certified Financial Planner at Crue Invest.

PERSONAL FINANCE